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Consumer wins: Mich. deregulates cable....
Viewers win as cable war heats up
Eric Morath / The Detroit News
As telecom giants AT&T and Comcast battle for each other's turf, thousands of Michigan consumers could be the clear winners: Lower rates, more product selection and a single bill for multiple services are on the way.
The state Legislature this month set the stage for AT&T to offer Michigan residents U-verse, its equivalent of cable television. Meanwhile, Comcast is adding jobs in Michigan to keep pace with its fast-growing digital phone service.
And both companies are sparring over residential high-speed Internet access and are likely to tangle over cell phone service.
So what does all this mean? It's time to bundle up.
By choosing three or more services from one company -- or bundling, as it's called, consumers can save nearly $20 a month. And the increasing competition among firms to offer phone, television, Internet and even cell phone services will make bundling more available, with AT&T and cable providers Comcast, Bright House and WOW! leading the pack.
"2007 will be a key year, the year when telephone and cable TV companies really start to compete," said telecom industry analyst Jeff Kagan. "I expect to see pricing come down in television and that's something we haven't seen in 30 years."
Statewide franchising on way
While AT&T works to offer improved television with U-verse, the firm already packages satellite television with three other services: home phone, DSL Internet and Cingular cell phone service.
Gov. Jennifer Granholm is expected to sign into law recently passed legislation to allow statewide cable franchising. When that happens, AT&T has vowed to invest $620 million to expand the fiber optic capabilities of its telephone network to carry television signals and higher speed Internet.
The upgrade would bring U-verse service to Michigan and essentially replace satellite in AT&T's offerings. U-verse would feature Internet faster than DSL and provide on-demand content. No pricing or timetable for a U-verse launch have been yet set.
"The largest advantage for customers is the ability to have one-stop shopping, which we believe leads to lower prices on one bill each month," said Kelly Moore, director of U-verse for Michigan.
Cable already touts faster Internet speeds and on-demand movies and shows. Comcast has spent $2 billion in recent years to upgrade its networks to carry those products and its digital voice phone services.
"Our products offer customers savings and the reliability of an established network and the fastest high-speed Internet access," said Comcast spokesman Jerome Espy.
Cells in mix hikes potential
Next to hop on the bundling bandwagon will be cell phone service.
Comcast is piloting a wireless partnership with Sprint in the Boston and Portland, Ore., markets.
Bright House Networks, which provides cable to cities such as Livonia, Novi and Farmington Hills, is working with Sprint to add a cell phone bundle in the near future.
Adding cell service to the package could bring some eye-popping features such as the ability to program a digital video recorder or check a security camera though a cell phone.
"One example is you're driving home, talking on the phone, you want to get off your cell phone, so you walk in the door, pick up your land line and continue the conversation," said Bob McCann, president of the Detroit division of Bright House. "But we're still working to make sure the technology is seamless."
A la carte prospects in limbo
In the changing telecom landscape, some predict that phone and cable companies will split 80 percent of the combined cable/phone/Internet market -- especially as more consumers choose to bundle. The remainder of the market will be shared among a variety of companies, serving customers who prefer one provider for a particular service.
In Metro Detroit, that scenario leaves such companies as Verizon Wireless, T-Mobile and DirecTV without ties to local cable or home phone providers.
Verizon Wireless spokeswoman Michelle Gilbert said she doesn't see the market moving in that direction.
"We know from our research that consumers choose a wireless carrier based on the network," she said. "More than price, they're looking for reliability and we'll continue to offer them that."
Elsewhere in the country, including parts of rural Michigan, Verizon Communications is the primary land line carrier and offers similar bundles as AT&T, including wireless, Internet and satellite TV packages.
Savings may spur bundling
Although consumers are expected to enjoy savings on cable and phone service under the new law, to what degree remains up for debate.
"The question is whether Comcast will be aggressive enough to take a significant amount of phone business from AT&T," said Rick Gamber, executive director of the Michigan Consumer Federation.
"If they are, then I'd expect AT&T to go after their television business."
Gamber warns that consumers who can't afford or don't want all the services offered or prefer more basic phone and cable packages are likely to lose out on savings.
Still, providers and analysts say the market is becoming more consumer-oriented.
"Tomorrow consumers will have one company deliver all their services and say goodbye to the other," Kagan said. "The bundles will become too attractive for price-conscious consumers to pass up."
