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Comcast

Comcast

Comcast Corporation is the largest cable television company, the second largest Internet service provider and (according to the company) the fourth largest telephone service provider in the United States.

History

Comcast was founded in 1963 by Ralph J. Roberts, Daniel Aaron, and Julian A. Brodsky based on a recommendation from Warren "Pete" Musser, of Harrisburg, who brought the deal to Ralph Roberts to buy his first cable system in Tupelo, Mississippi. The company was incorporated in Pennsylvania in 1969, under the name Comcast Corporation from American Cable Systems, though a former insider says that "Comcast" is a derivation of the name "Communications and Broadcasting". Moving into the area of programming content, Comcast became majority owner of Comcast-Spectacor, Comcast SportsNet (in Chicago, Comcast Television (in Michigan), Philadelphia, Washington DC/Baltimore, MD, the San Francisco Bay Area, the Pacific Northwest and metro Sacramento), E! Entertainment Television, Style Network, G4, The Golf Channel and Versus (formerly known as Outdoor Life Network) over a period of years. In 2006, Comcast started a new sports channel in cooperation with Major League Baseball's New York Mets, SportsNet New York in the greater New York City region.

Comcast also has a variety network known as CN8, or the Comcast Network, available exclusively to Comcast and Cablevision subscribers. The channel shows news, sports, and entertainment and places emphasis in Philadelphia, New England, and the Baltimore/Washington, D.C. areas, though the channel is also available in New York, Pittsburgh, and Richmond. In August 2004, Comcast started a channel called CET (Comcast Entertainment Television). It is only available to Colorado Comcast subscribers. It focuses on Life in Colorado. It also carries some NHL & NBA Games when Altitude Sports & Entertainment is carrying the NBA or NHL. In January 2006, CET became the primary channel for Colorado's Emergency Alert System in the Denver Metro Area.

The UK division was sold to NTL in 1998. After the sale of their cellular division to SBC Communications of San Antonio and the acquisition of Greater Philadelphia Cablevision in 1999, Comcast and MediaOne announced a $60 billion merger which did not occur until three years later (as AT&T Broadband).

In 2002, Comcast paid the University of Maryland $25 million for naming rights to the new basketball arena built on the College Park campus, named Comcast Center.

On January 3, 2005, Comcast announced that it would become the anchor tenant in a new skyscraper in downtown Philadelphia, to be named the Comcast Center, not to be confused with the Maryland arena mentioned above. The skyscraper is officially the tallest building in Pennsylvania.

In December 2005, Comcast announced the creation of Comcast Interactive Media (CIM), a new division focused on online media.

Presently, Comcast serves a total of 24.6 million cable customers, 16.3 million digital cable customers, 14.4 million high-speed internet customers, and 5.6 million voice customers. The company employs over 100,000 people. Comcast is headquartered in Philadelphia, Pennsylvania, and also has corporate offices in Houston, Detroit, Denver,and Manchester, NH.

Comcast announced in May 2007 and launched in September 2008 a dashboard called SmartZone. Customers can use the service most likely sometime that year according to the Daily Herald near Chicago, quoting a Comcast spokesperson. HP or Hewlett-Packard led "design, creation and management". Collaboration and unified messaging technology came from open-source vendor Zimbra, according to IDG News Service, who spoke with a Comcast spokesperson the previous year. "SmartZone users will be able to send and receive e-mail, listen to their voicemail messages online and forward that information via e-mail to others, send instant messages and video instant messages and merge their contacts into one address book", according to IDG. IDG also noted Cloudmark spam and phishing protection and Trend Micro antivirus. The address book is Comcast Plaxo software.

Comcast announced for the end of 2008 a new network congestion management technique, after receiving no complaints over the summer in five market trials which were held in Warrenton, Virginia; Chambersburg, Pennsylvania; Colorado Springs, Colorado; Lake View, Florida; and East Orange, Florida.

Acquisitions

Comcast bought 25% of Group W Cable in 1986, doubling its size. Two years later, it purchased a 50% share in Storer Communications, Inc. Comcast acquired American Cellular Network Corporation the same year before combining with Metrophone in 1990. Comcast became the third largest cable operator in 1994 following its purchase of Maclean-Hunter's American division. Comcast owned the majority of the electronic retailer QVC from 1995-2004 when its share was sold to Liberty Media. Following other acquisitions, Microsoft invested $1 billion in Comcast in 1997.

