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Comcast

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Comcast Corporation
TypePublic
NASDAQCMCSA
NASDAQCMCSK
FoundedTupelo, Mississippi U.S. (1963)
Founder(s)Ralph J. Roberts
Daniel Aaron
Julian A. Brodsky
Jacob S. LaFleur
HeadquartersOne Comcast Center
Philadelphia, Pennsylvania, USA
Area servedUnited States
Key peopleBrian L. Roberts
Chairman of the Board President CEO
IndustryTelecommunications
ProductsCable Television, Broadband Internet, Comcast Digital Voice, Home Networking
Revenue $ 34.256 billion - 2008
Operating income $ 6.732 billion - 2008
Net income $ 2.547 billion - 2008
Total assets $ 113.017 billion - 2008
Total equity $ 40.450 billion - 2008
Employees100,000 - September 2009
Websitehttp://www.comcast.com
One Comcast Center, the headquarters of Comcast

Comcast Corporation (NASDAQCMCSA and NASDAQCMCSK), founded in 1963, is the largest cable operator in the United States, providing cable television, broadband Internet, and telephone service to both residential and commercial customers.[1][2][3][4] Comcast is headquartered in One Comcast Center in Center City, Philadelphia, Pennsylvania.[5]

Contents

History

Comcast was originally formed as American Cable Systems in 1963[6] and was founded by Ralph J. Roberts, Daniel Aaron, and Julian A. Brodsky based on a recommendation from Pete Musser, who brought the deal to Ralph Roberts to buy his first cable system in Tupelo, Mississippi. The company was incorporated in Pennsylvania in 1969, under the new name Comcast Corporation.[7] The name "Comcast" is portmanteau of the words "Communication" and "Broadcast".[8]

Over a number of years, Comcast became majority owner of Comcast Spectacor, Comcast SportsNet (in Chicago, Michigan, Philadelphia, Washington DC/Baltimore, MD, the San Francisco Bay Area, the Pacific Northwest and metro Sacramento), as well as E! Entertainment Television, Style Network, G4, The Golf Channel and Versus (formerly the Outdoor Life Network). In 2006, Comcast started a new sports channel – SportsNet New York – in the greater New York City region, in partnership with the New York Mets and Time Warner Cable.

Comcast also has a variety network known as Comcast Network, available exclusively to Comcast and Cablevision subscribers. The channel shows news, sports, and entertainment and places emphasis in Philadelphia and the Baltimore/Washington, D.C. areas, though the channel is also available in New York, Pittsburgh, and Richmond. In August 2004, Comcast started a channel called CET (Comcast Entertainment Television), available only to Colorado Comcast subscribers, and focusing on Life in Colorado. It also carries some NHL & NBA Games when Altitude Sports & Entertainment is carrying the NBA or NHL. In January 2006, CET became the primary channel for Colorado's Emergency Alert System in the Denver Metro Area.

The UK division was sold to NTL in 1998. After the sale of their cellular division to SBC Communications of San Antonio and the acquisition of Greater Philadelphia Cablevision in 1999, Comcast and MediaOne announced a $60 billion merger which did not occur until three years later (as AT&T Broadband).

In 2002, Comcast paid the University of Maryland $25 million for naming rights to the new basketball arena built on the College Park campus, named Comcast Center.

On January 3, 2005, Comcast announced that it would become the anchor tenant in a new skyscraper in downtown Philadelphia, to be named the Comcast Center, not to be confused with the Maryland arena mentioned above. The 975 ft (297 m) skyscraper is officially the tallest building in Pennsylvania.

In December 2005, Comcast announced the creation of Comcast Interactive Media (CIM), a new division focused on online media.

Presently, Comcast serves a total of 24.6 million cable customers, 16.3 million digital cable customers, 14.4 million high-speed Internet customers, and 5.6 million voice customers. The company employs over 100,000 people. Comcast is headquartered in Philadelphia, Pennsylvania, and also has corporate offices in Atlanta, Detroit, Denver,and Manchester, NH.[9]

Comcast announced in May 2007[10] and launched in September 2008 a dashboard called SmartZone.[11] Customers can use the service most likely sometime that year according to the Daily Herald near Chicago, quoting a Comcast spokesperson.[11] HP or Hewlett-Packard led "design, creation and management". Collaboration and unified messaging technology came from open-source vendor Zimbra, according to IDG News Service, who spoke with a Comcast spokesperson the previous year.[10] "SmartZone users will be able to send and receive e-mail, listen to their voicemail messages online and forward that information via e-mail to others, send instant messages and video instant messages and merge their contacts into one address book", according to IDG.[10] IDG also noted Cloudmark spam and phishing protection and Trend Micro antivirus.[10] The address book is Comcast Plaxo software.[10]

