How WiFi can hook triple-play subscribers

Besides the beach, and running on the boardwalk, one of the things I miss about living in Spring Lake, N.J., is all of the free WiFi.

Well, it wasn't exactly free. But as part of my Optimum Online cable modem service from Cablevision (NYSE: CVC), I was able to use my phone or laptop to surf the Web at high speeds throughout much of the town, from the shops and restaurants on Third Avenue to the beach and train station.

On days that I took the train to New York, my laptop and phone would automatically connect to the WiFi hotspot at each station all the way up to Penn Station. Wherever I went in New Jersey, I become accustomed getting free WiFi in any public area, and when I looked at my phone to see which networks were available, Cablevision, Comcast (Nasdaq: CMCSA) and Time Warner Cable (NYSE: TWC) were usually listed.

Just by building WiFi hotspots, these cable MSOs were exposing their brands to anyone who attempted to connect their phone, tablet or laptop. The hotspots weren't just a perk for cable modem customers--they could be used by operators to market their brands to subscribers of AT&T (NYSE: T) and Verizon (NYSE: VZ), which have built few hotspots in public areas.

The New York City metropolitan area is one of the few parts of the country that has broad coverage of WiFi hotspots. While demand for WiFi has increased dramatically in the last two years thanks to the boom in smartphone and tablet computer sales, most Americans will only find WiFi offered in retail locations like Starbucks or McDonalds franchises, in addition to hotels or airports, where we often have to pay for WiFi access.

I was reminded of the lack cable public hotspots outside the New York area earlier this month when I attended the New York State Fair, which ran for 12 days just outside of Syracuse, N.Y. While waiting to see the band Train take the stage for a concert the opening night of the fair, I looked down at my phone to try to connect to a WiFi network so I could check my email and Twitter feed. Time Warner Cable and Verizon both sell high-speed Internet service in Central New York, but neither company had a WiFi network available. The Train production team had apparently brought its own WiFi transmitter on a truck, and its signal showed up as one of the networks available. But of course it was secured network, and the band didn't share the password with concertgoers.

The New York State Fair draws nearly 1 million attendees each year. Time Warner Cable set up a huge exhibit in the fair to market its digital cable, high-speed Internet Internet and mobile 4G products (see our story about Time Warner Cable's wideband marketing efforts). And while TWC set up several computers that attendees could use to check email and surf the Web, the MSO didn't offer wireless Internet access. Neither did Verizon, which bought booths to tout its latest mobile phones.

Time Warner Cable and Verizon may have missed a good marketing opportunity by not offering WiFi access at the fair. TWC told me that the company has looked into offering WiFi each year at the fair, and will consider offering it next year.

Building WiFi hotspots could help TWC and other cable MSOs draw new high-speed Internet customers, but the MSOs will focus first on major cities. Earlier this month, Time Warner Cable said it'll spend $15 million to build WiFi hotspots throughout Southern California. In addition to offering free access to its existing cable modem customers, it will offer non-subscribers pay-as-you-go plans of $2.95 per hour, $6.95 per day or $19.95 for one week of service. With demand for WiFi continuing to heat up thanks to new mobile devices such as Amazon's (Nasdaq: AMZN) Kindle Fire, the amount of WiFi access a offered by a telecom provider could be one of the factors that a subscriber considers when debating whether to order a triple-play of video, phone and high-speed Internet from a cable or telephone company.--Steve