In 2001, Comcast announced it would acquire the assets of the largest cable television operator at the time, AT&T Broadband (AT&T's spun-off cable TV service) for $44.5 billion USD. In 2002, Comcast acquired all assets of AT&T Broadband, thus making Comcast the largest cable television company in the United States with over 22 million subscribers. This also spurred the start of Comcast Advertising Sales (using AT&T's groundwork) which would later be renamed Comcast Spotlight. As part of this acquisition, Comcast also acquired the National Digital Television Center in Centennial, CO as a wholly-owned subsidiary, which is today known as the Comcast Media Center

When it was first announced that AT&T Broadband and Comcast were going to merge, the chosen name for the new company was "AT&T Comcast". That decision was changed so as to not confuse current and future investors in the company, and the merged company retained the Comcast name.

On February 11, 2004, Comcast surprised the media industry by announcing an unsolicited $66 billion bid for The Walt Disney Company, a deal that would have made Comcast the largest media conglomerate in the world. After rejection by Disney and uncertain response from investors, the bid was abandoned in April. It was later discovered that the deal was mostly for Comcast to acquire one of Disney's most profitable operations, ESPN, in an attempt to expand its sports reach. Comcast has since opted to expand OLN's sports coverage with the Tour de France and the NHL, and in the process renaming the network in the United States Versus. Comcast's NHL deal also obligated them to launch a U.S. version of NHL Network by the summer of 2007. The network finally launched in October 2007.

Comcast announced on March 25, 2004 that its new gaming-oriented television network G4 (operated by subsidiary G4 Media, Inc.) would acquire Vulcan Venture's technology-oriented television network TechTV. The deal was finalized on May 10, 2004 - and the two networks became G4techTV on May 28, 2004. On January 11, 2005, Comcast announced that it would drop TechTV from the station's name and again be known as "G4".

On April 8, 2005, a partnership led by Comcast and Sony Pictures Entertainment finalized a deal to acquire MGM and its affiliate studio, United Artists, and create an additional outlet to carry MGM/UA's material for cable and Internet distribution.

On October 31, 2005, Comcast officially announced that it had acquired Susquehanna Communications (SusCom,) a York, PA-based cable television and broadband services provider and unit of the former Susquehanna Pfaltzgraff company, for a net cash investment of approximately $540 million. In this deal Comcast acquired approximately 230,000 basic cable customers, 71,000 digital cable customers, and 86,000 high-speed Internet customers. Comcast previously owned approximately 30 percent of Susquehanna Communications.

On April 3, 2007, Comcast announced it had entered into an agreement to acquire the cable systems owned and operated by Patriot Media, a privately-held company owned by cable veteran Steven J. Simmons, Spectrum Equity Investors and Spire Capital, that serves approximately 81,000 video subscribers. Comcast will acquire Patriot for a net cash investment of approximately $483 million. By acquiring the niche provider the deal will plug a hole in its central New Jersey service.

Adelphia purchase

In April 2005 Comcast and Time Warner announced plans to buy Adelphia Cable. $17.6 billion was to be paid (partly in stock) in the deal that was finalized in the second quarter of 2006 — after the FCC completed a seven-month investigation without raising an objection. Time Warner would become the second largest cable provider in the U.S., ranking behind Comcast. As part of the same deal, Time Warner and Comcast would also trade existing subscribers to create larger clusters of customers for each company in various geographical areas.

The changes became effective on August 1, 2006. As an example, Comcast's systems in the Dallas-Fort Worth Metroplex were traded to TWC in exchange for Time Warner's North Louisiana market, which covers Shreveport and Monroe. Also, Comcast in Los Angeles Area was traded with TWC.

Also in August 2006, Comcast and Time Warner dissolved a partnership that controlled the systems in the Houston, Southwest Texas, San Antonio, and Kansas City markets. After the dissolution, Comcast obtained the Houston system, and Time Warner retained the others. On January 1, 2007, Comcast officially took control of the Houston system, but continued to operate under the Time Warner Cable brand in the interim. As of June 19, 2007, the Time Warner name was officially retired and replaced by Comcast.

Comcast also took over Adelphia systems in the State College, Pennsylvania area in addition to the Lewistown, Pennsylvania area.