Comcast announced for the end of 2008 a new network congestion management technique, after receiving no complaints over the summer in five market trials which were held in Warrenton, Virginia; Chambersburg, Pennsylvania; Colorado Springs, Colorado; Lake View, Florida; and East Orange, Florida.[12]

As of October 30, 2008 (2008 -10-30) Comcast signed a product development and distribution agreement with ABC Radio that will bring branded content from E! Entertainment, Style Network and G4 to terrestrial radio affiliates.[13]

As of December 3, 2009 (2009 -12-03) Comcast announced an acquisition of 51% share in NBC Universal to create one of the largest media conglomerates in the world.[14]

On December 1, 2009, CNBC reported that a tentative agreement had been reached between Comcast and GE.[15] The deal was formally announced on December 3, 2009.[16] Under the agreement, NBC Universal would be 51% owned by Comcast and 49% by GE. Comcast is to pay $6.5 billion cash to GE. Comcast will also contribute $7.5 billion in programming including regional sports networks and cable channels such as Golf Channel and E! Entertainment Television. GE plans to use some of the funds, $5.8 billion, to buy out Vivendi's 20% minority stake in NBC Universal.[16] After the transaction completes, Comcast will reserve the right to buy out GE's share at certain times. GE will also reserve the right to force the sale of their stake within the first seven years. The deal is subject to regulatory approval.[16]

Assets

Cable television

Comcast has 25 million television subscribers in 39 of the fifty U.S. states.[17]

Internet

Comcast has 15 million Internet service customers.[18]

Comcast offers downstream speeds of up to 1, 6, 8, 12, 15, 20, 30 or 50 Mbit/s and upstream speeds of .384, 1, 2, 5, 7 or 10 Mbit/s for standard home connections. These differing speed options are made possible by loading a particular configuration file into the modem or banding channels together through DOCSIS 3.0. Comcast's "PowerBoost" delivers bursts for all but their highest-end and lowest-end tiers, allowing subscribers to use all excess cable node capacity to speed up the first few seconds of downloads. According to the Comcast High Speed Internet terms of service, customers are provided with dynamic IP addresses.[19]

On December 23, 2009, Comcast will increase their base speeds from 6 and 8 Mbps to 12 and 16 Mbps, respectively, in certain areas of Utah.[20]

Comcast has a policy of terminating broadband customers who use "excessive bandwidth," a term the company refused to define in its terms of service, which once said only that a customer's use should not "represent (in the sole judgment of Comcast) an overly large burden on the network."[19] Company responses to press inquiries suggest a limit of several hundred gigabytes per month.[21][22] In September 2007, Comcast spokesman Charlie Douglas said the company defines "excessive use" as the equivalent of 30,000 songs, 250,000 pictures or 13 million emails in a month.[23] Other company statements have said the limit varied from month to month, depending on the capacity of specific cable nodes, and that it affected only the top 1/10th of the top 1 percent of high-speed Internet customers.

On August 28, 2008, Comcast confirmed the rumors of a controversial 250 GB per month cap on downloads, set to go into effect on October 1, 2008.[24] As such, Comcast has changed their Network Management page to reflect the new policy.On September 4, 2008 Comcast sued the FCC over findings that the previous Network Management policy illegally interfered with BitTorrent traffic on the Comcast network.[25]

The cap combines both upload and download for the total limit. If a user exceeds the cap, on a first offense, a warning email and/or phone call will be issued with information on how to track bandwidth usage by suggesting software monitoring programs. On the second offense, the user will have their services terminated for one year. The monitoring window is from the first day of the month to the last day of the month.[26]

Telephone

Comcast tallies 6.4 million household telephone service accounts,[27] making it the United States' third-largest telephone provider.[28]

Business Class services

In addition to residential consumers, Comcast also serves businesses as customers, specifically targeting the segment of businesses with fewer than 20 employees.[29] In 2009, Minneapolis – Saint Paul became the first city that Comcast Business Class offered 100 Mbps Internet service, which includes Microsoft Communication Services.[30]

Programming

Comcast not only delivers third-party programming content to its own customers, but also produces content that is delivered to both its subscribers and customers of other competing television services. This is a way to diversify Comcast's revenue to both sides of the content/delivery equation. Fully- or partially-owned Comcast programming includes CN8, Comcast SportsNet, SportsNet New York, MLB Network Comcast Sports Southeast/Charter Sports Southeast, E! Entertainment, Style Network, G4, Versus, The Golf Channel, AZN Television, and FEARnet.

