When Comcast Corp. took over AT&T Broadband’s Salt Lake City operation late last year, the name on the door wasn’t the only change the MSO made. Indeed, Comcast installed a new area VP, new marketing director and new ad sales manager in the property that counts 240,000 basic video customers. “We brought in some new executives, but I was pleased with the talent the system already had in place,” says Gary Waterfield, area VP and a Comcast veteran of 22 years. “We got to take the best of AT&T Broadband and Comcast and blend them into a great team.” Like all other AT&T Broadband properties, Comcast went to great lengths to introduce and indoctrinate employees to its way of thinking and its particular corporate culture. Waterfield says it wasn’t hard, but he also notes the changes in culture are still occurring. As a former AT&T employee, director of customer operations Merlin Jensen says he was impressed that Comcast’s leaders spent time visiting the system and introducing themselves, and so were his staffers. The event — an all-day pep rally that featured CEO Brian Roberts, chairman Ralph Roberts and Comcast Cable president Steve Burke — did exactly what the folks at corporate wanted it do: inspire employees to go out and do their best, believe in their company and feel good about working at Comcast, Jensen says. “The level of acceptance was not necessarily surprising, but it was definitely wonderful,” Waterfield says. On the flip side, existing AT&T Broadband employees who had become accustomed to centralized management were pleasantly surprised by their new level of control over operations. “I’d heard a lot about how important local management was at Comcast,” says Jensen. “But I never imagined how much power we’d have to make sure customers are well taken care of. It’s been one of the nicest and biggest changes [since Comcast took over last year].” It’s taken some time for employees to get used to the new way of doing things. Waterfield himself is known to visit outlying offices regularly, take customer calls at local call centers and go into the field with technicians. “The first time I visited the call center people were very surprised, and when I went out on a service call in the field it was the talk of the department,” he says. “But that’s the Comcast culture. It’s now sunk in with employees, and it’s beginning to sink in with the community.” Also helping customers see Comcast in a better light these days is the company’s pledge to spend $100 million in 2003-’04 to finally finish an upgrade of its 8,500 miles of plant as well as fulfill the promise of new services. Of course, skepticism had run high until recently because similar promises have been made and broken time and again by former owners Tele-Communications Inc. and AT&T Broadband. But Waterfield says 70% of the system is already upgraded and Comcast is rebuilding between 250 and 300 miles a month right now. The project should be completed in the first quarter of next year. “Promises have been made before and broken before,” he says. “But this time, I have the money in the bank and we’re doing what we promised. That goes a long way in convincing customers they can trust us.” It’s also gone a long way toward convincing employees they can make those promises with a clear conscience. “The amount of upgrading that has been done this year alone took three years to complete before,” Jensen says. “It shows that Comcast is serious about getting through the pain and moving on to roll out new services. That makes employees feel good and they can, in turn, make customers feel good about taking our services.” It’s that kind of attitude that is turning around the system’s subscriber numbers. Although he declined to provide specific figures, Waterfield admits that the Salt Lake City system lost customers over the past couple of years. DBS providers have aggressively marketed special programs to lure disgruntled cable customers tired of delays in the rebuilding of plant and of broken promises — and they’ve been successful in doing so. “But,” says director of marketing Todd Beauchamp, “the days of the dish in this market are numbered.” Still, Scarborough Research puts dish penetration in the Salt Lake City area at 27% — 46 points higher than the national average. Comcast is trying to reclaim as many customers as it can by advertising its dish buyback program. Beauchamp says the program has worked well — so well, in fact, that supervisors in a nearby warehouse called him recently to note the facility was filled to capacity with nearly 4,000 dishes and wanted to know what to do with them. But even more important than winning back and gaining new customers, he says, is the introduction of new services. High-speed data service has been a huge success in the areas where it’s been launched. “This is a highly educated market with lots of culture, and high-speed Internet is a highly desirable product for consumers,” Beauchamp says. “Our HSD numbers are ahead of plan at this point.” While not divulging specifics, Waterfield and Beauchamp say HSD figures in Salt Lake City are higher than or as high as the markets they worked in before coming to Salt Lake. (Waterfield moved to Salt Lake City last fall from Charleston, S.C.; Beauchamp had been with Comcast in Mobile, Ala.) Even so, the numbers remain below the national average, according to Scarborough Research. PC penetration in the areas in which Comcast serves is above the national average at 79% (or 16 points higher than average). Yet cable modem penetration, according to Scarborough, is only 6% (31 points lower than the national average). One explanation: Only about 60% of Comcast’s plant is HSD-ready today, Waterfield admits. Scarborough shows that 52% of Salt Lake City Internet surfers use dial-up connections and another 8% use another form of connection (generally DSL or wireless). Comcast isn’t relying solely on HSD to pump its customer numbers, however. The system plans to offer a tier of high-definition services later this year and will launch video-on-demand in 2004, according to Waterfield. Those services should boost Comcast’s digital video numbers. Scarborough puts digital cable penetration in the market at 10% — 19 points below the national average. Again, the partial nature of the system’s rebuild could have something to do with that. Meanwhile, Comcast continues to pursue and convert “one customer at a time,” says Beauchamp. Jensen and his team rolled out a program in May designed to improve customer relations and communications called the Comcast Quality Experience. The program includes weekly “calibration sessions” designed to recognize weaknesses as well as strengths in dealing with customers, according to Jensen. Supervisors listen to customer calls and then talk with customer service representatives to identify things the CSRs should continue doing, start doing and stop doing entirely. Special Comcast agents monitor eight customer contacts a month and call back each customer to gauge their satisfaction with the experience. “It takes a lot of time and effort, but it’s worth it if customers feel better about the company and their contact with us,” Jensen says. Another tactic that is being used throughout Comcast’s service territory in Utah, Beauchamp says, is selling door-to-door. “Some of the best ways to sell the services we’re offering today is to let customers try them out firsthand,” Beauchamp says. “And no other means of marketing works better than one-on-one demonstrations.” The company is also listening to what customers want when it comes to programming. Although Salt Lake City is pretty homogeneous — 96% of the population is Caucasian, according to Scarborough — the Hispanic population is growing at a fast clip. Comcast responded to demographic changes earlier this summer by adding three new Spanish-language channels to its digital lineup. The company has also revamped its advertising sales department. VP of ad sales Jeff Carroll has brought in some new talent, and in February, Comcast launched a hardwire interconnect that links all but one area of the MSO’s service territory in Utah. That’s saying something: Comcast’s Salt Lake City service territory covers most of the state and Salt Lake City is the largest geographic DMA in the country spanning some 84,900 square miles, according to Carroll. Comcast has created 13 zones and inserts ads on 31 channels, which should help turn around the sales picture quickly, he says. TV ad sales revenue for the entire market is down about 5% this year compared to a year ago, Carroll says, but he notes the decline is actually the result of a big spike in sales last year when the 2002 Winter Olympics were held in Salt Lake. Since launching the new hard interconnect, Comcast’s national business is up 14% from a year ago despite a trend that has seen national ad sales revenue slip 3% so far this year, Carroll says. Still, national ad sales only make up about 30% of Comcast’s total ad revenue in Salt Lake City. Carroll expects to see that number continue to rise with the hard interconnect. In the meantime, local and regional sales are big for Comcast because of its ability to zone and provide local and regional advertisers the ability to sell to only select areas — something the local broadcasters can’t offer. Like most other ad sales departments, Comcast’s strongest ad sales category is automotive, and the system’s partnership with Vehix.com, a Web-based car selling service, helps push those numbers on a regular basis. Nonetheless, Carroll wants to goose that business even further this year now that he can sell specific zones. “Our research shows that car buyers have a small, distinct geographic area that they will travel to to buy a car. We can make a case for zoning to local auto dealers that the broadcast stations can’t,” he says. “It’s already resonating with advertisers.” Clearly, the biggest challenge Waterfield and his crew have is finishing the upgrade — on schedule and on time. At this point, it looks like that will happen. Jensen’s job is to make sure the soft side of the system — the company’s personnel — is up to speed with the new services that are being launched and trained sufficiently to handle customer queries and problems. “Our greatest challenge is our greatest opportunity,” Beauchamp says. “We want to make sure we are the one-stop shop for consumers and we want to make sure dish customers know that cable has a lot more to offer.” “There’s a quiet confidence that is building here,” Waterfield says. “We’re making promises and we’re keeping them. We have the advantage over the competition with our technology. Now we’re taking advantage of our ability to serve customers.” EMPLOYEES: 780 MILES OF PLANT: 8,500 PERCENT UPGRADED: 70% NUMBER OF FRANCHISES: 138 BASIC CABLE SUBSCRIBERS: 240,000 BASIC CABLE RATE: $8.68 to $13.32 DIGITAL CABLE SUBSCRIBERS: N/A DIGITAL RATE: $9.95 to $58.45 on top of standard basic cable HIGH-SPEED INTERNET SUBSCRIBERS: N/A HIGH-SPEED DATA RATE: $42.95 to $55.99 VOD: Launch planned for 2004 HDTV: Launch planned for later this year TELEPHONY: Launched in 2000; prices start at $14.90 TELEPHONY SUBSCRIBERS: N/A AD INSERTIONS: 31 interconnected insertion channels SOURCE: COMCAST Waterfield, with Comcast for 22 years, moved to Utah last November from Charleston, S.C., where he was the system’s VP/GM. He has held various leadership roles with Comcast in New Jersey and Florida as well. He earned a bachelor of science in business administration from the University of New Hampshire in 1975. He was born in Milwaukee and raised in New York state. Beauchamp has more than 16 years of cable experience. Previously, he was the director of marketing for Comcast in Mobile, Ala. He graduated from the University of Michigan, Ann Arbor, in 1987, and began his cable career in sales with Cablevision Systems in Kalamazoo, Mich. He then landed a position as director of sales and marketing for Cablevision Systems, which became Mediacom in Gulf Breeze, Fla. Jensen has nine years of call center experience as well as experience in credit and collections management. Before joining the cable industry, he worked for Discover, Universal and AT&T. He has been in the cable industry three years, having worked for AT&T Broadband prior to the Comcast transaction. Carroll, with Comcast for ten years, transferred to Utah from his position as director of ad sales in Baltimore. Previously, he was the general sales manager in Washington, D.C., and local sales manager in Richmond, Va. He has twice won the prestigious Comcast Pinnacle Award in recognition of his leadership. Comparison of consumers in Comcast’s Salt Lake City service area to the top 75 market average.

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