In early 2007, Comcast took over Adelphia operations in Palm Beach, Broward and Miami-Dade Counties in Florida and Bartow, Pickens, Cherokee, and Forsyth Counties in Georgia.

thePlatform purchase

In July 2006, Comcast purchased the Seattle-based software company thePlatform. This represented an entry into a new line of business - selling software to allow companies to manage their Internet (and IP-based) media publishing efforts. Customers of thePlatform include Verizon Wireless, BBC Worldwide, PBS, CNBC, CBS College Sports, and HiT Entertainment . thePlatform will also provide media access for Hulu, the joint venture by NBC Universal and News Corporation providing on-demand, ad-supported television programming owned by NBC, Universal Studios, and Fox.

Plaxo Purchase

Comcast purchased Plaxo for a reported $150 million to $170 million price.

High-speed Internet service

Comcast offers downstream speeds of up to 4, 6, 8, or 17.6 Mbit/s and upstream speeds of 1 Mbit/s, or 2 Mbit/s for the 8 Mbit/s downstream package, for standard home connections. In some areas, they are offering 16 Mbit/s downstream and 1 or 2 Mbit/s (125 kB/s) upstream as a more expensive, yet speedier alternative. These differing speed options are made possible by loading a particular configuration file into the modem. Comcast's "PowerBoost" delivers bursts of 12 to 16 Mbit/s downstream and 1 to 2 Mbit/s upstream for the first 10 MB of the download with their 6 and 8 Mbit/s packages, respectively. Upload speeds are initially capped at their advertised speeds, but after several minutes of heavy upload activity, upload bandwidth is artificially capped to be no higher than the provisioned speed for the plan. In April 2008, Comcast offered a new tier of speed in two cities in Minnesota. The new tier is 50 Mbit/s down and 5 Mbit/s up and uses the new DOCSIS 3.0. This is the first of the 20 percent of Comcast territory to see DOCSIS 3.0. The cost of this new tier is $150.00 per month. Although unadvertised, Comcast does offer a reduced connection speed (768kb/384kb) at a lower price in many areas. According to the Comcast High Speed Internet terms of service, customers are provided with dynamic IP addresses.

Comcast has a policy of terminating broadband customers who use "excessive bandwidth," a term the company refused to define in its terms of service, which once said only that a customer's use should not "represent (in the sole judgment of Comcast) an overly large burden on the network." Company responses to press inquiries suggest a limit of several hundred gigabytes per month. In September 2007, Comcast spokesman Charlie Douglas said the company defines "excessive use" as the equivalent of 30,000 songs, 250,000 pictures or 13 million emails in a month. Other company statements have said the limit varied from month to month, depending on the capacity of specific cable nodes, and that it affected only the top 1/10th of the top 1 percent of high-speed internet customers.

On August 28th, 2008, Comcast confirmed the rumors of a controversial 250GB per month cap on downloads, set to go into effect on October 1st, 2008. As such, Comcast has changed their Network Management page to reflect the new policy. On September 4, 2008 Comcast sued the FCC over the findings.

Board Members

Five of its eleven board members serve on boards of other companies and institutions. Kenneth J. Bacon sits on the board of Stanford University. J.Michael Cook is also a director at Northrop Grumman and Dow Chemical. Michael Armstrong sits on the board of directors for Citigroup Bank. Dr. Judith Rodin serves the interests of the University of Pennsylvania, Electronic Data Systems, Aetna and The Brookings Institute.

Controversies

Sports

After the Montreal Expos baseball team relocated to Washington, D.C. to become the Washington Nationals in 2004, Comcast alienated many fans in the area by refusing to add the Mid-Atlantic Sports Network (MASN), which airs the team's games, to its channel lineup. In July 2006, as a condition of its approval of Comcast's takeover of a portion of Adelphia's assets, the FCC ordered Comcast to enter into binding arbitration with MASN to settle their dispute. As a result, on August 4, 2006, it was announced that Comcast would carry MASN programming starting in September 2006.

In the Philadelphia region, Comcast uses the FCC's "terrestrial loophole" to avoid negotiations with satellite television services for delivery of Comcast SportsNet Philadelphia, which is transmitted via a microwave broadcasting system instead of satellite (as its predecessor, PRISM, was a local-only service). This essentially denies competition in the Philadelphia market for games of the Philadelphia Phillies (baseball), Philadelphia 76ers (basketball), and Philadelphia Flyers (hockey). Comcast does, however, supply Comcast SportsNet Philadelphia programming to Verizon for their competing FiOS video service, even though FiOS is not available to residents of the city of Philadelphia.

