Windstream's proposed buildout of its new Kinetic IPTV service in Lincoln, Neb., is facing protest from local cable incumbent Time Warner Cable (NYSE: TWC), which says the telco is getting a better franchise deal.
Bill Austin, a Lincoln attorney representing Time Warner Cable, said during a public hearing on the proposed agreement with the city held earlier this week that Windstream's proposal is more favorable or less burdensome than the franchise agreement it currently has with Time Warner, reported the JournalStar.com.
The cable MSO said that Windstream's proposal violates a section of their agreement that mandates the city to create agreements with new video providers that are either no "more favorable or less burdensome when taken as a whole" than Time Warner Cable's franchise agreement.
Among the issues that Time Warner Cable has a problem with are public access capital needs, the public access studio requirements, the government education grant and service area requirements.
Steve Huggenberger, an assistant Lincoln attorney who addresses cable issues, said that while the Time Warner Cable and Windstream agreements are slightly different, they are comparable "when taken as a whole."
During the hearing, Austin said that while Time Warner Cable has to deliver service to all of Lincoln, Windstream only has to begin offering service to nearly 45 percent of the city and get to 80 percent of the city's homes by the end of the 15-year franchise period.
Time Warner Cable claims that it is unfair that Windstream would be required to pay only $4 per subscriber every five years to public access capital needs while TWC must provide $200,000 every five years. However, Time Warner Cable won't provide the number of subscribers it has in Lincoln so the city had to come up with an overall number to charge the cable MSO. Windstream told the city that it would be able to start providing service to about 50,000 homes sometime during the spring of 2015.
If the City Council approves Windstream's pending franchise agreement when it meets on Jan. 5, Lincoln would become a city that could provide an alternative video service provider besides cable and satellite.
Delivering IPTV is a new concept for Windstream, which had traditionally been content to just resell Dish Network (NASDAQ: DISH) satellite TV services.
Similar to AT&T's (NYSE: T) U-verse service, Windstream is also using a similar fiber-to-the-node (FTTN) architecture that extends fiber to a remote terminal (RT)-based DSLAM and uses VDSL2 to extend service over the last mile copper connection to each user's home. It also is equipping 500 Lincoln homes with fiber-to-the-premises (FTTP) network technology and expects to do more as housing developments arise.
While Windstream has not indicated if it will extend the IPTV service into other markets, it will likely face similar protests from Time Warner Cable or other area cable operators that have enjoyed a near service monopoly for decades.
- JournalStar.com has this article
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