Comcast

FCC ruling hurts U.S. telcos

Dan O'Shea — Tue, 24 Jun 2008 08:42:30 -0400

Telcos have been gaining video customers lately, with an increasing number of them coming at the expense of cable TV companies. Meanwhile, the cable guys have been effective stealing voice customers from telcos. Heading into the second half of this year, you can likely expect both sectors to toughen up on their efforts to retain what they have been losing.

However, a ruling that occurred late last Friday at the Federal Communications Commission may ensure that telcos have a more difficult retention challenge ahead of them than do the cable TV firms. The FCC ruled that Verizon Communications, which had been accused by cable TV companies of unfair competitive practices, is not allowed to use information about its customers who were in the process of switching to cable voice in order to woo them back to Verizon before they make the switch. Comcast, Time Warner Cable and Brighthouse Networks said Verizon had been doing just that.

The regulations leave not only Verizon, but all telcos offering cable-like TV or IPTV in a tough spot because such information privacy rules have not traditionally been applied to the cable TV video business. For now, there appears to be a double-standard at work that favors the traditional cable TV players. Regulators should not just bend to the whim of a powerful telco like Verizon--they have already done that far too often--but neither can they responsibly allow one set of competitive marketing standards to be applied to one side of the telecom industry and not the other. The eventual ripple effect of this ruling could be felt in even the smallest markets, where an independent telco's chief rival for all services might not be another telco, but Comcast.

Telcos may have just been getting used to the Wild West mode of competitive behavior that has characterized the cable TV industry for years. Now, they need to watch their backs while having their ammunition rationed. --Dan

For more:
- read this report at The Wall Street Journal

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Ex-Bellhead Craddock to retire from Comcast

Dan O'Shea — Tue, 20 May 2008 11:24:08 -0400

Steve Craddock, senior vice president of new technology at cable TV giant Comcast, is set to retire on June 30. Confirmation of his retirement came during the industry's annual convention, The Cable Show, in New Orleans. Craddock was already a veteran Bell system technologist when he left Bell Atlantic (now known, multiple mergers later, as Verizon Communications) in 1994, just as the cable TV industry was beginning its broadband adventure and the traditional telco industry was experiencing its first delays in rolling out DSL. At Comcast, Craddock led the company's efforts in the cable modem business as Comcast and the cable TV industry jumped out to a huge lead in setting up customers with high-speed Internet connections. Back in the 1990s, it looked as if his departure from Bell Atlantic could be part of a trend of established telco technologists moving to cable. That trend may never have developed as fully as expected, but the cable modem express rolls on--Comcast now is preparing for the latest cable modem evolution with DOCSIS 3.0.

For more:
- read this report at Multichannel News

Related articles:
- Steve Craddock was talking about Comcast's eventual move to DOCSIS 3.0 this time last year. Steve Craddock report

Cablevision adds video subs, strikes Newsday deal

Tue, 13 May 2008 06:59:40 -0400

While some cable TV companies are taking an obvious hit from telco IPTV competition (see Comcast), others may not be seeing much of an impact. Cablevision Systems last week said it added 41,000 digital-video subscribers and 2,000 basic-video customers to its current 3.1 million video subscribers during the first quarter of this year, adding that it has seen little impact from Verizon Communications' FiOS service. The company also has moved aggressively into Verizon's traditional segments with its Optimum Lightpath data and voice services. In addition, the company said it will spend more than $300 million on rolling out Wi-Fi technology in the New York metro area and on Long Island over the next two years.

This week, Cablevision made another intriguing, though somewhat puzzling move, saying it will pay $650 million to acquire most of suburban newspaper Newsday. Arguably, Newsday could help Cablevision competitively by giving it more promotional heft for its offerings against whatever marketing blitz competitor Verizon may muster. It could also create cross-selling opportunities for advertisers that might be thinking of moving more money over to IPTV platforms. Still, newspapers as medium are weakening by the hour, so the benefits could be short-term at best.

For more:
- See this story about earnings and another about the Newsday deal at The Wall Street Journal
- and Cablevision's quarterly results

Related articles:
- Cablevision's Newsday deal seems unlikely to start a trend. Cablevision report
- Cablevision to rollout WiFi network. Cablevision WiFi report

Comcast takes video hit, but adds telephony subs

Tue, 06 May 2008 06:59:40 -0400

Is video becoming a point of market weakness for cable TV companies? That could be the case if we decide to invest in the trend suggested by Comcast's first quarter 2008 earnings report last week. The company said that it lost 57,000 basic video subscribers during the quarter, and even though it added about 494,000 digital video customers, the latter number was observed to be less than some analyst estimates, according to The Wall Street Journal. Comcast also saw its first-quarter profit dip about 12.5 percent compared to the same period last year. Still, it remains to be seen if video softness is an industry-wide trend. Time Warner Cable had said previously that it added both basic video and digital video customers during the quarter, and at least met estimates in both areas.

