It was nice to see recognition of the great strides Cable has made in the business services market, in a Reuters article this week:

After winning over many consumers by packaging phone, Internet and TV services into attractive bundles, cable is planning to attack the estimated $100 billion corporate market....Telecommunications analysts said companies like Verizon and AT&T Inc. have become complacent in serving small and medium businesses because they have not faced the same competitive or regulatory pressures as in residential markets.

Cox Communications tops the new Cable World list of best employers in the industry:

When we solicited nominations for this survey, most companies sent the obligatory pitch from their corporate PR departments. But when it came to Atlanta-based Cox, we also received a flurry of e-mails from employees around the country telling us why Cox is such a darned great place to work. Were they prompted to contact us? Probably, but the sheer number of responses convinced us to dig deeper. Once we did, we knew Cox should be ranked No. 1.

Investor’s Business Daily has a follow-up on last week’s leak of a CableLabs report to The Wall Street Journal and trade publication ScreenPlays. As we wrote last week, the report postulates that Cable will have to significantly upgrade its networks to match the speed and capacity of fiber-to-the-premises (FTTP) deployments from the likes of Verizon. We thought the WSJ article made a much bigger deal about the report than was warranted. As IBD reports, that sentiment is widespread:

A report leaked last week that said cable companies might need another round of billion-dollar network upgrades has angered cable firms and forced the authors to backpedal. But it hasn’'t hurt cable stocks, and analysts seem unworried.

The report by CableLabs, a research consortium run by cable TV companies, said cable firms — under a “very speculative scenario” — might be forced to sharply spend more to keep up with the rapid growth of broadband video.....

The report also reportedly said cable firms should have enough bandwidth to deliver fast Internet access, more high-definition TV and phone call services “past 2010.” Cable TV companies — which fund Denver-based CableLabs — were mad the study was leaked. After the reports surfaced, CableLabs issued a statement stating: “The report shows that no major investment is needed for cable to compete with FTTP networks.”

We have to point out what we could best phrase as “curious interpretation of the facts” in a Multichannel News article—“Satellite Rules J.D. Power Survey”—about the market research firm’s latest cable TV/satellite TV customer satisfaction study. To start with, the lead is baffling: "DirecTV and EchoStar Communications once again dominated J.D. Power & Associates’ annual customer-satisfaction survey...."

The fact is that Cable took home the trophy for highest customer satisfaction in three of the four regions. Satellite provider DirecTV got the top honors in one region, and, despite the performance credited to it by Multichannel, EchoStar’s Dish Network didn’t place first in a single region. Cox Communications had the highest score in the West, Bright House Networks in the South, and over-builder WOW! in the North Central region. And here’s another baffling declaration: "J.D. ranked DirecTV as the best pay TV company overall, with the direct-broadcast satellite provider receiving the top rankings in overall satisfaction; performance and reliability; cost of service; billing; image; offerings and promotions; and customer service." Actually, after poring through J.D. Power’s exhaustive 469-page report, we couldn’t find a single place where the firm declared an “overall” winner. Curious, indeed.

A Wall Street Journal article today postulates that Cable will have to invest billions in new network upgrades to weather competition from the telcos, including Verizon. The reporter based his conclusions on a confidential report from CableLabs, the cable TV industry’s research and development consortium. We believe the article makes a much bigger deal about this one report than is warranted.

To start with, this was just one single report. CableLabs routinely evaluates a wide range of emerging technology trends for its members, and cable companies like Cox Communications see numerous conclusions and recommendations from various researchers all the time. The future course of our network design and upgrades can only be charted with a substantial amount of competitive and technological trending information—info much broader than this one single report. Further, as the report in question makes clear, Cable’s hybrid fiber/coax (HFC) network can be “gracefully extended” as bandwidth demand grows. This is a critical point. The article posits that Verizon’s fiber to the premises (FTTP) path will be one of the key factors forcing cable to upgrade. But you have to note that Verizon is investing a reported $20 billion to lay fiber now because they do not have a network that can accommodate a video play, nor can they “evolve” to one. They simply have no choice but to make this investment now, given competition from Cable.

