Tuesday, June 27, 2006

Regulatory uncertainty creates "double play" opportunity for Comcast expansion

As the big telcos including AT&T and Verizon battle it out in Sacramento with the cable companies over legislation that would preempt local government cable TV franchising authority, the cable companies have an opportunity under the current rules to expand and grab market share from the telcos.

In El Dorado County, Comcast is the franchisee. If Comcast's executives were smart and aggressive, they would put the pedal to the metal and dramatically expand in the county while AT&T is distracted down in River City fighting for the right to go around county authorities with a state authorized franchise. It's a strategy right out of the 1980s business bestseller In Search of Excellence that advised a bias for action to gain competitive market advantage.

Earlier this month, this blog reported Comcast plans to launch digital phone service across central California from Chico to Fresno as early as first-quarter 2007. Digital phone service -- and most certainly high speed Internet -- would likely be wholeheartedly embraced by El Dorado County residents who have for years experienced noisy and unreliable voice service over AT&T's aging copper cable plant and who lack broadband access to boot.

It's a compelling double play opportunity that Comcast could play out under the county franchise agreement provided both the county and Comcast waive a provision in the agreement requiring new subscribers outside Comcast's current service area to subsidize expansion costs. And it would likely produce a high take rate and rapidly expand Comcast's customer base in the county.

Comcast should step up to the plate and take advantage of the political uncertainty distracting its would be competitors now that Comcast going into full telco mode and expanding beyond its core entertainment service business model. A "triple play" bonus would be Comcast's ability to sell these newly acquired "double play" customers television programming services.

No comments:

Web Analytics