Big, Bigger, Biggest… Bigger Still

Comcast has plenty of available bandwidth to indefinitely expand its High Speed Internet services at speeds up to 3Gbps and believes it has won the legal right to grow its cable business as large as it likes.

Comcast executives admitted Wednesday they have more than enough network capacity to meet the demands of customers, both now and well into the future.

“With regard to usage and capacity, we feel the network is flexible and has plenty of opportunity to grow in capacity,” said Neil Smit, president and CEO of Comcast Cable Communications. Smit was responding to a Wall Street analyst asking about future capacity during a quarterly financial results conference call.

Smit noted that some of the biggest bandwidth users served by Comcast are businesses, and the cable operator was well-positioned to service them by extending fiber or deploying its Metro Ethernet product. Residential customers get increased bandwidth through neighborhood node splitting or DOCSIS 3 channel bonding that combines several channels together to increase speed and capacity.

Brian Roberts, CEO of Comcast Corporation, agreed with Smit, adding, “the more the consumer desires speed, the better that is for our company.”

Roberts noted DOCSIS 3.1 — the next generation of cable broadband — was “promising technology.”

“At the cable convention, we demonstrated 3Gbps” over Comcast’s existing cable infrastructure, said Roberts.

Smit

Comcast is easily the country’s largest cable operator, but many believe it is restrained from growing larger through mergers and acquisitions because of antitrust concerns. But thanks to a number of lawsuits initiated by Comcast, the company believes it can now grow as large as it likes.

Roberts admits the question of cable industry consolidation remains a gray area, particularly for Comcast. But he told investors he does not believe there are any remaining legal hurdles preventing Comcast from buying out other cable operators, despite earlier FCC rulemakings limiting the maximum size a cable company can grow through buyouts.

Comcast yesterday announced its last buyout — NBCUniversal — helped fuel a 29% increase in net income in the second quarter, thanks in part to strong results from film and television.

But many of Comcast’s largest gains came from its cable business.

Despite continued losses of video subscribers (159,000 in the second quarter), Comcast’s cable revenue increased 5.8% to $10.47 billion, and operating cash flow grew 5.7% to $4.3 billion. Comcast, which also owns several NBC broadcast affiliates, is playing for both sides of the retransmission consent wars. Its owned and operated television stations have demanded higher fees to be carried on cable systems, many owned by Comcast itself. The increased programming costs fuel subscriber rate increases, which also boost revenue.

Broadband is way up, although the company keeps losing video customers to cord-cutting.

Comcast’s broadband revenue has continued to grow dramatically. Customer additions for High Speed Internet access were up more than 20% in the quarter — the best second-quarter growth in five years — even as subscribers paid more for the service because of rate increases. Customer growth and price hikes delivered 8% growth in broadband revenue. In the last quarter alone, Comcast earned $2.6 billion from its broadband business.

Comcast is not spending a significant percentage of that revenue on enhanced broadband network upgrades. Instead, the company has increased investments to wire office parks and businesses to entice commercial customers, which account for a substantial amount of new customer growth. Comcast is also investing in research and development of new products and services, such as set-top boxes. The company also expects to pay 10% more in programming costs than it did a year earlier.

Year-to-date cable communications capital expenditures have increased 7.1% to $2.3 billion representing 11.3% of cable revenue. Comcast expects that for the full-year of 2013, cable capital expenditures will increase by about 10% over 2012.

Some other highlights from the quarter:

• In the last six months, Comcast completed broadband speed increases for 70 percent of its customers;
• High Speed Internet revenue was again the largest contributor to Comcast’s cable revenue growth;
• At the end of the quarter, 33% of Comcast’s residential high-speed customers take a higher speed tier above its primary service;
• Comcast has pushed Wi-Fi hard, installing more than four million wireless gateways and boosted Wi-Fi coverage to 250,000 hotspots through both cable partnerships and its home hotspot initiative;
• Comcast’s new X1 cloud-based set-top platform has been introduced to more than half of its national service area and will be available everywhere by the end of 2013. By the end of the year, Comcast also expects to push a firmware update to installed boxes to upgrade them to its new X2 platform;
• The average Comcast subscriber now pays the company $160 per month, up 7.4% from last year. Rate hikes, speed upgrades and growing programming packages account for the higher price;
• 77% of Comcast video customers took at least two products and among those, 42% took phone, broadband and television service.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Bloomberg Comcasts Cable and Media Units Grow 7-31-13.flv[/flv]

Bloomberg reports Comcast is still having trouble holding on to its video-only customers, but broadband customer growth continues to explode. Comcast also does well because it owns a number of cable networks and entertainment properties. Expect Comcast to continue evolving its products to bring them closer to the things people do online.  (3 minutes)

xfinity=5GB

Comcast is introducing a new 5GB optional usage cap for customers subscribing to their Economy Plus ($29.95 – 3Mbps/768kbps) tier willing to limit their Internet usage in return for a $5 discount.

