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Comcast Eyes Electrical Surge

Alan Breznick
1/23/2014
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Call it a cable power play. Not content to sell video, broadband, voice, mobile, home security, home automation, and business telecom services to the world, Comcast is exploring the idea of peddling electricity.

Greentech Media reported Wednesday that Comcast Corp. (Nasdaq: CMCSA, CMCSK) is gearing up to sell electrical power in its home state. Robert Powelson, chairman of the Pennsylvania Public Utility Commission, said the Philadelphia MSO is teaming up with a retail electric supplier to offer an electricity product in the fourth quarter.

Speaking to reporters, Powelson did not name the retail supplier. But a spokesman for NRG Energy of Princeton, NJ, later told Philly.com that his company is "working with Comcast on a new initiative."

A Comcast spokeswoman confirmed Thursday in an email, "As you may have read, we are exploring a relationship with a third-party supplier, NRG, to conduct a retail energy trial in Pennsylvania." She did not offer further details.

A successful trial could catapult Comcast into yet another service category. In the last couple of years, the MSO has branched out from its more traditional cable services of video, broadband, and voice by adding wireless, multiscreen video, home security, and home automation to its ever-growing roster of residential offerings. (See Betting on Smart Homes.)

For example, as Greentech Media reported, Comcast could bundle an electricity service with its Xfinity Home automation service. Among other things, Xfinity offers home controls for lighting and heating, making it a good complement for an electricity offering.

Such speculation may be premature, especially if Comcast short circuits the potential trial with NRG. However, with the US pay TV market pretty saturated and the broadband market nearing the saturation point, we shouldn't be surprised if the electricity business lights a fuse for Comcast and other MSOs.

— Alan Breznick, Cable/Video Practice Leader, Light Reading

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albreznick
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albreznick,
User Rank: Blogger
1/26/2014 | 1:31:49 PM
Re: Why not?
Good points, Mark. The technical capabilities are different. If this develops any further, it will be interesting to see exactly what role Comcast will play and what its business model will be.  
albreznick
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albreznick,
User Rank: Blogger
1/26/2014 | 1:29:03 PM
Re: Because cable service never fails ...
True. I did go a bit far there. Guess I'm thinking big, just like Comcast often does. But it is quite a stretch to say that they're looking to become a new Con Ed or PSEG right now. So I take it back.   
MarkC73
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MarkC73,
User Rank: Light Sabre
1/24/2014 | 3:01:43 PM
Re: Why not?
Yes but with phone there's technical synergy, the infrastructure and access, sure theres cap ex to to build the service, but there was leaverage too, plus it's scalable meaning they could to it across their foot print.  In any case, no big deal, guess we'll see when/how/if they roll, it's always in the details.
mendyk
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mendyk,
User Rank: Light Sabre
1/24/2014 | 12:32:55 PM
Re: Because cable service never fails ...
I'm not speaking from personal experience here -- just an observation about how cable operators show up in satisfaction surveys. But it's more than a stretch to say that what Comcast is rumored to be thinking about is becoming an electric utility. This is more like branding a white-label service and selling it as part of a bundle.
albreznick
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albreznick,
User Rank: Blogger
1/24/2014 | 12:32:47 PM
Re: Why not?
Very interesting. I don't know yet if Comcast is just dabbling or really serious about this idea. And it's hard to imagine them entering another regulatory minefield like this. But, as Dan points out below, Comcast has done this sort of thing before, particularly in the heavily regulated phone business. So who knows?  
albreznick
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albreznick,
User Rank: Blogger
1/24/2014 | 12:29:56 PM
Re: Because cable service never fails ...
Spoken like a tried-and-true Comcast subscriber. Guess you don't want them as your electric utility any time soon, eh?
GregW333
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GregW333,
User Rank: Lightning
1/24/2014 | 9:53:58 AM
Re: Why not?
In the longer term, I think this is more strategically aligned than NBC.  Worldwide network operators are, or have, shed media assets.  

One of the many interesting issues to watch is the regulatory area. FCC vs. DOE, State vs. Federal...yikes.  If Comcast is serious about this, they should run like hell and worry about the regulators in 5 years when they figure out what's going on.  They did this very successfully with broadband.  

I actually think this makes sense in the long term.  

Greg W. 
KBode
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KBode,
User Rank: Light Sabre
1/24/2014 | 9:41:50 AM
Re: Why not?
No I think you've got it...ie this is a cute one off exploration of a concept that won't likely move beyond this trial given the complicated state by state utility regulations Comcast won't want to have absolutely anything to do with. Imagine though...the biggest cable provider, largest TV provider, third largest phone company, and massive NBC empire also providing electricity? Amazing (maybe terrifying) but unlikely.
mendyk
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mendyk,
User Rank: Light Sabre
1/24/2014 | 9:35:08 AM
Because cable service never fails ...
Kind of a ballsy play by Comcast, given the fact that the cable industry's reputation for reliability and customer service remains a bit ... challenged. Then again, Comcast won't be involved in actually delivering electricity.
MarkC73
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50%
MarkC73,
User Rank: Light Sabre
1/23/2014 | 11:48:32 PM
Re: Why not?
Interesting, but where's the technical synergy, and I'm wondering about the margins and such.  A partnership is one thing, but for a game changing product, I'm thinking it has to be scalable as well as leveraging something that's already there.  Maybe I'm missing something.
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