Steve Burke is CEO of NBCUniversal and an executive vice president at Comcast.

Comcast is in the enviable position of negotiating with itself for permission to carry Comcast-owned NBC stations over Comcast Cable, earning the company hundreds of millions in retransmission consent fees paid by cable subscribers.

Comcast executive vice president Steve Burke, who also oversees the Comcast-owned NBCUniversal, said retransmission fees are changing the broadcast business, and makes Comcast a ton of money along the way.

“NBC made virtually nothing on retransmission consent two years ago,” Burke told investors at the Bank of America Merrill Lynch 2013 Media, Communications & Entertainment Conference. “This year we’ll make about $200 million.”

Since acquiring NBCUniversal, cable subscribers cannot help but find themselves watching at least one channel owned by the entertainment and cable conglomerate. Burke said in addition to owning NBC local stations in the largest U.S. cities, Comcast also owns or controls an impressive number of popular cable channels including USA, Syfy, Bravo, E!, MSNBC, CNBC, The Weather Channel, and a variety of sports networks. Seven Comcast-owned cable networks earn the company more than $200 million annually, providing almost two-thirds of the programming division’s operating cash flow.

But Burke isn’t satisfied with those earnings, claiming cable companies undervalue the networks’ true worth by 20-25 percent.

“There is a monetization gap between how those channels are doing and how they should be doing measured by how peer cable channels are doing,” Burke explained. “In other words we are not paid as much as we think we should be given our ratings and our positioning by cable and satellite companies.”

Burke told investors the company is positioning to capitalize on the growth of retransmission consent fees that will deliver more revenue to the broadcast and cable programming divisions of Comcast that will be eventually reflected on subscribers’ bills.

“The key to retransmission consent is to have contracts expire with the big distributors that allow you to reopen the existing retransmission consent contracts,” Burke said. “One thing that we really hadn’t figured on when we did the deal was how rapidly retransmission consent was going to establish itself. We underestimated that frankly. That’s a very good thing for NBCUniversal, but not so good I think for Comcast Cable.”

Although Comcast has been very vocal about unreasonable price increases for broadcast and cable television programming owned by other companies, it expects comparable compensation for its own stations and networks.

“As our contracts come up, we will get those revenues the same way CBS, ABC and FOX have,” Burke argues. “I see no reason why we won’t […] get paid in a similar fashion to the way that they get paid in the future.”

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)

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)

Triplett

A jury has found Comcast contractor Anthony Triplett guilty of first degree murder, aggravated sexual assault and robbery in the death of Comcast Cable customer Urszula Sakowska, 23, killed by Triplett in December 2006 when Comcast sent him to her home to work on her Internet service.

It was not the first time police investigated Triplett, who was also under scrutiny for possible involvement in an earlier homicide of Comcast customer Janice Ordidge, who was found strangled in her bathtub after Triplett was sent to install her cable television service.

Assistant district attorney Brian Sexton said Triplett got his thrills watching his victims suffer and die.

“As he strangles them, he looks them right in the eye and sees the light go out,” Sexton said.

Comcast had come under fire in the case because the cable operator permitted the contractor, Premiere Cable Communications, to continue to send Triplett on service calls even while he was under investigation by local police.

“I don’t understand how he was allowed to keep doing cable jobs after he was questioned regarding my sister,” said Loretta Shamley, the sister of Janice Ordidge.

Neighbors say the incident made them more wary of cable repairmen, some not directly employed by the cable company.

“I don’t even feel safe enough to take out the garbage anymore,” said Latia Warren, who lives two floors above Ordidge. “If I’m alone I won’t let a serviceman into my apartment unless he works for the building and I know him.”

A second trial on the death of Ordidge has not yet been scheduled.

Triplett faces up to life imprisonment.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/WLS Chicago Cable Repairman Guilty 5-14-13.mp4[/flv]

WLS in Chicago reports a Comcast cable technician working for a third-party contracting firm was found guilty of murdering one customer and has alleged involvement in another homicide committed while doing service calls. (2 minutes)

Comcast says gun stores need no longer apply to purchase ad time on their cable systems.

The Lake County (Fla.) Commission is calling Comcast’s decision to no longer accept advertising from businesses that promote gun sales “discrimination,” and they are calling on the Florida legislature to pressure the cable operator to change its mind.

Local gun shops in central Florida are angry Comcast has stopped accepting their advertising and say the operator has an advertising monopoly that guarantees their ads will not be seen.

“I’ve advertised over 20 years with Comcast,” Carey Baker of Peterson’s Gun Shop told WFTV. “My business has no other choice. I can’t advertise on any other cable company.”

Both Time Warner Cable and Comcast have ceased running advertising from gun shops after the Sandy Hook Elementary School shootings in Connecticut. Comcast said they simply adopted a pre-existing policy already in place at NBC after buying the network.

Many broadcast stations and networks also maintain restrictions on gun or ammunition-related advertising, some banning those commercials outright, others approving them on a case-by-case basis.

Some commissioners said the cable operator’s decision was just as unacceptable as not allowing a gun shop owner to eat in a local restaurant. But another commissioner dissented, claiming Comcast has the right to run its business as it pleases.

The matter of cable advertising is completely unregulated, and attempts by state or local governments to enforce ad content policies would likely be challenged in the courts by affected cable operators.

But Baker says local municipalities do retain some leverage, as they can deny the renewal of a cable franchise to those no longer seen serving the best interests of the community.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/WFTV Orlando Lake Co gun shop owner upset Comcast no longer allowing gun ads 4-24-13.flv[/flv]

WFTV in Orlando talks with Carey Baker, owner of a local gun shop that can no longer advertise on Comcast Cable.  (2 minutes)