“The Flexible-Data Option is specifically designed for casual or light Internet users who typically use 5GB of data or less a month,” says a new Comcast FAQ on the subject. “It provides a $5 credit if your total monthly data usage is less than or equal to 5GB per month.”

Comcast admits only a tiny percentage of customers subscribe to the Economy Plus tier, and those are the only customers receiving letters offering a discount for keeping Internet usage low.

The company says it will inject a message into subscribers’ web browsers notifying them when they reach 90% of their usage allowance. If customers do happen to exceed 5GB of usage per month, there are repercussions. First, they automatically lose the $5 credit. Instead, they will be charged $1 per gigabyte in overlimit fees.

“We believe this monthly option is fair because it allows our eligible customers who use less data to now pay less,” writes the company.

But unlike Time Warner Cable’s trials of 5 and 30GB usage-capped plans that limit the overlimit fee to $25 a month, Comcast has no disclosed maximum, which means a customer consuming 200GB a month could face a $195 overage usage penalty.

Comcast notes the option is being offered later this month on a trial basis and only in the Fresno area. Customers can drop the usage capped option at any time.

Comcast discontinued its formal 250GB usage cap in May 2012, but it has not abandoned interest in usage limits or consumption-based pricing.

In Tucson, Comcast is testing variable usage caps with an overlimit fee of $10, which includes an extra 50GB of usage. In Nashville, all customers face a hard 300GB usage cap.

Time Warner Cable has repeatedly admitted very few customers have shown any interest in usage capped broadband plans.

Comcast is in hog heaven thanks to Pennsylvania’s generous handouts from its corporate welfare system.

This week, Philadelphia residents are pondering why the city is hounding entrepreneurs and middle class, at-home workers with new taxes and fees while the nation’s largest and richest cable company, Comcast, is receiving enormous tax breaks and government handouts.

Welcome to the United Corporations of America, where taxpayers front at least $80 billion in corporate welfare handouts, according to the New York Times. Comcast is the fourth biggest recipient of corporate welfare in Pennsylvania, dwarfed only by a giant oil company and two Hollywood studios that have learned how to cash in by filming movies inside the Keystone State. The average Pennsylvanian contributes $381 in taxes per year that gets diverted to multi-billion dollar corporations. At least 18 cents of every dollar in the state budget is now spent on corporate welfare programs.

The budget busting handouts have continued without interruption, even during The Great Recession. Elected officials believe the only way to keep big business from picking up and moving to another city or state is to keep making them offers they cannot afford to refuse. But local taxpayers can’t afford to make up the difference. While the economy was melting down from 2008-2010, Philadelphia-based Comcast scored $18 million in tax abatements, credits, and other government handouts. At the same time, local officials faced with upside down city budgets enacted controversial new taxes and business fees on some of the city’s smallest businesses, ranging from bloggers, freelance writers, to independent contractors and consultants.

Pennsylvania is easily among the top-tier of states handing out corporate welfare. In 2011, the Commonwealth collected $4.89 billion in business taxes. But it promptly returned $4.84 billion in tax credits to the state’s biggest businesses. Government benefits for Philadelphia for-profits totaled over $200 million that year alone. Many of the state’s biggest companies receive nearly as much in tax credits, grants, and other benefits that they pay in state and local taxes. Some incentive programs are so broadly written, businesses doing “business as usual” qualify for enormous tax breaks.

Take, for example, Comcast subsidiary QVC. Pennsylvania’s “film incentive program” handed the home shopping network $7.05 million in tax credits just for hawking jewelry from studios inside Pennsylvania. It did not matter QVC had been pitching products from those studios before, during and after the subsidy program handed out the award. Comcast had no plans to move the studios either, but it pocketed the corporate welfare just the same.

While Comcast was building up enough financial resources to acquire NBC-Universal, Philadelphia’s city budget was in tatters. Officials looking for creative ways to boost the local tax base didn’t tap Comcast for the money. Instead, they declared bloggers were now required to get a “business license” to operate within city limits. In fact, the city argued, every person, partnership, association and corporation engaged in a business, profession or other for-profit activity within the city of Philadelphia must now file a Business Privilege Tax Return. The cost just to apply for the business license? $300. Sorry Nathanial, the lemonade stand has to close because you didn’t cough up the $300 before erecting the card table in the front yard.

The “blogger tax” appeared to be sufficiently overreaching (thanks to excoriating coverage in the local media) to provoke the city to begin to phase it out, but no worries — Philadelphia has since found another source of revenue — Comcast? No, of course not. The real money is in taxing strippers. From The Philly Post:

So Mayor Nutter’s effort to tax lap dances—which reached its, er, climax last week in a Philadelphia courtroom — might be somewhat sympathetic if it had been cast as a way to crack down on the general level of skeeviness in the city. After all, it’s a fairly common rule of economics that if you want less of something, just tax it. That’s the logic behind Nutter’s anti-obesity effort to put a tax on sugary drinks, after all.

