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Comcast Doctoring Digital in Detroit

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner
9/9/2008
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Detroit will be the second Comcast Corp. (Nasdaq: CMCSA, CMCSK) market to get the digital treatment.

Comcast Cable president Steve Burke revealed the Motor City as such today during his talk today at the Merrill Lynch & Co. Inc. Media and Entertainment Conference in Marina Del Ray, Calif.

A Comcast spokeswoman confirmed that the MSO has an all-digital trial underway in Battle Creek and Adrian, Mich., which are both in the Detroit region. The move to digital could pave the way for Detroit to get its hands on Docsis 3.0 later. (See Comcast Enters the Wideband Era .)

Burke didn’t provide much technical detail, but it's likely that Comcast will repeat what it did in Chicago last year -- by going mostly digital and reclaiming gobs of analog spectrum but leaving its "B1" programming tier (roughly 20 to 25 channels) in analog. (See Going 'Mostly' Digital .)

Comcast has plans in place to enlist a similar strategy in 20 percent of its markets, with the majority set to occur in the back half of the year. Comcast will fuel that plan using different forms of all-digital set-tops as well as simple, one-way digital terminal adapters (DTAs). (See Comcast Confirms Digital Dongle Project, Comcast's DTAs: Security Optional , Broadcom Adapts Chipset for DTAs, Comcast Gives Thomson Nod for DTAs , and Pace Pix .)

Industry sources have indicated that Comcast could begin to roll out DTAs as early as this month, but the spokeswoman said the MSO has yet to pull the trigger on any deployments.

Burke did address some of the longer-term plans Comcast has in store for the DTA. Of Comcast's 24 million video subs, about 15 million are already taking digital services. Another 4.5 million are taking Comcast's analog-only/expanded basic tier; Comcast expects to give them two or three set-top boxes each, with the majority of those devices being DTAs.

Comcast will also provide DTAs to digital subscribers, to ensure that their extra analog sets can display any channels from the expanded basic tier that might be migrated to digital.

Burke said it will take roughly 25 million DTAs for Comcast to complete its digital migration over the next 12 to 18 months, confirming that unit prices will be $30 to $35.

With spectrum freed up, "you can get as much HD as you want," Burke said, noting that Comcast will also use the room to beef up ethnic programming tiers that will compete with offerings from Dish Network LLC (Nasdaq: DISH) and DirecTV Group Inc. (NYSE: DTV).

Separately, Burke didn't speculate on Comcast's chances of reeling in new subscribers as the nation's full-power broadcasters cut over to digital on Feb. 17. (See DTV Transition Could Catalyze Cable.) What Comcast does know is that of the 50 million homes its network passes, 6 million to 8 million still rely on over-the-air broadcast signals.

Comcast is mulling some marketing options for this group: Send out the message that their TV viewing lives won't change if they sign up for cable; offer a super-cheap broadcast-only tier; or offer a baseline video service for free if those customers agree to sign up for high-speed Internet and digital phone service.

— Jeff Baumgartner, Site Editor, Cable Digital News

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