published Monday, December 5th, 2011

EPB, AT&T and Comcast compete for Chattanooga customers

Chattanooga seems an unlikely battleground for the future of the American living room, yet it's one of the few American cities with three choices for the triple-play combo of TV, Internet and phone service.

Since launching their products in the last two years, EPB and AT&T have slugged it out with Comcast, trying to gain the upper hand in a market that has exploded with choices in recent years.

And the challengers are slowly gaining ground.

Comcast revenues in the city of Chattanooga fell by 8.4 percent from January to June this year as EPB signed up new customers for its fiber-optic telecom services and AT&T expanded its U-Verse Internet Protocol TV, according to franchise fees paid by local cable providers.

But while some of Comcast's customers are defecting, the nation's biggest cable company remains the dominant TV provider in Chattanooga with taxable revenues this spring four times greater than EPB and nearly 50 times bigger than AT&T's U-Verse, city records indicate.

Comcast doesn't release subscriber data at the local level. But according to city franchise fees paid by cable TV providers, Comcast still has more than 100,000 customers in the Chattanooga area.

EPB is quickly gaining ground, however. Since launching its fiber-to-home service in the summer of 2010, EPB Fiber has attracted more than 33,000 residential customers to its high-speed Internet, TV or phone service, generating more than $3.8 million a month in revenue from just its residential division. EPB has already built a $45 million-a-year residential telecom business in less than two years and EPB President Harold DePriest said he expects to attract even more subscribers.

"We're seeing our growth continue -- every week I've got more customers than I had the week before," DePriest said about the telecom division that is already profitable for the city-owned utility. "We must be doing something right."

AT&T had only 821 TV customers in Chattanooga through its U-verse system this spring, although that number is projected to grow as the service is made more widely available.

Nationwide, AT&T added about 400,000 subscribers nationwide with its Internet Protocol-based TV, roughly the same number of consumers that analysts estimate quit local cable companies.

"We're in a very competitive market," said Joe Johnson, head of local marketing firm Johnson Group, which is working for Comcast. "Right now, you see the most competitive activity, the most switching back and forth and the most new customers coming into the market."

COMPARING STRENGTHS

It's a battle in which each competitor is going to "go with their strength," whether it be raw speed, content or connectivity, Johnson said.

EPB, for its part, holds the distinction of launching the nation's fastest Internet service last year when it rolled out 1-gigabit broadband to more than 170,000 Chattanooga-area customers. The utility even bested the mighty Google, the search engine giant that has yet to switch on its own gigabit network in Kansas City.

Comcast, too, places a great deal of importance on the Chattanooga market, emphasizing content and connectivity.

The Scenic City is a test market for the media conglomerate, which means Chattanooga residents get first crack at new technologies -- home security systems, mobile apps and a new OnDemand interface -- that other cities have to wait months to try.

Comcast also offers faster speeds in Chattanooga and bundles HBO for free in some local packages.

AT&T, a smaller but still aggressive presence in the city, has been stepping up the pressure with affordable plans that play to today's connected lifestyles while working to maintain relationships with business users.

By doubling down in its DSL technology and moving to a model that's completely based in the cloud, AT&T -- like EPB and in many ways, Comcast -- can make upgrades on the fly without ever entering a customer's house.

"For us in Chattanooga, that leaves the consumer with a good set of choices," Johnson said.

RELIABILITY

Kristen Squires switched from cable to AT&T's U-Verse last month at her Cleveland, Tenn., residence, because of what she cited as unreliable cable service and illogical TV controls.

"I've got four kids and it takes an act of Congress to block your inappropriate channels, then you have to go through another setup to block the titles you don't want people reading," she said.

To keep the Internet running with her Charter Cable in Cleveland, "I'd have to go crawling under my kitchen cabinet, unhook it, let it sit, and hook it up in the correct order to reset the stupid thing," Squires said. "AT&T has their modem and router in one box, so we haven't had any issues," other than a hungry raccoon that chewed through her telephone wires initially.

Aside from the raccoon, her story is typical of many cable customers who seek relief from perceived problems by embracing a competitor, even though a new service provider can come with a new set of problems.

"I don't think AT&T is as fast as Charter," Squires added.