Acquisitions and joint ventures

Comcast bought 25% of Group W Cable in 1986, doubling its size. Two years later, it purchased a 50% share in Storer Communications, Inc. Comcast acquired American Cellular Network Corporation the same year before combining with Metrophone in 1990. Comcast became the third largest cable operator in 1994 following its purchase of Maclean-Hunter's American division. Comcast owned the majority of the electronic retailer QVC from 1995-2004 when its share was sold to Liberty Media. Following other acquisitions, Microsoft invested $1 billion in Comcast in 1997.[31]

In 2001, Comcast announced it would acquire the assets of the largest cable television operator at the time, AT&T Broadband (AT&T's spun-off cable TV service) for $44.5 billion USD. In 2002, Comcast acquired all assets of AT&T Broadband, thus making Comcast the largest cable television company in the United States with over 22 million subscribers. This also spurred the start of Comcast Advertising Sales (using AT&T's groundwork) which would later be renamed Comcast Spotlight. As part of this acquisition, Comcast also acquired the National Digital Television Center in Centennial, Colorado as a wholly-owned subsidiary, which is today known as the Comcast Media Center.

Proposed merger name logo, 2001

When it was first announced that AT&T Broadband and Comcast were going to merge, the chosen name for the new company was "AT&T Comcast". That decision was changed so as to not confuse current and future investors in the company, and the merged company retained the Comcast name.

On February 11, 2004, Comcast surprised the media industry by announcing an unsolicited $66 billion bid for The Walt Disney Company, a deal that would have made Comcast the largest media conglomerate in the world.[32] After rejection by Disney and uncertain response from investors, the bid was abandoned in April. The deal would have also required Comcast to sell off either the Philadelphia Flyers (which they own through Comcast Spectacor) or the Disney-owned Mighty Ducks of Anaheim, since they wouldn't be permitted to own two NHL teams. It was later discovered that the deal was mostly for Comcast to acquire one of Disney's most profitable operations, ESPN, in an attempt to expand its sports reach. Comcast has since opted to rename OLN as Versus and expand their sports coverage with the Tour de France and the NHL. Comcast's NHL deal also obligated them to launch a U.S. version of NHL Network by the summer of 2007. The network finally launched in October 2007. Disney later sold the now-Anaheim Ducks to Henry Samueli in 2005 in an unrelated transaction.

Comcast announced on March 25, 2004 that its new gaming-oriented television network G4 (operated by subsidiary G4 Media, Inc.) would acquire Vulcan Venture's technology-oriented television network TechTV. The deal was finalized on May 10, 2004 - and the two networks became G4techTV on May 28, 2004. On January 11, 2005, Comcast announced that it would drop TechTV from the station's name and again be known as "G4".

On April 8, 2005, a partnership led by Comcast and Sony Pictures Entertainment finalized a deal to acquire MGM and its affiliate studio, United Artists, and create an additional outlet to carry MGM/UA's material for cable and Internet distribution.

On October 31, 2005, Comcast officially announced that it had acquired Susquehanna Communications (SusCom,) a York, PA-based cable television and broadband services provider and unit of the former Susquehanna Pfaltzgraff company, for a net cash investment of approximately $540 million. In this deal Comcast acquired approximately 230,000 basic cable customers, 71,000 digital cable customers, and 86,000 high-speed Internet customers. Comcast previously owned approximately 30 percent of Susquehanna Communications.

On April 3, 2007, Comcast announced it had entered into an agreement to acquire the cable systems owned and operated by Patriot Media, a privately-held company owned by cable veteran Steven J. Simmons, Spectrum Equity Investors and Spire Capital, that serves approximately 81,000 video subscribers. Comcast will acquire Patriot for a net cash investment of approximately $483 million.[33] By acquiring the niche provider the deal will plug a hole in its central New Jersey service.[34]

Adelphia purchase

In April 2005, Comcast and Time Warner Cable announced plans to buy Adelphia Cable. $17.6 billion was to be paid (partly in stock) in the deal that was finalized in the second quarter of 2006 — after the FCC completed a seven-month investigation without raising an objection. Time Warner would become the second largest cable provider in the U.S., ranking behind Comcast. As part of the same deal, Time Warner and Comcast would also trade existing subscribers to create larger clusters of customers for each company in various geographical areas.[citation needed]

The changes became effective on August 1, 2006. As an example, Comcast's systems in the Dallas-Fort Worth Metroplex were traded to TWC in exchange for Time Warner's North Louisiana market, which covers Shreveport and Monroe. Also, Comcast in Los Angeles Area was traded with TWC. Parts of the Orange County area (Fullerton, Buena Park, etc.) that were Adelphia were originally Comcast subscribers until the early 2000s.[citation needed]

Also in August 2006, Comcast and Time Warner dissolved a partnership that controlled the systems in the Houston, Southwest Texas, San Antonio, and Kansas City markets. After the dissolution, Comcast obtained the Houston system, and Time Warner retained the others.[35] On January 1, 2007, Comcast officially took control of the Houston system, but continued to operate under the Time Warner Cable brand in the interim. As of June 19, 2007, the Time Warner name was officially retired and replaced by Comcast.

