Comcast Brings More Broadband to the Hinterland (1 Viewer)


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Apr 18, 2005
DeKalb County, AL
Nine of every 10 Vermonters would be able by the end of next year to receive cable television programming and high-speed Internet service under a deal with Comcast Corp recently approved by state regulators.

The agreed-upon extensions of cable lines will take place in every Vermont county, says Christopher Campbell, director of the Vermont Public Service Department's telecommunications division. Some of the largest additions of cable line are due to take place in Windham and Windsor counties, he notes. But the under-served Northeast Kingdom will see only limited gains initially, since Comcast will not hold the cable franchise for most of Essex County, Campbell notes.

The sale of bankrupt Adelphia Communications' holdings in Vermont to, initially, Time Warner Cable and, ultimately, Comcast was given a go-ahead by state officials in late December on the condition that Comcast fulfill Adelphia's obligations to extend cable lines throughout most of the state's more rural areas during the next two years. That move will close much of the gap in cable service, Campbell says, noting that about two-thirds of Vermonters already had potential access to cable as of two years ago.

While significant to the long-running effort to make broadband Internet service available throughout the state, the cable expansion plan "won't be a real revolution," Campbell says. "It doesn't mean close to a doubling or tripling of the miles of cable in place in Vermont."

The buildout plan does include a specific timetable, with penalties to be levied on Comcast if deadlines are missed, says Public Service Department spokeswoman Deena Frankel. The agreement calls for the addition of 750 miles of cable by the end of this year, another 500 by the end of 2007 and up to 300 more miles by the following year, bringing the total buildout to about 1,500 miles.

Adelphia had pledged under the terms of an earlier settlement to add 1,262 miles to its cable network in Vermont, which currently serves 112,000 customers. But because the bankrupt company fell short of that target, up to 300 more miles must be put in place in accordance with the obligations that Comcast would inherit. Adelphia has estimated the cost of the extension at $35 million.

In its ruling, the Public Service Board said that construction of an additional 1,500 miles of cable "advances telecommunications policy in Vermont, which is to bring broadband to 90 percent of Vermonters by the end of 2007 and to achieve universal availability by 2010."

Philadelphia-based Comcast, the country's largest provider of cable services, welcomed the Public Service Board's decision. "Upon completion of this transaction, Comcast will begin serving Vermont residents with the most advanced broadband and entertainment services available," Comcast executive Mark Reilly said in a written statement.

But the $17.6 billion Adelphia sale must still clear federal regulatory hurdles and win approval from bankruptcy overseers before Comcast can take title to the Vermont cable operations. Approval could come by mid-year, although critics say they will fight hard at the Federal Communications Commission to block the deal.

The Media Access Project, a Washington-based public-interest law firm, argues that the pay-per-view venture planned by Comcast in partnership with Time Warner would violate FCC limitations on the size of any single cable company. But Comcast and Time Warner officials say that the 1999 FCC limitation cited by the deal's critics is no longer binding as a result of a court ruling in 2001.

Pay-per-view, also known as video-on-demand, is among the expanded services that Comcast plans to make available to Vermont customers. The company will significantly broaden the pay-per-view options that Adelphia has offered, Comcast officials say.

Higher-speed Internet access will also be provided to subscribers in Vermont, Comcast spokesman Marc Goodman adds. Comcast plans to increase its residential broadband speed from 4 megabits to 6 megabits per second. The enhanced service would cost $43 a month - roughly comparable to what Adelphia charges through some package deals for a slower connection. Comcast will also offer an 8 megabit- per-second link for $53 per month.

The company further plans to offer Vermonters an Internet-based local and long-distance telephone service at rates potentially lower than those charged for some landline or cellular phone calls, Goodman says. And Comcast will soon go into the cell phone business as well through a joint venture with Sprint Nextel.

No one doubts that Comcast has the resources and technological capability to attract additional customers in Vermont. The corporation, which includes 74,000 employees, already provides cable TV services to 21.5 million Americans. Its highspeed Internet connections reach 8.1 million customers and its voice services are used by 1.2 million subscribers in 35 states.

Comcast's cable division reported a nearly 10 percent increase in revenues, to $5.3 billion, for the third quarter of 2005 in comparison to the same period a year earlier. Revenues generated by the company's high-speed Internet service grew by more than 25 percent in the third quarter of 2005, reaching a total of $1 billion.

Comcast says it has no plans to raise the rates Adelphia now charges customers in Vermont. But Congressman Bernie Sanders has expressed skepticism about the durability of the company's commitment to hold the line on prices.

If the deal does go ahead, Adelphia will cease to exist as a brand name in Vermont. Many of its employees in the state are expected to retain jobs with Comcast, however.

Despite the difficult circumstances under which it has operated since declaring bankruptcy three years ago, Adelphia takes pride in what it has been able to achieve in Vermont, says one of the company's local executives.

"We've done so much in Vermont in the way of investment," says Lisa Birmingham, Adelphia's government affairs director in the state. "We feel we're turning over a pretty good operation to Comcast in Vermont."

Copyright Boutin-McQuiston, Inc. Feb 01, 2006

Source: Vermont Business Magazine

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