Meanwhile, Comcast added 639,000 digital telephony subscribers during the first quarter and almost half a million broadband Internet customers. Comcast now has about 5.1 million voice customers, and seems to be one of the chief beneficiaries of telco landline loss, but its ability to steal voice customers from telcos is not impressive enough to cover the higher-value video customers it is losing to the telcos.

For more:
- see this report at The Wall Street Journal
- read this blog post at ZDNet.com
- check out this follow-up at GigaOM

Related articles:
Comcast reported a profit jump in Q4 2007 Comcast report
Is Comcast planning a wireless network? Comcast report

Why Pivot mattered

Tue, 29 Apr 2008 06:59:55 -0400

Pivot, the wireless joint venture established by Sprint and four cable TV companies, bit the dust last week as the cable partners exited, but it should be considered neither a complete failure nor the end of cable guy adventures in the wireless market.

It is certainly true that Pivot was not successful enough, to the point where several industry observers last week seemed to enjoy a good laugh on the occasion of its demise. Still, it would be extremely surprising to hear that Comcast, Time Warner Cable, Cox Communications, an Bright House Networks learned nothing from the experience. At least a couple of these companies know from their earliest forays into the wireline telephony world that it can take years and several tries, to get a new business right.

Ultimately, Pivot may not have been the right market avenue or the right technology at the right time. There is still the potential that some cable TV companies could invest in a WiMAX joint venture involving Sprint and Clearwire. This has been rumored at least, though Sprint and Clearwire have not even gotten their acts together on that JV yet. Also, Comcast already has established its own wireless venture. Could it instead choose another wireless technology and business strategy?

Pivot mattered because in its way it brought a few cable TV companies closer to providing the one aspect of triple play or quadruple play bundles where major telcos have a clear advantage over them. Pivot is gone and telcos still have that advantage for now.

Cable TV companies also had wanted to use Pivot to integrate wireless with their TV offerings to support new applications like place-shifted content sharing. Now, that integration will take somewhat longer, and telcos have time to further develop and grow their IPTV offerings, new content applications and bundle service strategies. But cable TV companies will not make too many more wireless missteps, so use the time wisely.

For more:
- read this story at Light Reading's Cable Digital News

Related article:
Comcast was pretty excited about Pivot at this time last year. Comcast report

- Dan

Mediaroom pal Sigma offers new chip

Tue, 15 Apr 2008 06:59:20 -0400

Semiconductor company Sigma Designs has introduced a second-generation chip for IPTV set-top boxes that the company claims offers a 50% performance improvement. Sigma has been the only set-top chip contributor to Microsoft's Mediaroom IPTV platform. That might be kind of like a tight, but little-known garage band opening for The Rolling Stones: It is a surprising and tremendous gig to have, and you have to keep fighting off bigger names from taking over your position.

Of course, Microsoft's IPTV dominance can be compared to The Stones' reign over rock in other ways: Despite cracks in the facade, the power remains as full as ever.

For more:
- see this coverage at Light Reading's Cable Digital News

Comcast and BitTorrent make nice

Tue, 01 Apr 2008 07:59:50 -0400

Comcast and BitTorrent Inc. last week agreed to bury the hatchet and work together to try and make BitTorrent software run more smoothly on Comcast's network. The deal ends a contentious battle between the two companies that saw users and the FCC lambaste the company after it admitted delaying the transmission of data among BitTorrent users at peak times.

When legislators and some advocacy groups began to play hardball and suggest Comcast was intentionally blocking BitTorrent's P2P file sharing for its own gain, the issue earned some serious cred and the two foes began to play nice. Comcast has agreed to reconfigure its network management systems, creating a traffic management technique "more appropriate for today's emerging Internet trends." For its part, BitTorrent tacitly acknowledged Comcast's need to allocate bandwidth, with the understanding it no longer would be targeted by the company.