Comcast also took over Adelphia systems in the State College, Pennsylvania area in addition to the Lewistown, Pennsylvania area. The company also took over Adelphia's systems in the Pittsburgh market, combining those systems with Comcast's already-large market share in the region (Comcast entered Pittsburgh through the AT&T Broadband deal). Aside from the satellite companies and small areas with Armstrong Cable (and more recently Verizon FiOS), Comcast effectively has a monopoly in the Pittsburgh region.

In early 2007, Comcast took over Adelphia operations in Palm Beach, Broward, Hillsborough, and Miami-Dade Counties in Florida and Bartow, Pickens, Cherokee, and Forsyth Counties in Georgia.[36]

thePlatform purchase

In July 2006, Comcast purchased the Seattle-based software company thePlatform. This represented an entry into a new line of business - selling software to allow companies to manage their Internet (and IP-based) media publishing efforts. Customers of thePlatform include Verizon Wireless, BBC Worldwide, PBS, CNBC, CBS College Sports, and HiT Entertainment .[37] thePlatform also provides media access for Hulu and Fancast.com.

Plaxo purchase

Comcast purchased Plaxo for a reported $150 million to $170 million price.[38]

ESPNU and ESPN360.com

On May 19, 2009, Disney and ESPN Media Networks and Comcast Corporation announced an agreement to add ESPNU to its Digital Classic level of service[39]. Comcast added ESPNU to a majority of its cable systems in time for the start of the 2009 college football season. This includes Comcast's southern systems which enjoys coverage of ESPNU's new Saturday game-of-the-week Southeastern Conference (SEC) package. With this agreement, ESPNU has more than 46 million subscribers.

In the same agreement, it was announced that ESPN360.com—the sports company's U.S. live sports broadband network—would be made available to all Comcast high speed Internet subscribers. ESPN360.com provides live streaming of more than 3,500 sports events from around the world annually. Programming includes major soccer leagues, US college football, basketball, baseball and softball, NBA, MLB, coverage of major golf and tennis tournaments (such as tennis "grand slam" events, the US Open and British Open). With the agreement ESPN360.com became available to nearly 41 million homes, a majority of broadband homes in America.[39]

TechTV acquisition

On March 25, 2004, Comcast's G4 gaming channel announced a merger with TechTV. This move became hugely controversial among loyal fans of TechTV and its well known personality Leo Laporte. Around May 6, G4 announced the termination of 250 employees from the San Francisco office by July 10, 2004, allowing approximately 80 to 100 employees to transition to G4's main office in Los Angeles, California if they agreed to relocate there.

On May 10, 2004, G4 Media completed the acquisition of TechTV from Vulcan. G4techTV was launched in the U.S. and Canada on May 28, 2004. This led to the cancellation of many of the TechTV channels throughout carriers across the world. On January 3, 2005, TechTV International began airing select programs from G4techTV.

On February 15, 2005, the TechTV brand was dropped from the United States G4techTV feed, leaving the network name as G4 - Video Game Television; since then, G4 has gone through a rebranding into a male oriented network. Comcast also acquired 33.33% of G4 Canada in addition to its US channel in the sale of TechTV.

U.S. Olympic Network

The U.S. Olympic Committee and Comcast intended to team up to create The U.S. Olympic Network, which was slated to launch after the 2010 Vancouver Olympic Games.[40] These plans have since been put on hold by the U.S. Olympic Committee.[41]

NBC Universal

Media outlets began reporting in late September 2009 that Comcast was in talks to buy NBC Universal. Comcast denied the rumors at the first, while NBC would not comment on them.[42] However, CNBC itself reported on October 1 that General Electric was considering spinning NBC Universal off into a separate company that would merge the NBC television network and its cable properties such as USA Network, Syfy and MSNBC with Comcast's content assets. GE would maintain 49% control of the new company, while Comcast owned 51%.[43][44] Vivendi, which owns 20%, would have to sell its stake to GE. It's been reported under the current deal with GE that it would happen in November or December.[45][46] It was also reported that Time Warner would be interested in placing a bid, until Jeffrey L. Bewkes the CEO came out and said "No",[47] leaving it highly likely that Comcast wouldn't have any other bids to worry about.

