Fighting the Elements Is a Full-Time Job

Cable World,  Sept 15, 2003  

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Byline: MAVIS SCANLON

When Mediacom Communications began upgrading its systems in earnest, throughout 2001 and into '02, it ran into more than a few challenges in and around Mobile, Ala. Since there was limited information on the system - Mediacom acquired several disparate systems before going public in 1999 - the engineering team had to do a walk-through of the entire system before blueprints for the upgrade could be drawn up.

"The blueprints just didn't exist," says Scott Randolph, senior technical operations manager for Mediacom's Southern division, which serves 454,000 customers in six states. "It was a very small operation down there, and as someone built a house they would run cable to it."

That was the biggest obstacle to overcome in upgrading the Mobile area to its current 870 MHz, two-way-capable status - that is, until the region was hit with back-to-back tropical storms. In September 2002, Tropical Storm Isidore swamped the Gulf Coast with more than 15 inches of rain, knocked out power to over 200,000 homes and businesses and generated several tornados that touched on the Florida panhandle. A week later, Hurricane Lili forced the closure of dozens of ports. Upgrade construction was interrupted for weeks.

These days, Mother Nature may be the least of the issues Mediacom has to face. Sometime over the next few months, EchoStar Communications will offer local broadcast channels in Mobile, a port city of a half million residents situated roughly halfway between Tallahassee, Fla., and New Orleans. Like New Orleans, Mobile's Mardi Gras is a big tourist draw, as are its sandy, white beaches. But unlike its big bawdy neighbor to the west, Mobile is better known for its low cost of living than its party and music scene.

These days, about 69% of the Mobile area population is white and 27% black, according to Census 2000. Over half the population has a household income of over $50,000, according to Scarborough Research.

Mediacom's Mobile system, the fifth-largest in the company, includes some 2,600 miles of plant, much in rural areas where satellite operators try to lure cable customers with lower-priced packages. But Mediacom is contending with more than just competition from satellite. Last month the town of Fairhope, an upscale retirement community on the Eastern shore of Mobile Bay, voted to build its own cable system. The issue has been percolating since the late 1990s, says Dave Kane, Mediacom's VP, operations, for the Florida and West regions. Mediacom acquired the Fairhope system in early 2001 from AT&T Broadband, holds the cable franchise through 2008 and serves about 5,000 customers in the area. According to reports in the Mobile Register, residents are upset over rate increases and have complained of service problems. More than 150 people were on hand Aug. 7 for a town meeting held in advance of the city council vote to build a cable system. On Aug. 12, the proposal passed by a wide margin.

Even so, the town appears unclear on the exact cost of building a broadband system. "There isn't a lot of consensus over there as to what they really want to do," says Kane, who has tried to heighten awareness of what building and managing a cable system entails. Kane even gave Fairhope Mayor Tim Kant several case studies of local municipalities that got into cable and floundered.

On the satellite front, DBS providers took Mediacom by surprise earlier this year with the intensity of their marketing efforts. Mediacom lost 24,000 customers in the second quarter, mostly in areas such as Des Moines and Cedar Rapids, Iowa, where so-called local-into-local service offerings took hold.

Mediacom CEO Rocco Commisso said on a recent conference call he believed that offering advanced services in a bundle would ensure customer loyalty. In the meantime, however, the company may offer discounts or institute a smaller rate increase in 2004.

So how is Mediacom's Mobile system faring amid the uncertainty over just how much pain satellite can inflict?

"Only the ostrich would say we don't have a true competitor in Dish," says Kane.

Customer service and digital are two areas where Mobile is fighting back. The system is offering 40% discounts on the monthly rental rate for second and third Motorola DCT-2000 set-tops. "That is being received with open arms in the field," Kane says.

The Southern division has also increased the number of customer service reps to 82 from 67, an increase of about 22%. That gives customers constant access when they call in for connections or upgrades. The divisional call center also boasts a "tier one" team dedicated to high-speed Internet sales and service.

Digital is also considered a success. Last October, for example, a three-day marketing blitz on broadcast TV - the company bought spots on the local late news and early morning time slots - worked "very well," says Kevin Killen, director of sales and marketing for the Southern division. The spots promised immediate installation for digital and high-speed data.