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Competition's Bounty

Alan Breznick
12/29/2006

Talk about great coincidences. Less than a week after AT&T Inc. (NYSE: T) launched its new U-verse IPTV service in sections of the San Francisco Bay Area and Silicon Valley, Comcast Corp. (Nasdaq: CMCSA, CMCSK) announced that it will spend $80 million to upgrade its cable systems in eight Bay Area communities.

Comcast plans to lay more than 2,200 miles of fiber to boost broadband capacity in Los Gatos, Milpitas, Saratoga, Santa Rosa, Hayward, San Leandro, Sunnyvale, and Half Moon Bay over the next 18 months. The new HFC networks will provide 1 GHz of bandwidth to the 250,000 homes that the MSO passes in those communities, significantly more than the 750 MHz or 860 MHz that cable operators typically provide in network upgrades these days.

"An investment of this magnitude is further evidence of Comcast's commitment to our Bay Area customers and community," said Comcast regional senior president Rick Germano in a prepared statement. The MSO boasted that it has now committed more than $663 million to technical upgrades since buying the Bay Area cable franchises from, of all companies, AT&T several years ago.

Of course, Comcast probably planned to plunk down this latest sum long before AT&T introduced its rival video service. Companies don't just pledge $80 million investments at the drop of a press release, at least not usually.

But the timing of Comcast's announcement, as well as its decision to upgrade the systems all the way to 1 GHz bandwidth, must be related to AT&T's competitive plans. So, even if his methods are questionable, maybe Federal Communications Commission (FCC) Chairman Kevin Martin is right about stoking greater telco TV competition with cable. The folks in the Bay Area certainly aren't complaining right now.

— Alan Breznick, Site Editor, Cable Digital News

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