Charter is keeping pace with the rebirth of Worcester, Mass., having rolled out digital phone, hi-def, DVRs and local VOD. But will this `City on the Move’ continue to play ball with charter and work with the mso on its communications master plan? By Simon Applebaum Drive north on Interstate Highway 290 in Central Massachusetts, and eventually you’ll glimpse a skyline dotted with new buildings and construction equipment. This city on the rise is post-industrial Worcester, Mass. Undergoing a renaissance, Worcester has benefited from an infusion of $1.3 billion in facilities funds approved by city officials over the last two years. Worcester’s cable operator, Charter Communications, is undergoing a rebirth of its own and is stepping up its community involvement, and none too soon. Verizon’s FiOS TV reportedly is looking to break into the market. Charter has added incentive to make certain it remains a major player in the local resurgence: Worcester is developing a master plan for local communications service. Requests for proposals for that plan are due at the end of May, after which city consultants will make recommendations around October. Worcester assistant city manager Thaddeus Jankowski declined to tell CableWorld if Verizon submitted a proposal. A Verizon spokesperson also declined to discuss whether or not the company is submitting a bid. Charter Central Massachusetts VP/GM Georgia Griffith and government relations director Bob Spain have met with city officials about the master plan process, which they say is separate from the renegotiation of the system’s franchise contact, expiring next January. More details on services covered under the master plan, and the timetable for rolling them out, are expected later this month. Those details will influence Charter’s response to the request for proposals, Griffith says. "The city needs this kind of plan, and we’re waiting for more guidance on what it will do," she says. "At this point, we don’t believe it will impede franchise renegotiations." Griffith declined to speculate on what Charter could gain or lose from having its proposal accepted or rejected. "What we have to concentrate on is how we move forward on our franchise," she says. CHARTER’S NO. 1 WEAPON: PHONE City officials may be mum about a telecommunications pitch from Verizon, but Griffith is certain the telco is coming—she acknowledges that the threat of FiOS TV is a big factor behind the pace of Charter’s rollouts, especially digital phone. Verizon has launched FiOS in three Boston suburbs (Woburn, Lynnfield and Reading) and is negotiating with 40 other communities statewide for franchises, according to Verizon. Griffith says six towns in her system’s area have been contacted; Verizon declined to confirm Griffith’s claim. Griffith is also focused on containing DBS penetration. Worcester’s DBS customer count is a bit more than 6,000, about 8.4% of the population, according to Media Business Corp. That’s not low enough for Griffith. "The priority now is telephone, telephone, telephone, followed by the triple-play bundle. You have to stay ahead of what’s competing with you and transform," she says. "We’ve reached the point where customers have alternative choices on every product we market. If we don’t leave them delighted with what we do, they may make the choice to go somewhere else." Charter believes digital phone is living up to early internal projections. Almost 7,600 customers signed up for the system’s telephone offering five months after it was launched last August. So far this year, Charter has installed digital phone for another 8,000 customers. Griffith says a considerable number of those phone subscribers are also taking digital cable and/or high-speed, based on their satisfaction with Charter’s phone service, although she declined to provide specific numbers. When telephony was launched, Central Massachusetts marketing director Dennis Jerome created a promotional campaign that placed equal emphasis on the ability of customers to retain their current phone numbers and on the offering of a monthly rate lower than Verizon’s. "People in this area have had their numbers for years and don’t want to change them at any cost for any provider," Jerome explains. "Staying with the same number is a gigantic selling point." Charter charges $34.99 a month for digital phone (as part of a digital TV/high-speed/voice bundle), while Verizon’s state rate is $39.95 per month for features similar to Charter’s, including unlimited long distance and caller ID. For this promotion, as well as for rollouts of HDTV, DVRs and local VOD, Jerome used a mix of top 40 or soft rock radio station commercials, cross-channel promos, local print and outdoor billboards. Since Worcester residents get their broadcast TV from Boston or Springfield-based stations (there’s no city-based major broadcast channel), Charter avoids broadcast promotion. It’s too costly for the audience in mind, Jerome says. But soon, Jerome may make an exception to better attract Latinos in Worcester, who make up 15% of the population, according to the 2000 Census. He is talking to WUNI-TV, Univision’s Boston affiliate, about an extended buy. ROLLOUTS AND DUGOUTS Over the last 12 months Charter has made Worcester’s slogan, "A City on the Move," its own credo: In addition to digital phone, it has launched high-definition TV, DVRs and local video on demand for its 165,000 customers in or near Worcester. Combo digital/high-speed/phone bundle marketing begins in a few months, as will an increase in Internet access speed from 5 to 10 megabits. Charter’s Spain remembers when the area was stuck in the mire, rather than "on the move." Before joining Charter in 2002, he was town administrator for Millbury and Uxbridge, both near Worcester, the state’s third-largest city by population. Although Worcester’s annual unemployment rate bounced around 5-6% for years—the same as the state rate—there was no impetus to modernize downtown. The appointment in early 2004 of city manager Michael O’Brien and a new city council set things in motion, according to assistant city manager Jankowski. The revitalization included the addition last year of the minor league Worcester Tornadoes, who play in the eight-team Can-Am League. The Tornadoes won the Can-Am championship in a game Charter carried live last summer on WCTR-3, the system’s local channel. Also new are the Worcester Sharks, an American Hockey League team (affiliated with the NHL’s San Jose Sharks), whose first season begins this October. MAYOR MURRAY ON CHARTER TV Charter’s WCTR-3 should help keep the local cable operator in a positive light as the city peruses proposals for the master plan and renegotiates the franchise agreement. Since local programming director Michael Marcy took the helm in 2003, WCTR has expanded local news coverage, added live coverage of Tornadoes games and introduced a pair of weekly series featuring Mayor Murray, O’Brien and other elected officials. Most of WCTR’s original content gets a second window through local video on demand, which premiered last spring. Mayor Murray’s half-hour show, The Mayor’s Forum, spotlights city issues and personalities. Murray, O’Brien and some of their legislative colleagues often turn up on City That Reads, where they read selections from books. The show often covers literacy events at city libraries, schools and hospitals, where local celebrities get into the act. "We’re showing how the city is finding itself again," Marcy says. Charter’s local programming "has a multiplier effect in building confidence and attracting more people and businesses to our city," Murray adds. Comcast Spotlight sells ad time for WCTR, as well as for 41 other channels running on Charter’s Worcester system. Ad sales for the service were up in 2005 over 2004, mostly owing to the addition of Tornadoes’ games, Marcy says. Spain, meanwhile, is confident Charter will continue to be one of the prime movers behind Worcester’s regeneration. "The relationship is good and we’ll have both sides happy with the result," he says of the upcoming franchise negotiations. Charter Central Mass. by the Numbers Employees: 280
Miles of plant: 4,000
Homes passed: 235,000
Bandwidth: 860 MHz
Percent upgraded: 99%
Basic subs: 165,100
Basic penetration: 70%
Basic rate: $16.44/mo.
Digital penetration: 68%
Digital tier rate: $57.99-75.99/mo.
HSD penetration: 47%
HSD rate: $30.99-$41.99/mo.
HDTV: 12 channels
DVR rate: $9.99/mo.
VoIP subs: 13,600
VoIP penetration: 6%
VoIP rate: $34.99/mo. (with cable); $44.99/mo. (without cable)
Ad insertion: 42 channels Source: Charter

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