Cable Operators

All Wired Up In Wisconsin

10/24/2004 8:00 PM Eastern

Madison, Wis., is proud of the lifestyle enjoyed by its residents. Just look at all of the lists it has landed on, touts the Chamber of Commerce's Web site. The college town has been dubbed everything from the No. 1 town for business and careers by Forbes to one of the best 12 walking cities by Prevention.

For telecommunications providers, the city is close to a “walk in the park.” Madison has been declared the most wired city in the country, according to The Media Audit in a 2002 survey.

Madison, Wis.
Includes Madison and southern suburbs
Category Amount
Madison Population: 208,000
Madison Average HH income: $53,401
Madison Average age: 34.6
Charter regional homes passed: 408,000
Regional cable penetration: 53.4%
Regional HSD penetration: 43.8%
Regional VoIP penetration: N/A
Source: Charter Communications Inc., U.S. Census Bureau

Technology companies are drawn by the high percentage of college students (40,000 at the University of Wisconsin, Madison) and other Internet users. Despite the fact that outdoor recreation opportunities abound — including excursions to the nearby Wisconsin dells and tours of those famous bridges of Madison County — eventually, everyone must go indoors.

“You may have heard that it snows here,” quips Ben Baltes, director of sales and marketing for Charter Communications Inc.'s Madison-area system and all of southern Wisconsin. “That makes it a direct marketer's dream.”

And the community's local involvement doesn't hurt either, he adds. Residents embrace coverage of the National Football League's Green Bay Packers. And they're also highly involved in local issues to the point that city council meetings get a large viewership on local access, Charter executives say.

Madison's population is growing, in part because of the lifestyle. Students arrive to study at the university and eventually settle down in the area. Native sons and daughters try to find a way to return.

“I was born and raised here, so I'm very familiar with the market. I've worked from Arizona to Maryland, and I told a recruiter 'Don't call me until you have the marketing job in Madison.' It only took 15 years,” Baltes says.

Madison has been a good market for Charter. The MSO passes 408,000 homes in the region, a 53.4% penetration rate. About 44% of customers subscribe to high-speed data service, and the cluster is in the process of rolling out voice-over-Internet protocol service.

Digital cable is available in 100% of the market, as are digital-video recorders and high-definition television signals. (The company offers three local broadcasters and five cable exclusive HD channels.) Video-on-demand and free-on-demand programming is available in 70% of the market, but that will hit 100% soon, executives say.

In July, the cluster began launching VoIP in the suburbs, and it is anticipated all homes passed will have access by 2005. The company declined to state penetration numbers for telephony, citing the newness of the product.

In other markets, cable has often been publicly whipped for its service lapses. That could provide a hurdle to the sale of phone service.

“I've been in five, six, seven markets; this is the first one where there is no contentious view of the cable company,” says Don Stephan, vice president of operations. He attributes that to the MSO's focus on good service in the basic product, and an effort to build good community relations, as well as putting Charter's brand on every possible popular local event, such as the annual January Kites on Ice pageant.

Bad cable service “is an outdated stereotype here,” adds Chris Kennedy, director of technical operations.

“They're doing intelligent things as corporate citizens,” says Madison's cable TV coordinator Brad Clark. Of course, he added, Tele-Communications Inc. was the city's former operator, “so anyone looks better.”

But complaints are down, and Charter shows a commitment to accountability. He estimated that 98% of complaints made to the city are resolved in one call by Clark.

He's also enthused about the future launch of telephony in the city. “These are the things that satellite can't offer, and as an official sitting at the city, waiting for franchise fee checks, I say 'Right on!'”

Charter's most effective selling strategy on telephony has been one-on-one contact, sitting over the kitchen table comparing a consumer's a la carte prices with the Charter three-product bundle. The multi-product packages are priced up to $129.99, with the top price including all-digital and premium-video product, the highest-speed Internet connection and unlimited local and long distance calling.

The most popular package, so far, is priced at $119.99, with a single digital tier and limited premiums.

Charter is utilizing a slow VoIP rollout, using employee word of mouth to advertise the product's availability, then hitting the target area with door hangers and direct salesmen.

By the time they're ready to sell, executives say, they are surprised at the level of awareness in the marketplace. “With such a new product, we didn't know how it would go. Now Chris' hands are around my neck, saying 'Stop! Stop! Stop!' because [the roll-out] is so successful,” says Baltes.

Charter is focusing on residential service for now, leaving potential business like wiring the college and attacking large potential business clients like Land's End for later.

“It's a little premature in the product cycle to deploy to something as large as that,” says Stephan.

March