When it comes to competing in the country’s top market, New York, a certain set of song lyrics sum it up well: If you can make it there, you can make it anywhere. Indeed, battling against DBS and now Verizon in the New York metro area, Cablevision has been tested, but our 2006 Top Operator Award winner has stepped up its game considerably.

We’ve chosen our words carefully. Competing in the New York area often resembles a game. And with 3.1 million Cablevision subs up for grabs, it’s a highly lucrative one, The contest features numerous lead changes and ugly marketing campaigns that make the 2008 Democratic presidential race seem benign. As of this writing, Cablevision appears to be ahead. Regardless, the MSO arguably is waging cable’s most effective war against Verizon FiOS, meriting our Competition Award.

Perhaps the most important competitive goodie enticing Cablevision’s subs to remain loyal is the recent addition of free Wi-Fi on most of Long Island and parts of Connecticut, Westchester and New Jersey. The evidence is compelling. In mid-June Cablevision reported customers had accessed the Internet more than 2 million times using its Optimum Wi-Fi freebie. They are averaging more than 1 million minutes online per day, the MSO added. Cablevision has a 75% broadband market share.

Another incentive, Cablevision plans to double the downstream speed of its Wi-Fi up to 3 mbps.

With New Yorkers constantly rushing, it’s not difficult to see why Cablevision’s rollout in late April of the fastest Internet speeds in the cable and telco business — 101 megabits/second downstream throughout its service area, and 15 mbps upstream — was clever. It’s also another way to make sure Cablevision maintains its high-speed Internet delivery to 53% of the homes in its footprint.

New Yorkers love to comparison shop, but with prices changing almost hourly, it’s difficult to make a static comparison. Here’s an attempt. Verizon’s top Internet speed is 50 mbps and its starting cost is $140/month, plus a free wireless router. With a faster speed, Cablevision’s charging $99.95/month. The triple-play price is comparable for Cablevision and Verizon, around $95 per month. The rub is when you add the new high-speed Internet product. For the 101 megabits/sec service you’ll pay Cablevision about $175. Verizon’s high-speed is only 50 mbps down, and you pay $160. Advantage, Cablevision.

Of course there is a slew of other factors. Until recently Cablevision had the monopoly on local news channels with its seven News 12 stations (FiOS launched one in the spring); the MSO continues to offer its loyalty program, Optimum Rewards, to triple-play customers; and it’s now providing more than 100 HD channels. There’s another part of Cablevision’s strategy: Provide better services than the competition. In this, Cablevision seems to be doing well. A 2008 J.D. Power & Associates survey named Cablevision the best provider of residential phone in the Eastern region. In late June of this year, J.D. Power ranked Cablevision tops in customer satisfaction for data services to home-based businesses. Large enterprises named Verizon as best in customer satisfaction in the same survey.

With such high stakes — they call it the Big Apple for a reason — the only certainty is that the gamesmanship will continue.

Fast Facts

  • With thousands of new users discovering the free Optimum Wi-Fi, the service registered its second million-user session in less than half the time it took to surpass the initial million-user session, fewer than three months..

  • In Q1, Cablevision lost 23K basic subs but added 178K digital subs; Internet subs rose by 142K and phone was up by 245K subs, or 15%, from the year-ago quarter.

 

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