Any guesses what the next all-digital cable system will be? If you go by track records, the system Comcast runs out of an industrial park in White Marsh, Md., deserves a spot on anyone’s short list of candidates. For the last half-decade, the operation serving about 348,000 basic customers in Baltimore, Howard and Harford counties has been among the first managed by Comcast to offer digital service, high-speed Internet access and high-definition TV. Moreover, it was the first Comcast system to roll out digital video recorders. Two months ago, it presented state government sessions on demand, another first. Another clue that Baltimore Metro Counties will be the next system, after Charter Long Beach, to go all-digital (or, more accurately, the next to offer digital "simultrans"): Under engineering director Sean Yackulak, the system is preparing to build a bandwidth-expanding, regional all-digital/IP architecture linking several Comcast systems in the Mid-Atlantic states. Meanwhile, Comcast’s Baltimore suburbs system is proceeding as if all-digital is a fait accompli. "I expect we’ll have an announcement soon about all-digital by our company, and we’ll see what happens," says Brian Lynch, VP/GM for the area and a 25-year cable veteran (the last 13 with Comcast). "You have to prepare your people and your plant for this. By going all-digital, we can remove a quiver from our competitors. We want to give our digital customers a better experience, and we have to grow the product. Spending the time upfront to educate your people and upgrade your plant is critical. Maybe that’s why we’re a place our owners came to more than once to test new products or deploy them first." Baltimore Metro Counties is getting ready to deploy Comcast’s voice over Internet protocol telephone service, otherwise known as Comcast digital voice. Comcast CEO Brian Roberts told an analysts briefing last month that the service will launch this year; system managers say digital voice might be deployed in 18 months. Some of the system’s 240 customer service representatives already have taken field trips to New Castle, Del., one of three Comcast markets participating in VoIP service trials last year. Training personnel will visit New Castle this month, and a desktop software program on VoIP fundamentals will be distributed to CSR and technical employees this spring. The area’s demographics make Lynch’s system even more appealing as an early launchpad for new services. About 69% of area households make more than $50,000 a year (40% higher than the national average as tracked by Scarborough Research). Nearly 75% of the households own a computer. Even more important, just 13% of area households are DBS customers (33% below Scarborough’s national DBS penetration average). Comcast Goes Public Lynch attributes the low DBS penetration to Comcast’s customer service upgrades and a more aggressive retail strategy. For every customer Comcast loses to DBS, the system gets 1.2 customers back through buyback programs, DBS home visits from system marketing personnel and expanded presence at local retailers. "We’re much better prepared to make our case with customers than we used to be," Lynch says. "Early on, when people left for DBS, we didn’t understand why they left and how to counter it. What’s happened since is we’re not only delivering quality customer service, we’re promoting that delivery in all sorts of public venues. Also, we’re clear about the value of new products like HD." For the last 18 months, Comcast has tripled the amount of retail space it’s used to showcase its products, according to marketing director Chris Shea. Radio Shack, Circuit City and Best Buy stores in all three counties feature Comcast displays or kiosks devoted to advanced services. Weekly circulars at Best Buy feature HD, high-speed and VOD offerings from the system. Comcast set up kiosks in many of the area’s large shopping malls. In what may be one of the most unique retail ventures at the system level anywhere, Comcast struck a deal with Gramophone, the Baltimore area’s largest upscale consumer electronics chain, to display HD and other advanced products. Through the deal, Comcast has the chain’s field crews install services. The first step in the overhaul of customer service was undertaken in late 2003, when Comcast created a consumer advisory group, which focuses on out-of-the-ordinary service requests. The group attempts to solve unusual customer problems in one shot, says senior call center manager Julie Cox, another 25-year cable vet. "The challenges range from someone with nine rooms in her house and [who] wants cable in all those rooms, to the person who can’t make their schedule fit for an installation. The team digs into why these things happen and [makes] things right," Cox says. At least two CSRs work the advisory group shift each day; for some assignments up to five CSRs make up the group. Positive