A smaller controversy arose when Comcast and Cox Communications announced that their systems in Connecticut (outside of Comcast's systems in New Haven, Danbury, and the Northwest Corner — all areas considered to have a sizable number of Mets fans) would not be adding SNY in 2006, if ever, for varying reasons not fully explained. This came to the anger of Mets fans who would need to switch to satellite to watch games due to all of the state being in the Mets' designated territory (thus, games would not be available through MLB Extra Innings, and most ESPN telecasts would be blacked-out). Comcast's purchase of Adelphia's systems in the state and Cox's skeptical eye towards RSN carriage in regards to fan loyalties (also done with YES and NESN in the past) also could be factors. In March 2008, Comcast systems in Plainville and Hartford added SNY to the expanded basic lineup on Channel 98, but in July of 2008, SNY moved to Channel 26.

Comcast does not offer SportSouth as part of its programming package in the Middle Tennessee area which has effected thousands of Atlanta Braves and college sports fans. Braves fans in the Nashville area are basically left in the dark due to Comcast's refusal to add the popular sports channel. However, the channel is offered as part of its programming package in the Knoxville, Memphis and Chattanooga area.

Big Ten Network

In June 2008, Comcast struck a deal with the Big Ten Network. The channel was added beginning on August 15, 2008, and Big Ten Network's On Demand content was added on August 28, 2008. Comcast did not offer the channel for its first year of existence because of stalled negotiations: Big Ten Network wanted Comcast to place it on Expanded Basic and charge all customers a subscriber fee whether they wanted the channel or not, and Comcast wanted to place the channel on its Sports Entertainment Package, charging only customers who wanted it. The terms of the carriage deal are as follows:

  • Inside The Big Ten states, which are Michigan, Ohio, Indiana, Illinois, Minnesota, Wisconsin, Iowa, and Pennsylvania (except in Philadelphia), The Big Ten Network is available on the Expanded Basic level of service.
  • In Philadelphia, the network is available on Comcast's Digital Classic level of service, to which the vast majority of the company's Philadelphia customers already subscribe.
  • Beginning in Spring 2009 (after NCAA basketball's regular season), Comcast may move the channel to a digital level of service in certain systems only if the vast majority of its customers already subscribe to that level of service. The decision on whether to move the channel would be made by each system.
  • Comcast may not carry the network on its Sports Entertainment Package inside the Big Ten states at any time.
  • Outside The Big Ten states, Comcast may carry the network on any level of service, including its Sports Entertainment Package.
  • All Big Ten Network football games are available to Comcast to place on "overflow" channels. (see Big Ten Network overflow feeds). Decisions about how to offer those games are made by each system, but Comcast has indicated that they do plan on carrying "overflow" games throughout much of the Big Ten region. (see also Big Ten Network Game Finder)

Reputation for poor customer satisfaction

There have been many reported incidents with individual customers describing less than satisfying interactions with Comcast's customer services. These include situations with technicians falling asleep on the job, customers having to spend hours on the phone to fix simple problems, and sending a bill addressed to "Bitch Dog" to a customer who had recently complained about her service. On October 15, 2007, a 75-year old Comcast customer named Mona Shaw entered her local Comcast offices with a hammer and destroyed some office equipment before being arrested and fined for damages. Mrs. Shaw was angry and frustrated due to a previous encounter with Comcast customer service in which she and her husband wanted to speak with the manager and were forced to wait outside the offices for two hours before being informed that the manager had already gone home. Comcast's customer service quality has prompted several individuals to create blogs and websites dedicated to informing the public of Comcast's service, including one run by media columnist Bob Garfield.

In 2004 and 2007, the American Customer Satisfaction Index survey found that Comcast had the worst customer satisfaction rating of any company or government agency in the country, including the Internal Revenue Service. Comcast's Customer Service Rating by the ACSI surveys indicate that the company's customer service has not improved since the surveys began in 2001. Analysis of the surveys states that "Comcast is one of the lowest scoring companies in ACSI. As its customer satisfaction eroded by 7% over the past year, revenue increased by 12%." The ACSI analysis also addresses this contradiction, stating that "Such pricing power usually comes with some level of monopoly protection and most cable companies have little competition at the local level. This also means that a cable company can do well financially even though its customers are not particularly satisfied.