On November 1, 2009, The New York Times reported Comcast had moved closer to a deal to purchase NBC Universal and that a formal announcement could be made sometime the following week.[48] On December 3, 2009, the parties announced that Comcast will take a controlling 51% stake in NBC Universal.[49]

Financial performance

Over the past ten years (to 2009), Comcast has achieved a financial record that is, according to one analyst, "not unimpressive". The book value of the company nearly doubled from $8.19 a share in 1999 to $15 a share in 2009. Revenues grew six-fold from 1999's $6 billion to almost $36 billion in 2009. Net profit margin rose from 4.2% in 1999 to 8.4% in 2009, with operating margins improving 31 percent and return on equity doubling to 6.7 percent in the same time span. Between 1999 and 2009, return on capital nearly tripled to 7 percent.[50]

Employee relations

Comcast is consistently rated highly in "top places to work" lists. In 2009, it was listed in CableFAX magazine's "Top 10 Places to Work in Cable", which cited its "scale, savvy and vision".[51] Similarly, the Philadelphia Business Journal awarded Comcast the silver medal among extra-large companies in Philadelphia, with the gold medal going to partner organization, Comcast-Spectacor.[52][53] The Boston Globe found Comcast to be that city's top place to work in 2009.[54]

Employee diversity is also an attribute upon which Comcast receives strong marks. In 2008, Black Enterprise magazine rated Comcast among the top 15 companies for workforce diversity.[55]

Controversies

NFL Network

On November 10, 2006 Comcast announced it would add NFL Network on digital tiers in time for the eight-game Thursday- and Saturday-night package.[56] On August 6, 2007 Comcast moved NFL Network from the digital tiers to the Sports Entertainment Package. This led to a court battle between NFL Network and Comcast, with the ruling in favor of Comcast but the NFL Network plans to appeal the ruling[57]. Comcast has sent NFL Network a cease-and-desist letter to stop encouraging subscribers to leave Comcast.[58] Comcast's agreement with the NFL Network ends in mid-2009.[59] In February 26, 2008 an appellate court in New York has reversed field on a judgment made in May 2007 that allowed Comcast to move the network from its second most distributed tier to the company's sports tier. At the time a court date has not been set. Four judges at New York’s Supreme Court, Appellate Division, First Department, ruled the language "concerning additional programming package was ambiguous and that neither party has established that its interpretation of the relevant contracts is a matter of law."[60]

NFL Network later filed a discrimination case against Comcast with the FCC, claiming that since Comcast doesn't charge extra for its owned and operated sports channels Versus and The Golf Channel, it's unfair to charge extra for NFL Network. On October 10, 2008, the FCC ruled as follows:

"In the Second Report and Order, the Commission emphasized that the statute “does not explicitly prohibit multichannel distributors from acquiring a financial interest or exclusive rights that are otherwise permissible,” and thus, that “multichannel distributors [may] negotiate for, but not insist upon such benefits in exchange for carriage on their systems.” The Commission stated, however, that “ultimatums, intimidation, conduct that amounts to exertion of pressure beyond good faith negotiations, or behavior that is tantamount to an unreasonable refusal to deal with a vendor who refuses to grant financial interests or exclusivity rights for carriage, should be considered examples of behavior that violates the prohibitions set forth in Section 616.”We find that the NFL has presented sufficient evidence to make a prima facie showing that Comcast indirectly and improperly demanded a financial interest in the NFL’s programming in exchange for carriage. We further find that the pleadings and documentation present several factual disputes as to whether Comcast’s retiring of the NFL Network is the result of Comcast’s failure to obtain a financial interest in the NFL’s programming. Accordingly, we direct an Administrative Law Judge to hold a hearing, issue a recommended decision on the facts underlying the financial interest claim and a recommended remedy, if necessary, and then return the matter to the Commission within 60 days."[61][62]

FCC Program Access Complaint

Comcast's trial about the NFL Network's Program Access Complaint with the FCC, filed in May 2008, before an administrative law judge began on April 14, 2009. At issue is whether Comcast's placement of the NFL Network on a digital sports tier ("Sports Entertainment Package") represents discrimination prevented by the 1992 Cable Act.[63]