But nobody’s making that argument. (To be fair, City Hall hasn’t made much of a public argument of any sort, with officials saying they can’t comment on pending litigation.) So we’re forced to assume that the city, always desperate for revenue, is simply finding new ways of taxing its citizens — going after strippers the way you and I might check the folds of the couch for loose change.

And since strip club attendees already pay the city’s amusement tax just to enter the strip club, it seems reasonable to conclude that asking them to pay again when they witness actual stripping is thus a direct tax on stripping itself. It’s a tax on work.

There probably are not enough deep-pocketed lap dancers inside the City of Brotherly Love to cover Comcast’s tax tab. Just for building its new headquarters in Center City Philadelphia, the company was awarded an extra $42.75 million in government subsidies. But it did not stop there. In 2011, the cable company received an extra $18 million in miscellaneous gratitude corporate welfare categorized generally as “assorted grants and credits.” No other Philadelphia business came close to competing with Comcast’s taxpayer-provided gift basket. In return, Comcast showed its gratitude to Pennsylvania by declaring itself a Delaware-based corporation that was exempt from paying the state’s corporate income tax.

Comcast has filed a patent application that would let the company expand its Wi-Fi network by turning customers into human Wi-Fi hotspots and convincing them to offer Comcast Wi-Fi from rental cars, bicycles, and buses.

FierceCable found the patent application, called “Mobile WiFi Network” that would let the cable company build a dynamic mesh network of mobile hotspots that could be used by its customers. But instead of placing permanent Wi-Fi antennas on buildings or light posts, Comcast wants a patent to extend its network by using vehicles and people that can be positioned exactly where Comcast needs better wireless coverage.

In one example, Comcast’s proposed roving rental car fleet would use incentives to convince renters to activate the car’s built-in hotspot in return for free or discounted services.

“The offer may indicate that if the rental car is dropped off at one or more designated parking spots, the driver will receive a discounted car rental rate, free parking, a coupon for items sold at the designated parking spot, etc. In this manner, the driver may be incentivized to assist in managing the network of transceivers to improve the coverage area. A driver wishing to accept the offer may press a button on the car’s computing display, or other computing device (e.g., using a smart phone application) to respond to the offer with an acceptance,” Comcast states in the patent application.

If a driver says no, Comcast can up the ante with an even better offer in response. If that does not work, Comcast can expand its Wi-Fi network dynamically in other ways.

“It should be understood that the process could be implemented by placing transceivers in or on any other mobile unit, such as bicycles, Segways, buses, police cars, taxis, boats, persons, dedicated vehicles, etc. or any combination of such mobile units,” Comcast wrote.

Last month, Comcast announced it would activate a public Wi-Fi network over wireless routers supplied to customers on a secondary channel.

Triplett

Anthony Triplett used his job as a Comcast subcontractor to hunt for unsuspecting female victims while installing cable service — customers he would later return to rape and strangle.

On Friday, a Cook County judge sentenced the murderer to life in prison.

Judge Kevin Sheehan agreed with prosecutors who called Triplett both a sociopath and a psychopath, treating his victims with all the reverence of a used facial tissue.

Sheehan said Triplett’s defense was ludicrous, calling it a “wicked web of lies.”

“You were dancing like an ant on a sugar cube,” Sheehan said.

Triplett was found guilty of raping and strangling 23-year old Polish immigrant Urszula Sakowska,  whose lifeless body was found in a bathtub inside her Chicago-area home back in 2006.

Triplett is also facing charges in the death of 39-year old Janice Ordidge, a Comcast customer in Hyde Park.

Victims’ families say Comcast has a lot to answer for after subcontracting cable work out to Premier Cable Communications, a third-party company accused of maintaining shoddy hiring practices. Comcast is under scrutiny for doing nothing to stop Triplett after being informed he was being questioned by police in the death of Ordidge.

Both Comcast and Premier are being sued for allowing Triplett to continue working, which lead to his encounter with Sakowska.

Assistant State’s Attorney Brian Sexton said Triplett “obviously could not help himself” from committing the sexual assaults and killings.

“This is the most dangerous individual you will ever see in this courtroom — and that’s saying a lot for 26th Street,” Sexton told the judge, calling Triplett “every woman’s nightmare.”

“This is who you killed!” he shouted at Triplett while holding a photo of Sakowska.

Sakowska’s fiancé, Grzegorz Magiera, said he will never recover from her loss, which would have never happened had she not called Comcast.

“I can still see her in our house, smell her and feel her warm embrace,” Magiera said in a victim impact statement read by prosecutors. “My life will never be the same as it was before. No one will ever be able to replace my Urszula. She was my one and only. She was my angel.”

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/WLS Chicago Comcast Killer Sentenced to Life 7-19-13.mp4[/flv]

WLS reports Comcast-contracted cable repairman Anthony Triplett was found guilty of rape and murder and is yet to face murder charges in a second case. Triplett used his “house calls for Comcast” as a hunting ground for female victims. (2 minutes)