Comcast 2009 Annual Report Download - page 21

Table of Contents
15
Comcast 2009 Annual Report on Form 10-
K
For example, the FCC has adopted rules and several states
have enacted legislation to ease the franchising process and
reduce franchising burdens for new entrants. See “Legislation
and Regulation” in Item 1 and refer to the “Franchising”
discussion within that section.
We also face other risks related to federal, state and local
regulations. For example, Congress and the FCC are also
considering various forms of “net neutrality” regulation. See
“Legislation and Regulation” in Item 1 and refer to the “High-
Speed Internet Services” discussion within that section. For a
more detailed discussion of the risks associated with our
regulation by federal, state and local governments, see
“Legislation and Regulation” in Item 1.
Weak economic conditions may have a negative impact
on our results of operations and financial condition.
Weak economic conditions persisted during 2009, and a
substantial portion of our revenue comes from residential
customers whose spending patterns may be affected by
prevailing economic conditions. To the extent these weak
economic conditions continue, customers may reduce the
advanced or premium services to which they subscribe, or
may discontinue subscribing to one or more of our cable
services. This risk may be worsened by the expanded
availability of free or lower cost competitive services, such as
video streaming over the Internet, or substitute services, such
as wireless phones. The weak economy negatively affected
our net customer additions during 2009 and also had a
negative impact on the advertising revenue of our Cable and
Programming segments. If these weak economic conditions
continue or deteriorate, our business, results of operations
and financial condition may be adversely affected.
We rely on network and information systems and other
technology, and a disruption or failure of such networks,
systems or technology may disrupt our business.
Network and information systems and other technologies,
including those related to our network management and
customer service operations, are critical to our business
activities. Network and information systems-related events,
such as computer hackings, computer viruses, worms or
other destructive or disruptive software, process breakdowns,
denial of service attacks, malicious social engineering or
other malicious activities, or any combination of the
foregoing, or power outages, natural disasters, terrorist
attacks or other similar events, could result in a degradation
or disruption of our cable services, excessive call volume to
call centers or damage to our equipment and data. These
network and information systems-related events also could
result in large expenditures to repair or replace the damaged
networks or information systems or to protect them from
similar events in the future. Further, any security breaches,
such as misappropriation, misuse, leakage, falsification or
accidental release or loss of information maintained in our
information technology systems and networks, including
customer, personnel and vendor data, could damage our
reputation and require us to expend significant capital
and other resources to remedy any such security breach. The
occurrence of any such network or information systems-
related events or security breaches could have a material
adverse effect on our business and results of operations.
We may be unable to obtain necessary hardware,
software and operational support.
We depend on third party vendors to supply us with a
significant amount of the hardware, software and operational
support necessary to provide certain of our services.
Moreover, some of these vendors represent our primary
source of supply or grant us the right to incorporate their
intellectual property into some of our hardware and software
products. While we actively monitor the operations and
financial condition of key vendors in an attempt to detect any
potential difficulties, there can be no assurance that we would
timely identify any operating or financial difficulties associated
with these vendors or that we could effectively mitigate our
risks with respect to any such difficulties. If any of these
vendors experience operating or financial difficulties or if
demand exceeds their capacity or they otherwise cannot
meet our specifications, our ability to provide some services
may be materially adversely affected, in which case, our
business, results of operations and financial condition may be
adversely affected.
Our business depends on certain intellectual property
rights and on not infringing the intellectual property
rights of others.
We rely on our patents, copyrights, trademarks and trade
secrets, as well as licenses and other agreements with our
vendors and other parties, to use our technologies, conduct
our operations and sell our products and services. Legal
challenges to our intellectual property rights and claims of
intellectual property infringement by third parties could
require that we enter into royalty or licensing agreements on
unfavorable terms, incur substantial monetary liability or be
enjoined preliminarily or permanently from further use of the
intellectual property in question or from the continuation of
our businesses as currently conducted, which could require
us to change our business practices or limit our ability to
compete effectively or could have an adverse effect on our
results of operations. Even if we believe any such challenges
or claims are without merit, they can be time-consuming and
costly to defend and divert management’s attention and
resources away from our business. Moreover, because of the
rapid pace of technological change, we rely on technologies
developed or licensed by third parties, and if we are unable to
obtain or continue to obtain licenses from these third parties
on reasonable terms, our business and results of operations
could be adversely affected.
We face risks arising from the outcome of various
litigation matters.
We are subject to various legal proceedings and claims,
including those referred to in “Legal Proceedings” in Item 3
and those arising in the ordinary course of business,
including regulatory and administrative proceedings, claims
and audits. While we do not expect the final disposition of
any of these litigation matters will