On April 17, 2009, Comcast chairman and CEO Brian Roberts testified that Comcast is willing to move the channel from the Sports Entertainment Package to a lower priced base package if the subscriber fee was reduced to 25 cents per month. NFL Network currently charges a 75 cents per month fee. He claimed that overall, Comcast saves $50 million a year in license fees by leaving the channel on its Sports Package, which in turn leads to savings for its customers.[64] On May 19, 2009 it was announced that a deal had been reached to move the channel to its "Digital Classic" tier.[65]

Reputation for poor customer satisfaction

There have been many reported incidents with individual customers describing less than satisfying interactions with Comcast's customer services. These include situations with a technician falling asleep on the job,[66] customers having to spend hours on the phone to fix simple problems, and sending a bill addressed to "Bitch Dog" to a customer who had recently complained about her service.[67] On October 15, 2007, a 75-year old Comcast customer named Mona Shaw entered her local Comcast offices with a hammer and destroyed some office equipment before being arrested and fined for damages. Mrs. Shaw was angry and frustrated due to a previous encounter with Comcast customer service in which she and her husband wanted to speak with the manager and were forced to wait outside the offices for two hours before being informed that the manager had already gone home.[68][69] Comcast's customer service quality has prompted several individuals to create blogs and websites dedicated to informing the public of Comcast's service, including one run by media columnist Bob Garfield.[70]

In 2004 and 2007, the American Customer Satisfaction Index survey found that Comcast had the worst customer satisfaction rating of any company or government agency in the country, including the Internal Revenue Service. However, the ACSI indicates that almost half of all cable customers (regardless of company) have registered complaints, and that cable is the only industry to score below 60 in the ACSI.[71] Comcast's Customer Service Rating by the ACSI surveys indicate that the company's customer service has not improved since the surveys began in 2001. Analysis of the surveys states that "Comcast is one of the lowest scoring companies in ACSI. As its customer satisfaction eroded by 7% over the past year, revenue increased by 12%." The ACSI analysis also addresses this contradiction, stating that "Such pricing power usually comes with some level of monopoly protection and most cable companies have little competition at the local level. This also means that a cable company can do well financially even though its customers are not particularly satisfied."[72][73] In 2009 Comcast rebounded on its ACSI rating for television and Internet services, moving ahead of Charter Communications and into a tie with Time Warner Cable.[74]

Within the Cable Television needs assessment report for the city of Fort Collins, CO February 10, 2004[75] which was required for Comcast's franchise renewal the city's independent consultant found:"Approximately 62% of the respondents, though, were very dissatisfied (along with another 25% who were dissatisfied) with the cost of cable television service.""A majority of the respondents were satisfied with the friendliness and courtesy of customer service personnel. Overall, approximately 43% of the respondents rated the cable company's performance as fair, 30% regarded it as poor and another 30% rated the cable company's performance as good."

While Comcast does operate some of its own Customer Service Call centers it also outsources Customer Service and some technical support to Convergys Inc a third party call center company.

On October 1, 2008, J.D. Power and Associates published its annual customer satisfaction survey for the nation's top 10 largest cable and satellite television providers. Comcast scored in the bottom 5 for each region of the United States, including 10th in the East Region.[76]

Customer service after Hurricane Ike

Shortly after Hurricane Ike hit the Houston, Texas, area customers received bills and later collection notices for unreturned equipment that was destroyed during the storm. One customer reported a $931 bill which included a $66 credit for interrupted phone service, but also included $1000 charge for not returning her rented DVR, Cable Modem, and other equipment. Comcast responses differed after the storm, with some Customer Care agents telling customers to file with their insurance providers, and other agents advising customers to return their equipment, even if it was ruined or moldy.[77]

Network neutrality

As early as late 2006, Comcast has implemented measures using Sandvine hardware which sends forged TCP RST (reset) packets, disrupting multiple protocols used by peer-to-peer file sharing networks.[78] This has prevented most Comcast users from uploading files.[79]

On August 17, 2007, TorrentFreak reported that Comcast has been preventing BitTorrent users from seeding files.[79] In October 2007, the Associated Press confirmed the story that indicates that Comcast "actively interferes with attempts by some of its high-speed Internet subscribers to share files online, a move that runs counter to the tradition of treating all types of Net traffic equally."[80] In November 2007, Comcast's severe limiting of torrent applications was again confirmed by a study conducted by the Electronic Frontier Foundation, in which public domain literature is distributed over peer-to-peer networks. Analysis of the EFF study finds "strong evidence that Comcast is using packet-forging to disrupt peer-to-peer (P2P) file sharing on their network".[81] The studies show that Comcast effectively prevents distribution of files over peer-to-peer networks by sending a RST packet under the guise of the end user, and denying the connection, which effectively blocks the user from seeding over BitTorrent. Legal controversy arises because instead of simple filtering, Comcast is sending RST packets to Comcast customers, pretending to be the host user at the other end of the BitTorrent connection.[82] Comcast's BitTorrent throttling was revealed to be through a partnership with Sandvine, although Comcast's internal memos instruct employees to respond to the contrary.[83][84]

