Comcast also offered a quick update on "Project Cavalry," a $1 billion analog reclamation project that will enable the MSO to reclaim about 40 channels to free up room for more high-definition television and video-on-demand (VoD) programming and Docsis 3.0. (See Comcast's $1B Bandwidth Plan , Comcast Seeds Digital Shift With Free Boxes, and Comcast 'Cavalry' Rides Into NoCal .) Comcast said the project is "active" in 11 markets today, including Seattle, San Francisco/Bay Area, Chattanooga, Philadelphia, and Atlanta. So far, the MSO has deployed about 2 million Digital Terminal Adapter (DTA) devices to support those rollouts. Comcast, which has completed the process in 10 percent of its plant so far, expects to have 33 percent of the transition done by year's end. Portland was the first large cable system to polish off the process. The MSO acknowledged that the transition has been "a drag" on cashflow growth (each DTA costs about $35), but it's also hopeful that it can get a decent return on the investment because the process frees up spectrum for about 100 hi-def channels, tiers of "ethnic programming," and other video products. The Project Cavalry and Docsis 3.0 deployments will "modestly increase" capex during the second half of the year, but the final tally for 2009 (in absolute dollars and as a percentage of revenues) will come in lower than 2008's capex total, said Comcast EVP and CFO Michael Angelakis. More Comcast tidbits
- Waxing wireless:Comcast expects to launch "High-Speed 2go" -- the brand name for the WiMax service it's reselling through its partnership with Clearwire LLC (Nasdaq: CLWR) -- in Chicago, Philadelphia, and Washington State by this fall, following up on earlier launches in Portland and Atlanta. (See More 'High-Speed 2go', Cable Plays Clearwire Card, Comcast's All Clear in Atlanta, and Comcast Maxes Out in Portland.) "We think the product is very sticky," Burke said, noting that 40 percent of the High Speed 2go customers in Portland are new to Comcast and are "lapsed DSL customers or customers who otherwise potentially would be getting DSL." Elsewhere in Comcast's expanding wireless world, Roberts said the MSO also intends this fall to add a remote DVR programming component to the Apple Inc. (Nasdaq: AAPL) iPhone/iPod Touch app it launched a few weeks ago. That free app's been downloaded over 200,000 times so far. The MSO is also working on some wireless apps for BlackBerries and other mobile devices. (See Comcast's TV-Free iPhone App .)
- Fall Web TV expansion: The MSO's 5,000-subscriber "Comcast On Demand Online" tech trial is underway, offering 4,000 titles from 20 programming partners. "We plan to expand this launch nationally this fall," Comcast Corp. COO and cable division president Steve Burke said. (See TW, Comcast Cast 'TV Everywhere' Principles and Time Warner, Comcast Team Up for TV Everywhere.)
- Profiting on EBIF? Burke said the Canoe Ventures LLC MSO partners expect to see "some revenues" roll in from interactive ad campaigns that use Enhanced TV Binary Interchange Format (EBIF). If current plans play out, he believes the MSOs backing Canoe should have EBIF enabled in 25 million homes by the fourth quarter. (See Canoe Preps ITV Ad 'Template' , Canoe Shelves Targeted Ad Product, and Canoe Rows Toward Enhanced TV .) But Comcast needs that piece of the business to ramp up yesterday, as the MSO's cable ad business was down almost 20 percent in the second quarter, following a 25 percent decline in the first quarter.
- Getting bizzy: The news is better in commercial services, where Comcast is targeting small and mid-sized businesses. Revenues in that segment jumped 51 percent (to $198 million) versus a year ago. Comcast is also expanding its cellular backhaul operations and now has deals under contract for more than 2,000 towers, according to Burke.