Within the Cable Television needs assessment report for the city of Fort Collins, CO February 10, 2004 which was required for Comcast's franchise renewal the city's independent consultant found: "Approximately 62% of the respondents, though, were very dissatisfied (along with another 25% who were dissatisfied) with the cost of cable television service." "A majority of the respondents were satisfied with the friendliness and courtesy of customer service personnel. Overall, approximately 43% of the respondents rated the cable company's performance as fair, 30% regarded it as poor and another 30% rated the cable company's performance as good."

Network Neutrality

Comcast has recently implemented measures using Sandvine hardware which sends forged TCP RST (reset) packets, disrupting multiple protocols used by peer-to-peer file sharing networks. This has prevented some Comcast users from uploading files. On August 17, 2007, TorrentFreak reported that Comcast has been preventing BitTorrent users from seeding files. In October 2007, the Associated Press confirmed the story that indicates that Comcast "actively interferes with attempts by some of its high-speed Internet subscribers to share files online, a move that runs counter to the tradition of treating all types of Net traffic equally. In November 2007, Comcast's severe limiting of torrent applications was again confirmed by a study conducted by the Electronic Frontier Foundation, in which public domain literature is distributed over peer-to-peer networks. Analysis of the EFF study finds "strong evidence that Comcast is using packet-forging to disrupt peer-to-peer (P2P) filesharing on their network". The studies show that Comcast effectively prevents distribution of files over peer-to-peer networks by sending a RST packet under the guise of the end user, and denying the connection, which effectively blocks the user from seeding over BitTorrent. Legal controversy arises because instead of simple filtering, Comcast is sending RST packets to Comcast customers, pretending to be the host user at the other end of the BitTorrent connection. Comcast's BitTorrent throttling was revealed to be through a partnership with Sandvine, although Comcast's internal memos instruct employees to respond to the contrary.

There is also evidence of Comcast using RST packets on groupware applications that have nothing to do with file sharing. Kevin Kanarski, who works as a Lotus Notes messaging engineer, noticed some strange behavior with Lotus Notes dropping emails when hooked up to a Comcast connection and has managed to verify that Comcast's reset packets are the culprit. A lawsuit, Hart v. Comcast, has been filed accusing Comcast of false advertising and other unfair trade practices for allegedly advertising unlimited high-speed internet access while in reality working to restrict their customers' usage of the internet.

In 2007, Comcast customers reported a sporadic inability to use Google because forged RST packets are interfering with HTTP access to google.com, which has further angered users.

In January 2008, FCC Chairman Kevin Martin stated that the FCC is going to investigate complaints that Comcast "actively interferes with Internet traffic as its subscribers try to share files online". During a February 2008 FCC hearing in Boston, Comcast admitted they paid people to hold seats. The company claimed it was so staffers could attend later, but opponents claimed it was to keep Comcast opponents from attending. The FCC has stated it expects to rule on the issue by June 30, 2008.

Comcast and BitTorrent agreed in late March 2008 to work together in a collaborative effort that will leave the network provider to reconfigure its network to manage traffic in a more protocol-agnostic way. Implementation was projected for late 2008.

Prior to implementation of Comcast's apparent agreements with BitTorrent, Inc., Comcast is reported to be continuing to limit bandwidth available to peer to peer applications. In April 2008, Comcast proposed a "P2P Bill of Rights and Responsibilities" to address potential copyright infringement by users of peer to peer applications, but some scholars argue that this is a veiled attempt by Comcast to strengthen its traffic management capability rather than fight copyright infringement.

Lobbying efforts

Comcast spends millions of dollars annually on government relationships. Regularly Comcast employs the spouses, sons and daughters of influential mayors, councilmen, commissioners, and other officials to assure its continued preferred market allocations.

Comcast strongly lobbies against "a la carte" bills that would give consumers the option to purchase individual channels rather than a broad tier of programming. These issues continue to garner attention from state governments, Congress and FCC Chairman Martin.

HDTV Claim and Quality

In many Comcast markets, new HD channels such as SciFi Channel, USA Network and Animal Planet were added in early 2008. Comcast has started transmitting 3 HD channels per QAM carrier, rather than 2 per QAM like other HD channels. Consequently, available bandwidth per HD channel has decreased, and it has been reported that the video quality of Comcast's new HD channels is inferior to that of competing video services.

References

External links

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