An informal Times Free Press Facebook poll showed that many users were switching from cable to an alternative, whether it was EPB, AT&T or another regional option.

But a truly fair comparison of all the TV, Internet and phone choices is difficult, with the true cost of connectivity often obscured by Christmas specials, gift card deals and front-end discounts.

SERVICE OPTIONS

All of the local providers brag about their reliability and service quality.

AT&T won the "highest in residential television service satisfaction in the South Region" recognition from J.D. Power & Associates for 2011.

EPB claims a service advantage with call center employees physically located in Chattanooga.

Comcast insists it also is working hard on its customer service, said Jim Weigert, vice president and general manager of the Chattanooga market.

The company has reduced its service window to two hours with the help of a new automated system that routes technicians to their next job using GPS tracking, and Weigert himself monitors interactions with customers to make sure that subscribers are treated fairly, he said.

"I keep hearing this [EPB] commercial that we'll come with booties on," Weigert said. "But we were wearing booties before booties were cool."

COST COMPARISONS

On cost, Comcast and AT&T offer steep discounts on prices for up to a year with a contract, masking the future cost of their bundles, while EPB charges more in the short term but doesn't increase prices later on.

Speeds vary widely, from Comcast's 1.5 megabit-per-second economy package to EPB's top tier of 1,000 megabits per second, known colloquially as a "gig."

In general, a Times Free Press comparison showed that EPB offers faster Internet speeds for the money, and shows equal pep in both uploading and downloading content, with Comcast and AT&T trailing on quickness.

But EPB's TV offerings are more limited, bested by higher channel counts at Comcast and AT&T, which have a national presence and increased buying leverage with content providers.

Comcast also crushes the competition with a wealth of content that can be played any time from its on-demand library, which AT&T and EPB have yet to successfully emulate.

AT&T, on the other hand, claims more HD content than either Comcast or EPB, and is the only provider to offer "quad-play" -- a bundle that includes wireless phone access, spokeswoman Cathy Lewandowski said.

Taking things a step farther, Comcast is testing home security and home automation in Chattanooga, making all a house's functions easily controlled by a smart phone from anywhere in the world.

CUT THE CORD

But despite the old-line cable providers' best efforts, a growing group of consumers is still cutting the cord and exploring other options in record numbers, according to The Associated Press.

In a tally by the AP, eight of the nine largest subscription-TV providers in the U.S. lost 195,700 subscribers in the April-to-June quarter.

That's the first quarterly loss for the group, which serves about 70 percent of households. The loss amounts to only 0.2 percent of their 83.2 million video subscribers, the AP reported.

Analysts chalk up the losses to the poor economy, which has put pressure on consumers' ability to pay for premium services such as cable TV.

But people are also canceling cable in favor of cheap Internet video, and some are turning to traditional antenna TV.

Rossville resident Kelly Gillenwater once paid $130 for Comcast's double-play combo, but couldn't afford the bill without a steady source of employment, she said.

So she returned her cable box to Comcast and set up the rabbit ears.

"We pick up all the channels we need on the antenna, and get our Internet through Cricket," she said, referring to the pay-as-you-go wireless Internet provider.

"If we want to watch something that we possibly might see on TV, we go to our Internet and boot it up," Gillenwater said.

Wi-Fi THREAT

Customers like Gillenwater, who embrace wireless Internet or only pay for pure Internet access, can be a threat to service providers, but there's no consensus on how to address those changes in consumers' technology preference.

"Everybody in this business is going to deal with the fact that young folks don't use landlines," DePriest said. "It's a generational thing. I don't think it will happen extremely quickly. It won't happen overnight, but that's an irreversible trend."

Comcast is launching apps to allow users to record and watch TV shows, and testing apps that control a home's air-conditioning and even apps that will allow Xbox 360 users to watch live TV on their game consoles.

The company has purchased more content than both its competitors combined and owns NBC Universal, and by controlling what people see it can avoid becoming just a pipe.

AT&T already owns a chunk of the wireless market through its AT&T Wireless subsidiary, and has set up more than 30 Wi-Fi hotspots in the Chattanooga area, which U-Verse customers can access for free, said Lewandowski.

