Time Warner Telecommunications announced it will begin offering cellular phone service in Rochester, N.Y.-the company’s largest cable television market-by reselling service from the city’s B-side carrier, Rochester Telephone Mobile Communications.
This will be the company’s first move into the wireless market. Time Warner has conducted several personal communications services trials involving wireless, cable and Code Division Multiple Access technology, but did not apply to bid on PCS licenses in auctions beginning this week.
“As new wireless licenses are issued by the Federal Communications Commission in the next two years, there may well be a surplus of network capacity in the market,” said Dennis Patrick, president and chief executive officer of Time Warner Telecommunications.
“There are other ways to go about PCS than (a license). We think spectrum will become a commodity, and the companies with leverage in that market must have had low acquisition cost, low operation costs and good branding,” he said.
The major trading area licenses being auctioned this month are “too wide” for Time Warner’s interests, Patrick said. “There are other options for us downstream. The BTAs (basic trading areas) are more attractive,” Patrick said. BTA licenses are set for auction in the spring.
Time Warner Telecommunications is a unit of Time Warner Entertainment Co. L.P., the nation’s second largest cable company, in which U S West Inc. holds a 25 percent interest. Parent company is Time Warner Inc.
The company has been stirring numerous pots of opportunity in tests across the country in recent years.
“The advantage of a company this size is it can do so many different things (to get into position),” said David Abraham, a telecommunications financial strategy consultant in Connecticut. “They have a very thoughtful strategy. (Cellular) is a starting point from which they can build a customer base. And ultimately what everyone wants to build is PCS.”
Time Warner performed a trial in Orlando earlier this year running digital CDMA signals through Time Warner’s cable network, which allowed customers to use CDMA handsets in the home, car and office using a single number. The test is part of Time Warner’s fiber cable-based Full Service Network, which will offer interactive entertainment, information and telecommunications.
Patrick said one Orlando test operated at 1.8 GHz, using remote cells and antennas connected by fiber, receiving instructions from a centralized switch.
Time Warner predicts it will take at least two years for its wireless networks to be fully established.
“We see this (Rochester) as an evolution, with the anticipation of evolving from resale into a facilities-based service. Branding, marketing and distribution will become deciding factors, but these are Time Warner’s strengths.” Patrick said.
Rochester’s A-side operator is Cellular One, whose primary owner is Associated Communications Inc. The market is estimated to have about 90,000 subscribers, according to an RCR Top 20 survey earlier this year.
Time Warner also has announced plans to offer conventional phone service in Rochester next year, as well as domestic phone service for New York City businesses. The company says it hopes to eventually offer cellular in many of its major cable markets.
Patrick served as commissioner at the FCC from 1983 to 1987, then was named FCC chairman from 1987 to 1989.