Eric Morath / The Detroit News
As telecom giants AT&T and Comcast battle for each other's turf, thousands of Michigan consumers could be the clear winners: Lower rates, more product selection and a single bill for multiple services are on the way.
The state Legislature this month set the stage for AT&T to offer Michigan residents U-verse, its equivalent of cable television. Meanwhile, Comcast is adding jobs in Michigan to keep pace with its fast-growing digital phone service.
And both companies are sparring over residential high-speed Internet access and are likely to tangle over cell phone service.
So what does all this mean? It's time to bundle up.
By choosing three or more services from one company -- or bundling, as it's called, consumers can save nearly $20 a month. And the increasing competition among firms to offer phone, television, Internet and even cell phone services will make bundling more available, with AT&T and cable providers Comcast, Bright House and WOW! leading the pack.
"2007 will be a key year, the year when telephone and cable TV companies really start to compete," said telecom industry analyst Jeff Kagan. "I expect to see pricing come down in television and that's something we haven't seen in 30 years."
Statewide franchising on way
While AT&T works to offer improved television with U-verse, the firm already packages satellite television with three other services: home phone, DSL Internet and Cingular cell phone service.
Gov. Jennifer Granholm is expected to sign into law recently passed legislation to allow statewide cable franchising. When that happens, AT&T has vowed to invest $620 million to expand the fiber optic capabilities of its telephone network to carry television signals and higher speed Internet.
The upgrade would bring U-verse service to Michigan and essentially replace satellite in AT&T's offerings. U-verse would feature Internet faster than DSL and provide on-demand content. No pricing or timetable for a U-verse launch have been yet set.
"The largest advantage for customers is the ability to have one-stop shopping, which we believe leads to lower prices on one bill each month," said Kelly Moore, director of U-verse for Michigan.
Cable already touts faster Internet speeds and on-demand movies and shows. Comcast has spent $2 billion in recent years to upgrade its networks to carry those products and its digital voice phone services.
"Our products offer customers savings and the reliability of an established network and the fastest high-speed Internet access," said Comcast spokesman Jerome Espy.
Cells in mix hikes potential
Next to hop on the bundling bandwagon will be cell phone service.
Comcast is piloting a wireless partnership with Sprint in the Boston and Portland, Ore., markets.
Bright House Networks, which provides cable to cities such as Livonia, Novi and Farmington Hills, is working with Sprint to add a cell phone bundle in the near future.
Adding cell service to the package could bring some eye-popping features such as the ability to program a digital video recorder or check a security camera though a cell phone.
"One example is you're driving home, talking on the phone, you want to get off your cell phone, so you walk in the door, pick up your land line and continue the conversation," said Bob McCann, president of the Detroit division of Bright House. "But we're still working to make sure the technology is seamless."
A la carte prospects in limbo
In the changing telecom landscape, some predict that phone and cable companies will split 80 percent of the combined cable/phone/Internet market -- especially as more consumers choose to bundle. The remainder of the market will be shared among a variety of companies, serving customers who prefer one provider for a particular service.
In Metro Detroit, that scenario leaves such companies as Verizon Wireless, T-Mobile and DirecTV without ties to local cable or home phone providers.
Verizon Wireless spokeswoman Michelle Gilbert said she doesn't see the market moving in that direction.
"We know from our research that consumers choose a wireless carrier based on the network," she said. "More than price, they're looking for reliability and we'll continue to offer them that."
Elsewhere in the country, including parts of rural Michigan, Verizon Communications is the primary land line carrier and offers similar bundles as AT&T, including wireless, Internet and satellite TV packages.
Savings may spur bundling
Although consumers are expected to enjoy savings on cable and phone service under the new law, to what degree remains up for debate.
"The question is whether Comcast will be aggressive enough to take a significant amount of phone business from AT&T," said Rick Gamber, executive director of the Michigan Consumer Federation.
"If they are, then I'd expect AT&T to go after their television business."
Gamber warns that consumers who can't afford or don't want all the services offered or prefer more basic phone and cable packages are likely to lose out on savings.
Still, providers and analysts say the market is becoming more consumer-oriented.
"Tomorrow consumers will have one company deliver all their services and say goodbye to the other," Kagan said. "The bundles will become too attractive for price-conscious consumers to pass up."