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Post Chapter 11, Charter Banks on Biz Services

Light Reading
LR Cable News Analysis
Light Reading
12/4/2009
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NEW YORK -- The Future of Cable Business Services -- Charter Communications Inc. is banking that a fresh focus on providing high-speed Internet and phone services to businesses will help the MSO climb back to profitability. (See Charter Leaves Chapter 11 .)

But the MSO could use some more resources to handle some of the requests it is receiving from business customers, including some seeking out help with cell backhaul.

"We do not have the staff and resources right now to handle all of the cell backhaul requests coming from all of the towers going up in our footprint," Fred Davies, Charter's director of IP architecture and product development, said here Thursday at the event's closing session. "So we're ramping up to accommodate that, which is a good thing."

Earlier this year, Charter began selling a 60-Mbit/s Docsis 3.0 high-speed Internet service to residential and business customers, charging $139.99 as a standalone data service, or $129.99 if it is bundled with a phone or pay-TV package. (See Charter Does More D3 .)

Davies said that Charter hasn't seen much demand yet for its Ultra60 service. He said he would expect more demand for the product if Charter lowered the price point, but he noted that dropping the rates it charges for the tier might congest the MSO's network.

"We haven't seen a huge demand. It isn't selling like hotcakes. If we would drop the price to $49.99, I'm sure it would sell. The ROI [return on investment] doesn't look good at $50 a month for that," Davies added.

Like the situation at other MSOs, the recession hurt Charter's business customers, but it also gave the MSO an opportunity to build its national infrastructure at a time when there wasn't a big demand for its services from many businesses, Davies said. [Ed note: Charter reported commercial revenues of $113 million in the third quarter, up 13 percent year-on-year, so it appears that the needle's still moving upward.] (See Cox Targets $2B in Biz Revenues.)

"With the downturn of the economy, it was a break for us to get back on our feet and build a solid platform. We're increasing our speed tiers for our residential customers as well. We're ramping up to be able to provide some good, solid services, which are at a good price point," he said.

Davies said Charter is focusing next year on providing voice services to mid-sized businesses that need 20 to 200 phone lines. He said the MSO wants to expand to offering high-speed data and phone services to large enterprises, but that it doesn't yet have the infrastructure to support companies in that category.

"We're getting the building blocks in place in order to do the large-enterprise-type services, but we're just not there yet," he said. "We don't have the back-office support. We don't have the people training in the field to support it, and then we have the billing issues on top of that," Davies said.

Asked by Heavy Reading senior analyst and panel moderator Alan Breznick about the potential for providing wireless broadband services to business customers, Davies said Charter would pursue the technology if the market asks for it.

"If there's a true demand for it and we can make money, yeah, we'll do it. Right now we're just emerging from bankruptcy. So we'll hit the ground running in 2010, but we're going to focus on what we know, what we do well. It [wireless] may become an opportunity," Davies said.

— Steve Donohue, Special to Cable Digital News

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