customer reaction encouraged Cox to launch a "beat" system for her CSRs last July. Although service reps still receive broad training, each deals with a specific service issue most of the time. Some handle repairs, for instance, while others handle loss of cable service or high-speed data problems. If one beat has an above-average call volume, service reps from other beats pitch in. "The [service reps] are better motivated because they focus on what they do best," Cox says. "The customer wins because whatever questions they have or issue they’re wrestling with, they get an expert resolving them." Service reps visit former Comcast customers who’ve switched to DBS to demonstrate new services and pitch a return to cable. "When you put a face at the front door and offer a 15-minute presentation, instead of leaving a marketing brochure at their doorstep, you get a great opportunity for success," Lynch says. Whether they get a sale or not, the service reps don’t leave without customer feedback on their DBS likes and dislikes. This helps frame future product comparisons, as do visits to DirecTV counters at retail outlets to catch their salespeople at work. Later this month, some CSRs will be transferred to office space next door to the system headquarters. The additional space also will house a "Comcast Customer Experience" exhibit, which will display VOD, HD, high-speed and DVR services. The exhibit features a plasma HD set, stereo system and wireless capabilities. A home office demonstration area will be installed next to the Customer Experience exhibit. Cox declined to give details on how the upgraded customer service practices and expanded retail presence have affected sales. Under the MSO’s corporate edict, the system can’t release local subscriber counts for digital and other advanced services. Nevertheless, marketing director Shea offers some figures that show how these strategies have generated business: At the start of 2004, 30% of digital customers were using VOD regularly; 12 months later, more than 70% of digital customers are viewing on-demand content, and the buy rate is increasing by 5% each month. Local VOD, Local Edge Increased VOD usage has fueled interest in developing local free VOD content. First came the Maryland General Assembly coverage provided by Maryland Public TV, which began Jan. 19. Comcast is negotiating with "one or more" community colleges to present some of their courses on demand. Local theater, dance and music performances also may be added to its library of free-on-demand content. (Lynch says the system has a good relationship with local government officials; Baltimore County council reps who oversee cable franchises were not available to comment by press time.) "Local content has significant value to VOD," Lynch says. "It’s the kind of exclusive content DBS and other competitors can’t provide. Just as important, the organizations we’re talking to see great value with this, as a way to broaden their audiences." Interactive TV services are being developed more slowly than VOD in the Metro Counties area. Buzztime, the ITV trivia channel, is available to Howard and Harford County customers, and will expand to Baltimore County subs later this year. Unless Comcast introduces a national ITV rollout strategy, however, that’s as far as things will go in the near term. "The medium’s time will come, and we’re monitoring what Comcast is doing with Liberate and Microsoft," Lynch says. "Applications are going to motivate people and drive this market, and we’ve got to see what motivates people first." Whatever timetable Comcast corporate comes up with for the launch in the Baltimore suburbs of an all-digital/IP platform and of advanced services like VoIP and home networking, Lynch is certain that they’re coming. Competition will see to that, whether from DBS now, or from Verizon and other telecoms later. " The phone companies are really coming this time, and they can’t afford not to," he says. "They look at us about to launch digital voice, and they have no recourse but to expand their revenue base through video and high speed. Competition is a positive for us, because we have things a lot of people want. More competition will make us better." Comcast Baltimore Metro Counties By the Numbers Employees: 850 Miles of plant: 6,800 Homes passed: 545,000 Bandwidth: 750 MHz Percent upgraded: 100% Basic subs: 348,000 Basic penetration: 64% Basic cable rate: $51.95/mo. Digital/high-speed penetration: Comcast does not disclose market-specific penetration/customer numbers for competitive reasons. Digital tier rate: $62.80/mo. HSD rate: $42.95/mo. HDTV: 13 channels—local ABC, CBS, NBC, PBS stations, Discovery HD Theater, HBO, Showtime, Cinemax, Starz, INHD, INHD2, ESPN, Comcast SportsNet VOD: Launched 2002 DVR: Launched 2003 DVR rate: $9.95/mo. Ad insertion: 40 channels Source: Comcast

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