Comcast Corp. is consolidating its three commercial business telecommunications divisions into Comcast Business Communications, a new wholly owned company intended to target suburban businesses in its cable-franchise areas.
CBC will piggyback Comcast's cable network to deliver high-speed Internet, data networking, Web hosting and local and long-distance phone service to business clients.
"This was just a natural for us," Comcast president Brian Roberts said. "The core of the network is already there, and we have strong relationships within the community.
"Forming an organization to provide business solutions by leveraging that network in communities we already serve was the logical step," he said.
Robert Keane, a former Teleport Communications Group executive, will be president of the new division. Keane says CBC can succeed by utilizing Comcast's broadband network and "targeting the underserved market" of small and medium-sized business.
CBC brings together the functions of Comcast Network Services, Comcast Commercial Online and Comcast Telecommunications, three boutique businesses that offered local area network services, high-speed Internet access and phone services.
"They weren't full-fledged, stand-alone businesses," Keane said, as each had targeted a particular business niche.
Comcast last May began work on plans to integrate all three businesses and to fund the division, Keane said. Comcast spent $75 million to $100 million on the venture in last year's fourth quarter, according to treasurer John Alchin. By fourth-quarter 2001, that investment is expected to decrease to $25 million per quarter.
To serve businesses, CBC will add Internet protocol, asynchronous transfer mode (ATM), dense wavelength division multiplexing and passive optical networking technology to the company's core fiber/coaxial cable network, Keane said.
Keane said that combination gives Comcast a leg up over other competitive local-exchange providers, many of which have fallen on tough economic times.
For instance, Comcast will have 19 points of presence in Philadelphia, where the typical CLEC has only three, he said. Comcast will utilize DWDM technology between POPs to maximize bandwidth.
Comcast is deploying three different access technologies, Keane said, none of which relies on cooperation from the incumbent local-exchange carrier. These sometimes-troublesome colocation agreements between competitive DSL providers and incumbent RBOCs are one reason why the competitive service provider ranks are thinning.
For small businesses that require capacity between a T1 and a T3 line, CBC will use commercial grade cable-modems, Keane said.
CBC will use passive optical networking for midsized businesses, which require bandwidth speeds between three and 45 megabit. "PON allows us to utilize the available capacity in the cable plant non-intrusively," Keane said.
For businesses that need DS3 capacity and higher, CBC will install fiber directly to the business. In all cases, "there will be nondependency on the ILEC," Keane said.
Comcast will also buy a handful of circuit switches to handle traffic flow, said Keane. One switch, for instance, will serve the Baltimore/Washington, D.C., region, he said.
Keane said CBC is negotiating with several companies for Internet backbone access. "We'll buy access to the Internet from the best provider."
CBC is testing service in Baltimore, and expects to rollout in Philadelphia, Detroit, New Jersey and Virginia. In all, CBC plans to launch in eight markets, Keane said.
While Cox Communications Inc. and Time Warner Telecom have expanded their business service footprints, Adelphia Business Solutions is cutting back on the markets it intends to serve in 2001.
Keane said CBC has realistic penetration goals. "Our plan is measured in the number of markets and market share," he said. "We'll have to differentiate on quality of service," but Keane sees plenty of opportunity to gain market share and plow greenfield territory.
The collapse of many CLECs may help CBC, even though Comcast is late to the market compared to Cox or Time Warner.
"We may be a little bit behind, but we're not late," Keane emphasized. "We represent to the marketplace stability."