Comcast said it's deploying wideband Internet services using the DOCSIS 3.0 standard in about 20 percent of its households by the end of this year. It also plans to more than double the upstream capacity of its residential Internet service in several key markets by year end 2008. "We plan to take advantage of multi-carrier technology to further increase upstream capacity for all of our broadband customers in advance of the full DOCSIS 3.0 roll out," Comcast said.

For more:
- Read the Philadelphia Business Journal story
- And Comcast's release

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Court approves new MDU rules

Tom Burton — Tue, 11 Mar 2008 07:59:40 -0400

An appeals court has rejected an attempt by the National Cable and Telecommunications Association to stop new rules that abolish exclusive service contracts between cable operators and owners of multiple-dwelling units (MDUs). After much lobbying from the telco industry, the Federal Communications Commission adopted the new MDU rules last fall, declaring it hoped to open the MDU sector up for competition.

By a 2-1 margin the U.S. Court of Appeals for the D.C. Circuit rejected the NCTA's attempt to have the new rules postponed. The rules now apply for new agreements but questions still remain over the legitimacy of the many MDU agreements in place before the new rules took force last week. The court has yet to give its opinion on these existing agreements. The NCTA says the FCC in 2003 unanimously approved exclusive contracts between cable operators and MDUs.

A decision to void these contracts would be a major fillip to Verizon and AT&T as they aggressively rollout their IPTV networks. Verizon has been due to announce the deployment of its FiOS network into New York city shortly. The FCC MDU ruling has been part of a concerted campaign by FCC chief Kevin Martin to challenge the dominance of the major cable companies, in particular Comcast. Martin claims the lack of competition has seen cable subscriptions rise by an average of 10 percent per annum over the last decade.

For more:
- Cable fights the FCC in the courts Article

Related articles:
Martin targets transparency Article
Comcast defends network management Article

Cable critical to next gen digital services

Tue, 26 Feb 2008 06:59:55 -0500

It is hard to overstate the importance of the Federal Communication Commission's investigation into Comcast's traffic management practices. As FCC chief Kevin Martin yesterday said: "I think if Comcast did not also provide video services, we would not be here having this debate." The TIA's new market report dramatically observed bundling is fast becoming the norm for all players. In six years from 2005 to 2011 the number of users bundling is predicted to go from 14 percent to 82 percent. In other words if you can't offer a bundle you are not going to have a business. Marry that with the 50 times increase in bandwidth demand predicted by 2015 and you clearly see the picture.

For the moment this is a cable problem; its network architecture is a legacy of its TV past and simply shares the bandwidth with houses in a given node.
For an FCC genuinely interested in competition, it has to find a definition of reasonable traffic management that ensures cable can offer a quality of service consistently across all three plays--voice, video and data. No doubt users should be told what they pay for and on what basis an ISP will manage the traffic. But a conclusion that in practice damages service quality will be hugely destructive to consumer choices and, in the longer run, to prices and innovation. Take the cable guys out and you quickly find in practice it is friends AT&T and Verizon who will gate-keep the next generation of digital services. Tom

Comcast fails to sway Wall Street

Tom Burton — Tue, 19 Feb 2008 06:59:40 -0500

Comcast continues to struggle to persuade investors its triple-play strategy is winning. Its share price is down 35 percent over the year, making it the seventh-worst performing stock on the NASDAQ 100 index. Despite a 54 percent increase in Q4 income and a dividend payment, CEO Brian Roberts is under pressure from major shareholder Chieftain Capital Management Inc., which last month called for his ouster. The offer of a dividend did spur a small rally last week with prices up 95 cents to $20.19 at market close Friday.

Roberts has overseen an aggressive $6 billion investment to equip Comcast to provide triple-pay services across its cable footprint of 40 million homes. Comcast has been the most successful non-telco in signing up customers to its digital voice and high-speed Internet offerings. It is now the fourth-largest supplier of residential telephony in the U.S. Both Verizon and AT&T's U-verse service are aggressively ramping up their IPTV roll outs, and both are expected to impact Comcast's subscriber growth in its traditional markets as well as cap its pricing.

Roberts said Comcast expects revenue to increase 8 percent to 10 percent this year, and its capital expenditures as a percentage of revenue to decline to 18 percent in 2008. Comcast is also under tight scrutiny by the FCC, where chair Kevin Martin has singled Comcast out for special attention. He claims Comcast is too dominant as evidenced by the 10 percent average yearly pricing increases over the last decade.

For more:
- Comcast Q4 income up 54 percent Article
- Comcast investors seek buyback, payout as shares drop Article

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Comcast raises profit, declares dividend Report
Comcast defends P2P management Report