Comcasting A Wide Net
Telecom giant promises to be nice.
Thursday, March 13, 2003
The nationwide takeover of cable television service from AT&T Broadband to Comcast late last year has elicited a few complaints from confused consumers. But the massive Comcast promises to deliver a technological future that is more local and less remote.
If the company lives up to its promises, customers from Monterey and Carmel to Salinas will be wired into a fiberoptic cable network supplying telephone, cable television and high-speed Internet service, for which they will pay a premium.
On Nov. 18, 2002, the Federal Communications Commission (FCC) approved the acquisition of AT&T Broadband services by Comcast, a Philadelphia-based telecommunications company. When the $47.5 billion acquisition became official, Comcast became the largest cable provider in the country. Comcast now serves 27 million cable viewers in 41 states, or 29 percent of Americans who watch cable television.
In approving the merger, the FCC found no problem at all in allowing the creation of such a large media provider. In fact, the agency decided such a giant would be a good thing. An FCC report concluded that "the merger is likely to spur new investment and to create synergies and efficiencies that will result in significant cost savings. Thus the merger will have a positive impact on the deployment of broadband services, which is an important FCC policy goal."
One condition of the merger was the divesture of a 28 percent interest in Time Warner Entertainment owned by the merged AT&T Comcast. FCC Chairman Michael Powell, son of Secretary of State Colin Powell said, "By the action we take today, the Commission finally severs a complex relationship of intertwining programming and distribution assets that has plagued the Commission for years."
Andrew Johnson is the vice president for communications for Comcast''s operations in California, based in San Francisco. He says the company will step up and make significant changes in the way Comcast does business throughout Monterey County. For one thing, Comcast promises to wire the region with the type of fiberoptic cable network already in place in Monterey and Carmel.
A fiberoptic cable network provides cable television, high-speed Internet service and telephone service although one underground wire system. Johnson says the work has been completed in Monterey and Carmel, with the rewiring of Seaside, Marina, Salinas and the rest of the Central Coast to be complete by 2004. As it is now, the infrastructure in Salinas is behind Monterey and Carmel because AT&T did not invest in new wire there, he says. Asked how much Comcast plans to invest in Salinas, Johnson would not talk. "I''d prefer not to speak in specifics on that," he said. "As a company we''re going to be investing hundreds of millions of dollars over the next two years."
In addition to promises to put up this "risk capital" in infrastructure in Northern California, Comcast also says it will establish an area vice president for the region and bring call centers that AT&T maintained in Arizona and Idaho into the Central Coast and South Bay areas. Johnson--who worked for AT&T until the switch--says Comcast is moving the call centers because it "feels strongly" that local people should help local people with local problems. He likened the difference between calling someone in Idaho about your California cable problems to trying to find news about Seaside in USA Today.
In addition, a vice president will set up an office to handle day-to-day operations in the area including San Jose, the Monterey Peninsula and Salinas. This area used to be overseen from AT&T offices in Denver and Basking Ridge, NJ.
In order to counter consumer frustration at distant telecom companies who can''t keep track of what''s happening on the ground, Johnson says, Comcast will provide an accountable individual to run the services in this area. Northern California was $1 billion-a-year operation for AT&T, Johnson says, but under Comcast it will be broken up into five $200-million-a-year operations.
"We have an active search underway to find a cable professional to act as a vice president for that area," says Johnson. "The buck stops at his or her desk."
Unlike some areas where telecommunication service is arranged at a county or regional level, cities here enter non-exclusive franchise agreements with the services. For Comcast, which provides video, telephone and Internet service all over the same wire, different technologies compete for the services. Cell phones, satellite television and different Internet service providers can compete with each aspect of Comcast''s service.
Some have complained of rate changes with the arrival of Comcast. Johnson says there have not been increases in consumer complaints.
"I get call center reports everyday," he says. "There''s nothing unusual that''s going on in the Monterey Bay area at all."
Johnson says that rate increases do not stem from the cost of infrastructure improvements but from increased services. More channels will mean higher costs, which mean higher rates.
"We added 24 channels to the line up there," Johnson says about recent changes to Carmel''s service. Other companies are available to provide satellite television, cellular phone service and Internet connections, though not in "bundled" form like Comcast. "There are other competitors they can choose if they''re unhappy with us," he says.
When Salinas catches up to the other cities, viewers will be paying more. "If the folks want additional channels, yes," Johnson says. "Right now they don''t have access to that. Right now they''re wondering why they don''t have it tomorrow."
But dangers exist with such a large media force. Last February, before it acquired AT&T Broadband, Comcast made headlines when it became public that it had been monitoring the Web sites its high-speed Internet customers surfed. It was not illegal but the publicity was bad enough that Comcast stopped watching its customers.
Johnson says Comcast won''t be watching what Monterey County customers watch on television.
"There are no plans to do that locally," he says. "You can''t monitor people''s television habits at all."