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Good Things Really Do Come in Threes

Cable World, April 14, 2003

Byline: STACI D. KRAMER

Sprawl is too gentle a word for the urban/suburban/exurban chaos known as Atlanta, where people live in their cars and cell phones are more common than drivers' licenses.

Hugging interstates 75 and 85 may offer an opportunity to experience road rage or have a religious experience, but you can only get a sense of the real Atlanta by braving one of its main arteries. Take Peachtree all the way from downtown through the high-rent Buckhead district, then follow as it curves north changing names as it enters the suburbs. Or start downtown at Marietta, home to the Atlanta Journal Constitution and neighbor of the CNN Center/Philips Arena complex, following as it becomes North Avenue and then twists through neighborhoods so ethnically and financially diverse it's hard to believe they are connected by a single road. From there you can turn on to West Paces Ferry and journey through the governor's neighborhood, then head toward Buford Highway and watch as the billboards and store signs turn bilingual or Spanish-only.

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And all that driving still won't get you close to covering the nearly 5,000-square-mile Atlanta metro area with its 20 counties, dozens of municipalities and 1.6 million television homes.

That's the market Bill Connors and his hand-picked team at Comcast Cable wants to own. They've divided the complex 650,000-subscriber area into three parts, like Caesar at Gaul - and now they hope to conquer it. The North, Metro and Perimeter systems, established after the merger with AT&T Broadband last October, are headed respectively by Greg Capranica, Michael Hewitt and Kirk Dale. They belong to the Atlanta region managed by Connors, who reports to John Ridall, president of the Southern division.

"This was a classic market that could no longer be run by a central management team because of the different tactical issues, marketing issues and customer issues that are so diverse in this marketplace," says Connors.

It was no surprise when Comcast announced that Atlanta would be one of two systems completely rebranded right after the merger. MediaOne and AT&T Broadband (referred to as the "predecessor" around here) had reputations that made the market a poster child for DBS. DirecTV and Dish are at nearly 25% penetration. Cable is barely at 50% marketwide - closer to 30% in Metro - and this is a market that's 95% rebuilt.

The irony is striking. Atlanta, after all, was the birthplace of the Turner cable empire, and is home both to Cox Communications and Scientific-Atlanta. Of 1.3 million homes passed, many are either Comcast customers or in a Comcast area.

Comcast Cable president Steve Burke describes Atlanta as a microcosm of what the company is doing in former AT&T systems as it breaks down complex systems into more manageable operations. "Every system is doing their own thing," says Burke. "They're like three different cities."

Looking at a map, anyone else might have been tempted to split the area into east, central and south systems. It looks like it might be more efficient that way. Instead, says Connors, system lines were drawn with two criteria in mind - technical and "a commonality of consumer profile."

Sitting in a conference room on a Monday in March, flanked by his system VPs and regional SVP of marketing and customer care Gene Shatlock, Connors explains the three-region setup using a large, colored map as a prop. The light green four counties of the North system represents newer Atlanta, Connors says. "What used to be bedroom communities four, five, six years ago are now a connected part of the Atlanta DMA with its own infrastructure, very new, very large home profiles. It's a very upscale demographic with its own set of growth issues [including] being more susceptible to competitive pressures because there's more expendable income. And yet, on the flip side, it's a very lucrative, very attractive market for high-end services like high-speed data, digital products."

The North system has the highest DBS penetration, admits Greg Capranica, who thinks heavy rebuild activity by AT&T "not executed well" played a role in the migration. "There are a lot of households with a lot of expendable income and little patience," he says. "I think a lot of people bought into the dish to avoid the service hassle. I've talked to neighbors and part of the issue is AT&T couldn't get service to them quickly enough."

The Perimeter system, in blue, stretches around two-thirds of the other systems and covers all or part of 14 counties from northeast to the southwest. Currently a rural bedroom community, the belief is that this area will be more like the North system in just a few years, and a firm part of the Atlanta DMA. As a market, Comcast will see close to 70,000 new homes built this year. Almost 40,000 will be in the Perimeter system alone as one-time agricultural fields give way to homes and shopping centers.

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Good Things Really Do Come in Threes

Cable World, April 14, 2003

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