Fresh Breeze In Chicago

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Chicagoans have many nicknames for their town: the Windy City, the Second City, the City of Big Shoulders — even the I Will City.

In the regional Comcast Corp. offices, the moniker of choice might be the “We Have” city. That's because, executives say, Comcast has substantially upgraded 11,000 of the region's nearly 36,000 miles of cable plant. And that work comes less than 24 months after the date the Philadelphia-based MSO took over operations from AT&T Broadband.

<p>Chicago Division</p><p>As of December 2004</p>

Homes passed:

4.19 million

Video customers:

1.7 million

Plant miles:

36,000

Communities served:

360

Employees:

4,730

Products offered:

Digital cable, data, DVR, VOD, PPV

Coming in 2005:

VoIP

Comcast inherited systems in 360 Chicagoland communities, all in various states of technological readiness. The cluster encompasses seven Illinois counties, northwest Indiana and portions of southeast Michigan.

Some upgrades had been implemented by previous owners, including AT&T and MediaOne Group Inc. The best of the systems were at 750 Megahertz, but others were still at 550 MHz or less.

The upgrade's goal was a uniform, two-way platform at 860 MHz, and it involved a $350 million investment by Comcast.

“I like to say we did the most miles in less than two years in the history of cable,” says Joe Stackhouse, Comcast's senior vice president of the greater Chicago region.

It was a tough job, he notes, and it went as well as can be expected “given the fact you have to touch every customer.”

Management tried to keep consumer complaints to a minimum. Marketing and public affairs executives designed a proactive consumer-notification campaign touting the future benefits of the temporary disruptions. The system made strong use of its Web site, giving consumers a destination where they could learn about new products and leave contact information in anticipation of launch dates.

Executives used the construction time to build branding and learn the market. Eric Schaefer, vice president of sales and marketing, notes that because of Comcast's broad local reach, the company could use regional TV and radio to inform consumers that “Chicago is Comcast Country.”

While Comcast got its name out there, executives used all available research data to define what their customers wanted. In the land of “Da Bulls, Da Bears and Da Cubs,” the answer was pretty simple: sports as a key component of entertainment.

It was also one of the areas where cable appears to be at a disadvantage against direct-broadcast satellite provider DirecTV Inc. With its exclusive National Football League “Sunday Ticket” out-of-market pay-per-view package, consumer perception holds that DBS has the relationship with the NFL, Schaefer says.

But Comcast is fighting off that perception by touting a long-term deal with the Chicago Bears football team. The deal gives the cable operator broad rights to use the team's name and logo — and to develop exclusive local programming that can only be found on cable, via the regional sports networks the MSO carries.

Comcast also leveraged its ties to a local celebrity. Because Oprah Winfrey is based in Chicago — and is an investor in the women's network Oxygen — Comcast was able to negotiate a deal through Oxygen for Oprah to do promotional spots in which she coos, “Oh, Comcast.”

Oxygen also re-airs comedian Ellen DeGeneres' syndicated talk show, so her image was used in the cluster's multimedia campaigns.

The plant improvements are now 98% complete, executives say, save for a few small communities where headends serve 200 or fewer subscribers. Even before the improvements were completed, the big buzz was around accessibility to high-speed data.

“There was real pent-up demand,” Stackhouse says.

Now people are talking about video-on-demand and digital video recorders, he says. Comcast has been actively pursuing press coverage of each of its technological advances. For instance, with the launch of VOD, the company brought in SeaChange International Inc.'s demonstration vehicle and hosted demos of the product and its one-button remote.

The system improvements also put Comcast on a more even footing with its competitors. In addition to omnipresent DBS, the city of Chicago hosts two wired video overbuilders.

Comcast competes with RCN Corp. in a swath of the city stretching downtown from the upscale Miracle Mile through the housing projects of Cabrini Green. Wide Open West sells bundled services in southeast Chicago. That puts overbuilders in two of Comcast's five franchises.

Nonetheless, overbuilders were not a factor in the speed of the upgrade, Stackhouse says. Speed was a corporate imperative.

Now the imperative is selling in the new products. Chicago launched HDTV service during the 2003 National Show in Chicago. The system began with a five-channel package, but now offers 15 channels of broadcast and cable programming. Consumers can rent single- or dual-channel digital video recorders.

The next challenge: the launch of Voice-over-Internet-Protocol (VoIP) telephone service, scheduled for 2005. Stackhouse says the company is working on the final timeline of the phone kickoff.

At last in Chicago, “what we say is cool, people now actually believe is cool,” Schaefer says.

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