Comcast 2009 Annual Report Download - page 10

Table of Contents
5
Comcast 2009 Annual Report on Form 10-
K
Sales and Marketing
We offer our products and services directly to residential and
commercial customers through our call centers, door-to-door
selling, direct mail advertising, television advertising, Internet
advertising, local media advertising, telemarketing and retail
outlets. We also market our video, high-speed Internet and
phone services individually and as bundled services.
Competition
We operate our businesses in an intensely competitive
environment. We compete with a number of different
companies that offer a broad range of services through
increasingly diverse means. Competition for the cable
services we offer consists primarily of DBS operators and
phone companies. In 2009, our competitors continued to add
features and adopt aggressive pricing and packaging for
services that are comparable to the services we offer. In
addition, phone companies have continued to expand their
service areas, which now overlap a substantial portion of our
service areas. These competitive factors have had an impact
on and are likely to continue to negatively affect our results of
operations. In addition, we operate in a technologically
complex environment where the use of certain types of
technology may provide our competitors with a competitive
advantage and where new technologies are likely to increase
the number of competitors we face for our cable services and
our advertising business. We expect advances in
communications technology, as well as changes in the
marketplace, to continue in the future, and we are unable to
predict what effects these developments may have on our
businesses and operations.
Video Services
We compete with a number of different sources that provide
news, sports, information and entertainment programming to
consumers, including:
•
exploring wireless options to extend our services outside
the home to provide mobility and create new features that
integrate with our services, including through our
investment in Clearwire
•
offering of certain cable network programming to our
customers online through Fancast XFINITY TV
•
DBS providers that transmit satellite signals containing
video programming, data and other information to receiving
dishes located on the customer’s premises
•
certain phone companies that have built and are continuing
to build wireline fiber-optic-
based networks, in some cases
using Internet protocol technology, that provide video and
high-
speed Internet services in substantial portions of our
service areas; these phone companies also market DBS
service in certain areas where they provide only phone and
high
-
speed Internet service
In recent years, Congress has enacted legislation and the
FCC has adopted regulatory policies intended to provide a
favorable operating environment for existing competitors and
for potential new competitors to our cable services. The FCC
adopted rules favoring new investment by certain phone
companies in networks capable of distributing video
programming and rules allocating and auctioning spectrum
for new wireless services that may compete with our video
service offerings. Furthermore, the FCC and various state
governments have adopted measures that reduce or
eliminate local franchising requirements for new entrants into
the multichannel video marketplace, including phone
companies. Certain of these franchising entry measures have
already been adopted in many states in which we operate.
We believe that we have been and continue to be materially
disadvantaged as a result of these FCC rules, which apply
less burdensome standards for certain types of our
competitors (see “Legislation and Regulation” below).
Direct broadcast satellite systems
According to recent government and industry reports,
conventional, medium-power and high-power satellites
provide video programming to approximately 38 million
customers in the United States. DBS providers with high-
power satellites typically offer more than 250 channels of
programming, including video services substantially similar to
those offered by our video services. Two companies,
DIRECTV and DISH Network, provide service to substantially
all of these DBS customers.
High-power satellite service can be received throughout the
continental United States through small rooftop or side-
mounted outdoor antennas. Satellite systems use video
compression technology to increase channel capacity and
digital technology to improve the quality and quantity of the
signals transmitted to their customers. Our digital video
services are competitive with the programming, channel
capacity and quality of signals currently delivered to
customers by DBS providers.
Federal law generally provides satellite systems with access
to cable-affiliated video programming services delivered by
satellite. DBS providers also have marketing arrangements
with certain phone companies in which the DBS provider
’s
video services are sold together with the phone company’s
high-speed Internet and phone services.
Phone companies
Certain phone companies, in particular AT&T and Verizon,
have built and continue to build fiber-optic-based networks to
provide
•
other providers that build and operate wireline
communications systems in the same communities that we
serve, including those operating as franchised cable
operators
•
satellite master antenna television systems, known as
SMATVs, that generally serve MDUs, office complexes,
and residential developments