There is also evidence of Comcast using RST packets on groupware applications that have nothing to do with file sharing. Kevin Kanarski, who works as a Lotus Notes messaging engineer, noticed some strange behavior with Lotus Notes dropping emails when hooked up to a Comcast connection and has managed to verify that Comcast's reset packets are the culprit.[85] A lawsuit, Hart v. Comcast, has been filed accusing Comcast of false advertising and other unfair trade practices for allegedly advertising unlimited high-speed Internet access while in reality working to restrict their customers' usage of the Internet.[86]

In 2007, Comcast customers reported a sporadic inability to use Google, because forged RST packets are interfering with HTTP access to google.com,[87] which has further angered users.[88]

In January 2008, FCC Chairman Kevin Martin stated that the FCC is going to investigate complaints that Comcast "actively interferes with Internet traffic as its subscribers try to share files online".[89] During a February 2008 FCC hearing in Boston, Comcast admitted they paid people to hold seats. The company claimed it was so staffers could attend later, but opponents claimed it was to keep Comcast opponents from attending.[90] The FCC has stated it expects to rule on the issue by June 30, 2008.[91]

Comcast and BitTorrent Inc. agreed in late March 2008 to work together in a collaborative effort that will leave the network provider to reconfigure its network to manage traffic in a more protocol-agnostic way.[92] Implementation was projected for late 2008.

Prior to implementation of Comcast's apparent agreements with BitTorrent, Inc., Comcast is reported to be continuing to limit bandwidth available to peer to peer applications. In April 2008, Comcast proposed a "P2P Bill of Rights and Responsibilities" to address potential copyright infringement by users of peer to peer applications,[93] but some scholars argue that this is a veiled attempt by Comcast to strengthen its traffic management capability rather than fight copyright infringement.[94]

On August 21, 2008 the FCC issued an order which stated that Comcast's network management was unreasonable and that Comcast must terminate the use of its discriminatory network management by the end of the year. (File no: EB-08-IH-1518). On January 18, 2009, after reconfiguring their traffic management regime, Comcast was asked by the FCC to address their alleged throttling of VoIP customers.[95]

Lobbying efforts

Analysis indicates that Comcast spends millions of dollars annually on government relationships.[96][97] Regularly Comcast employs the spouses, sons and daughters of influential mayors, councilmen, commissioners, and other officials to assure its continued preferred market allocations.[98][99][100][101]

Comcast occasionally lobbies against "à la carte" bills that would give consumers the option to purchase individual channels rather than a broad tier of programming. Although they claim the reason for this is to keep customer costs lower,[102] these issues continue to garner attention from state governments, the United States Congress and former Federal Communications Commission Chairman Kevin J. Martin.[103]

HDTV claim and quality

Comcast has started transmitting three HD channels per Quadrature Amplitude Modulation (QAM) carrier, rather than two per QAM like some other video service providers. Though more cost effective and many consumers have not reported a difference, this additional compression has been noticed and measured by savvy customers as a reduction in the quality of broadcasts.[104] Comcast claims to have more HD choices than DirecTV by including Comcast's on-demand and pay-per-view assets. Each HD on-demand program is counted as an HD "choice" by Comcast.[105]

Versus / DirecTV carriage dispute

On August 18, 2009, satellite TV provider DirecTV informed its customers that it may drop Versus after August 31 if a new carriage agreement isn't made with Comcast.[106] Robert Mercer, director of public relations for DirecTV, said: "Versus' overall ratings are poor and have not increased nearly enough to justify what we're paying them, let alone the significant increase they're asking for. He added "It is a significant rate hike and the deal is discriminatory because Versus is not offering the same package options as other distributors."Versus responded in a statement released August 20 that said it has added "many marquee properties" and has become "the fastest-growing sports cable network in the country."[107] The price cable systems pay is reportedly 18 cents per subscriber.[108] The rate Versus is asking of DirecTV is unknown. DirecTV dropped the channel at midnight on September 1, replacing it with the message "Versus is no longer available on this channel. Comcast, which owns Versus, has forced us to take down the channel because we will not submit to their unfair and outrageous demands. For more information go to www.directv.com/versus." DirecTV said it already pays Versus more than any other independent distributor and that the 20% hike it is seeking "for what is basically a paid programming and infomercial channel with occasional sporting events of interest is simply piggish. Comcast has set a market with arms length negotiations with these other distributors and DirecTV expects equal treatment. But we want them to understand that we must hold the line on programming costs and protect them from unwarranted price increases, especially in this challenging economy."