Cox Communications President Pat Esser’s headlining of the UBS conference call yesterday raised some eyebrows in the industry. The headline of a Multichannel News article, “Cox Holds Call; Not Going Public,” answered a question apparently on the minds of many investors when they saw Esser would be featured in securities firm’s periodic “Frontline” series of conference calls. Cox going public again? No, Esser emphasized. His reason for accepting analyst Aryeh Bourkoff’s invitation to participate in the conference call: “We haven’t done one of these in two years, but I thought so much was going on in the business and so many questions were being asked of us, this is a good way to get answers out into the market to do that.” Esser added, “We think that our success over the last decade, and particularly over the last couple of years, proves the power of our network and offerings, and validates the business strategy we’ve been following for more than a decade. So, even though we’re private, we think our recent results are a model for what Cable can achieve.”

In other coverage of Esser's address, the satellite industry’s SkyREPORT took note of Cox’s success in signing up former satellite TV customers in an article entitled “Cable Poaching Satellite Subs Like 1-2-3.” And CableFAX Daily opined that Cable’s publicly traded companies should be grateful to Esser:

An unexpected drop in wholesale prices undoubtedly helped drive cable operator stocks higher Tues—but MSOs might also want to send a thank-you note to Cox pres Pat Esser. Despite heading a private company, Esser held a conference call Tues with UBS analyst Aryeh Bourkoff to tout subscriber metrics and the power of the bundle.

Cable ranks highest in customer satisfaction in three of four regions in the J.D. Power and Associates 2006 Residential Cable/Satellite Study out today (click here for the press release). Cable companies Cox Communications, Bright House Networks and WOW! each took a region. DirecTV took the remaining one. One of the most interesting stats released by J.D. Power is that Cable’s average price is now lower than satellite TV, robbing the satellite companies of a message point they’ve touted aggressively for years. According to J.D. Power, cable customers spend an average of $58 a month, while satellite customers spend $61.

J.D. Power noted that satellite providers maintain a customer satisfaction gap over Cable, although it has narrowed. This is the first year the group has split the cable/satellite study by regions. Last year, WOW! ranked highest overall, ending satellite’s three consecutive years atop the survey. For Cox, the West region honor is the fifth J.D. Power award the company has received in 2006, following highest satisfaction honors in three regions in the telephone customer satisfaction study and highest customer satisfaction among small/midsize business data service providers nationwide.

The number of customers ditching satellite TV and choosing Cable has nearly doubled in the past two years, at least for Cox Communications. Company President Pat Esser will deliver that nugget in a teleconference today sponsored by UBS analyst Aryeh Bourkoff. This year, Esser will report, 11% of the company’s basic-cable connects are former satellite customers, up from 6% in 2004. The defecting satellite customers are big buyers of Cox’s full three-product bundle of cable, phone and high-speed Internet, with 40% of them choosing the triple play. Speaking of the bundle, Esser notes that delivering multiple products has greatly reduced Cox’s own customer defections. Cox’s bundled customers are 41% less likely to churn than single-product customers. Esser notes that Cox is America’s leading bundler, given that the company has delivered multiple services for a full decade, a distinction reinforced by the number of customers the company is taking away from both satellite and telephone companies.

A glitch in AT&T’s U-Verse TV service has bloggers buzzing. According to a U-Verse users site, when the company first started rolling out the service, every set-top box it deployed was a DVR box. The company soon changed that practice and began giving customers only one DVR box; additional outlets in the home were outfitted with a non-DVR set-top. But some users quickly discovered that the additional boxes were basically DVR receivers with the hard drive unplugged. So, they plugged the hard drive back in and, surprise, had DVR service on all sets. Here’s the full “Hacking Your Set Top Box” article on the users site, and what Engadget has to say about it.

Subscriber growth in the second quarter was below expectations for DirecTV. Reflecting tighter competition from Cable, DirecTV added 100,000 fewer customers in the second quarter than the same period in 2005. According to The Wall Street Journal, “DirecTV says one reason for the slowdown is that it has tightened credit policies to reduce the number of customers who defect or simply fail to pay. The company, and rival EchoStar Communications Corp., are also feeling pressure from cable companies that have lured customers by adding phone and Internet services.” EchoStar is also facing bad news that could erode its growth. The company may be forced to drop local network channels delivered to subscribers in other markets, a move that would affect slightly under a million of its 12.5 million customers.