MediaOne Group Inc. said the recent addition of a
technology-based solution to its anti-cable-theft program is already producing
"significant" revenue and subscriber gains.
The MSO last week expanded its use of Frontline Solutions
Inc.'s automated anti-theft auditing software, "Monitor 3.8," to several new
systems, with plans to implement it nationally by the end of this year.
Already deployed in the operator's Boston and
Hialeah/Pompano Beach, Fla., systems, Monitor will be implemented next in MediaOne's Los
Angeles; Detroit; Jacksonville, Fla.; Minneapolis-St. Paul, Minn.; Richmond, Va.; and
Ossining, N.Y., markets.
MediaOne director of security and business-continuity
planning Brooks Russell said the MSO was using the system to add functionality to its
tap-audit program with the eventual goal of being able to audit every home passed in its
regions once every two years. This is part of an aggressive anti-theft and anti-piracy
Frontline's product is a personal-computer-based,
enterprise software package that helps to automate the tap-audit process, interfacing with
operators' billing systems and providing a regimented framework for collating audit
results and following up on them.
Auditors download information about their daily route into
handheld computers. In the field, they enter data comparing what they find with what's in
the company's database, even down to information about the condition of the physical
plant. The data collected during the audits are then uploaded back to the company's
MediaOne then combines audit results with follow-up
marketing, pursuing the twin goals of eliminating fraudulent connections and reaping
revenue from illegals who can be converted into customers.
Russell said such a program would be too labor-intensive
without automating such functions as entering and reporting audit data and creating
metrics from it, which Frontline's system provides.
He added that automation increases the number of homes a
single auditor can pass in one day and improves the tracking of results, such as which
illegals converted to customers, what they purchased and other data.
"We're already significantly revenue-positive, even
taking into account the cost of the program," Russell said, noting that MediaOne
began deploying Monitor about six months ago. "And we're generating significant new
Although MediaOne would not specify its results, Frontline
said a Monitor deployment for Time Warner Cable's Milwaukee system identified more than
350,000 unauthorized viewers, about 117,000 of whom later became paid subscribers.
Frontline CEO Ken Higgins said the Monitor system also
archives audit results, making it easier for operators to schedule repeat visits to those
who are disconnected for having illegal hookups - a method he said had proven to be highly
Higgins added that in several major markets where Monitor
had been deployed, auditors returning after 30 days to disconnected sites found that 50
percent of those people had reconnected illegally. But on third visits, that figure
dropped to 10 percent.
"If folks out there believe they're being watched,
they won't compromise our system - they'll be willing to pay," Higgins said.
The theft problem has persisted into the beginning of
cable's digital age, with the industry estimating that it loses about $6 billion annually
from the more than 11 percent of the nation's 94 million cable homes passed that are
Operators have long used field audits to cross-check cable
taps with their records of who is actually paying for hookups.
But to remain effective, the method has grown into a huge
administrative task, given the growth of subscriber bases and the desire by operators to
centralize their audit data, combined with decisions by some MSOs to become more
aggressive in ferreting out illegals.
"In some areas, people feel like conventional
marketing has kind of topped out, so what we're up against is marketing to that 15 percent
that may be illegally connected," Higgins said.
Because the cable industry's ongoing consolidation has
boosted subscriber values to north of $4,000 apiece, operators have a greater equity
incentive than ever to turn illegals into subscribers, he added.
The value of potential cash flow is also rising as
operators add more services such as telephony, security monitoring and high-speed data to
their video offerings, making each new subscriber a potential source of $150 to $200 per
Monitor is also used in systems owned by Adelphia
Communications Corp. and AT&T Broadband & Internet Services.