Versus responded by saying: "On behalf of millions of passionate sports fans, we are disappointed that DirecTV has chosen to remove Versus from its service and deny their subscribers access to our all-encompassing coverage of the sports they love. Since our last deal with DirecTV, Versus has added many marquee properties and has become one of the fastest-growing sports cable networks in the country. Versus offered DirecTV a fair and reasonable offer to carry the network at the market price. We hope DirecTV will make the right decision for their customers and put Versus back on the air."[109] The next day they said the dispute is about placement, not prices. DirecTV wanted to take Versus away from 6 million subscribers who were receiving it for no additional cost. That was simply not acceptable for us. We hope to resolve things amicably, but that's a non-starter." Those increases aren't true," said Davis. "We're simply asking them to pay what the other providers are paying." He added "If the quote-unquote 'leader in sports' considers the Stanley Cup playoffs and Lance Armstrong's comeback as paid programming and infomercials, then I think the average fan knows they're not the real 'leader in sports.' That's an insult to all the fans of those sports." Versus reportedly charges 27 to 29 cents per subscriber.[110]

Versus launched a national newspaper ad on September 4 saying "Worthless: That's what DirecTV thinks of the sports you love". It then urges DirecTV customers to switch providers.[111]

Signal intrusion & accidental transmission of pornography

On May 1, 2007, during a broadcast of the preschool progam Handy Manny, Comcast had briefly replaced the program on Disney Channel's cable channel assignment with hard-core pornography for subscribers in Lincroft, New Jersey. Comcast's response to the complaints that ensued from the incident claimed that "We are continuing to investigate the root cause of the incident."[112] A spokesperson for Disney Channel said in a statement "We value the trust that parents have in Disney Channel and our programming," said Disney in a statement, "and certainly take [Tuesday's] regrettable programming disruption in New Jersey extremely seriously.[113]

On February 7, 2008, Comcast subcribers in Nashville, Tennessee also saw pornography via the cable provider on Cartoon Network. The incident which happened in the early morning hours, and was broadcast for at least an hour. Vice president of Nashville's Comcast provider, John Gauder apologized and stated "We apologize for any inconvenience some of our Comcast cable TV customers in Middle Tennessee experienced Thursday as a result of some highly unusual issues... It appears that a subscription movie channel was inadvertently shown on other channels which normally carry news, sports, children's and other entertainment programming… We are taking the appropriate steps to ensure that this highly unusual incident does not happen again."[114] Comcast said that engineers thought they had fixed the glitch which occurred on multiple cable channels at midnight earlier that night, but the error reappeared at around 4 a.m., when the cable company decided to remove the channels from the lineup.[115]

On February 1, 2009 during Super Bowl XLIII, Comcast's transmission of NBC affiliate KVOA (channel 4) in Tucson, Arizona was interrupted for approximately 20 seconds replacing the telecast of the game via NBC with soft-core porn from the adult pay-per-view channel Shorteez, in which a man and woman were shown on a sofa, and subsequently the man unzipped his pants, revealing his genitalia. This accidental display affected Comcast's analog cable subscribers in parts of the Tucson area.[116] The substitution appears to have been made at Comcast, not at KVOA, leaving KVOA's over-the-air, satellite and other cable providers viewers unaffected. Also, Comcast's high-definition transmission of KVOA was not affected.[117] Comcast launched an investigation on the incident with the FBI stating that it was an "isolated, malicious act".[118] Comcast also offered to give a $10 credit to any customers who say they viewed the approximately 30-second clip.

DNS hijacking

Comcast turns on DNS hijacking option for its paying cable broadband customers by default. When customers accidentally type the non-existent web address they are redirected to the Comcast search screen with advertisements. Comcast calls this option 'Domain Helper' and gives customers an option to disable it.[119] But many unaware customers will just see the ads even though they pay for their broadband service.

Notes

Philadelphia portal
Companies portal


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  41. ^ U.S. Olympic Cable Network Put on Hold, Mediaweek, August 17 2009
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  110. ^ Multichannel News September 2, 2009 Versus-DirecTV Dispute About Subscriber Loss: Davis - Network President Says DBS Provider Wants Sports Service To Shed 6 Million Subscribers
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  119. ^ http://dns-opt-out.comcast.net/help-index.php

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