The company is betting big on Wi-Fi, especially since its nationwide user base made 37 Wi-Fi connections every second in the third quarter, tripling the number of connections to 301.9 million from the third quarter of 2010.

"Wi-Fi connections made in a single month now exceed the total connections made in all of 2009 and are five times the total number of connections made in 2008," Lewandowski said.

EPB has taken a different tack, preferring instead to simply charge others, like the City of Chattanooga, to build Wi-Fi on top of EPB's fiber grid.

But the biggest danger providers face is themselves, DePriest said.

Wireline providers have a long history of becoming complacent, dictating to customers instead of listening to them, he said.

"To stay on top, we have to invest in tech and what people want," DePriest said. "We have met the enemy, and he is us."

about Ellis Smith...

Ellis Smith joined the Chattanooga Times Free Press in January 2010 as a business reporter. His beat includes the flooring industry, Chattem, Unum, Krystal, the automobile market, real estate and technology. Ellis is from Marietta, Ga., and has a bachelor’s degree in mass communication at the University of West Georgia. He previously worked at UTV-13 News, Carrollton, Ga., as a producer; at the The West Georgian, Carrollton, Ga., as editor; and at the Times-Georgian, Carrollton, ...

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Comments do not represent the opinions of the Chattanooga Times Free Press, nor does it review every comment. Profanities, slurs and libelous remarks are prohibited. For more information you can view our Terms & Conditions and/or Ethics policy.
tbfltri8 said...

I have the AT&T U-Verse service and I'm not impressed. While the service is reliable and connectivity has not been an issue, the picture quality is not as good as DirecTV, I've had continual problems with the TV box and AT&T's so-called "award winning" customer service is great, if you can find a way to interact with an actual human being at AT&T.

December 4, 2011 at 9:45 a.m.
lcoffey1 said...

EPB is an excellent local utility and provides an excellent fiber optics. It is only a matter of time before they dominate the local cable, internet industry.

December 4, 2011 at 11:38 a.m.
newshound_1 said...

epb wins Customer service hands down (I've used Comcast, and AT&T) epb wins Internet speed hands down epb wins because it's local, our $, our community.

December 4, 2011 at 2:28 p.m.

Switched to EPB saved $100 a month and get great customer service support with no bad attitudes. It is a no brainer for me they are the best.

December 4, 2011 at 3:47 p.m.
Onceuponatime said...

I had Comcast but had several issues so I switched to EPB and felt ripped off. The TV fails in comparison. When I recently moved I jumped ship back to Comcast. Best part of it all is apparently while there is no contract with EPB if you cancel within a year they charge a $75.00 cancellation fee that no one tells you about when you call to set-up service because supposidly "It says it on the website." I'm much happier with Comcast this time around and have had no issues.

December 5, 2011 at 8:34 a.m.
compspeed said...

Just curious Onceuponatime, what is it about the TV portion of EPB that fails in comparison to Comcast? I'm asking as someone who is contemplating a change in service providers.

December 5, 2011 at 9:22 a.m.
signal said...

I switched to EPB from Comcast about a year and a half ago and have been very happy. Internet speed is fantastic and the TV looks great. They've added over 40 new channels this year with NO rate increase. The couple of times I've had to call EPB customer service someone has answered the phone immediately and was able to help me out quickly. The few times I had to call Comcast customer "service" did not go so well to say the least.

December 5, 2011 at 10:19 a.m.

Onceuponatime is telling a story. I have had comcast and now have EPB and there is no comparison between the two. EPB doesn't have the crappy, fuzzyness in ony of their channels and their HD offerings are crystal clear. I wouldn't go back to comcast for anything. Best service I have ever had.

December 5, 2011 at 10:38 a.m.
Onceuponatime said...

FlyingPurpleSheepleEater, you don't even know me so how can you say I am telling the story when I am telling the truth it is not the picture that my complaints fell with it was the lack of programming available on their on demand. I haven't experienced any issues with my Comcast picture, btw.

Compspeed, my issues were as follows: The on demand was terrible. It doesn't even half a quarter of the programming Comcast has to offer. Also whenever I tried to watch something from the DVR or from their On demand my screen would turn solid blue and flash No Signal for a minute solid then continue onto the programming. It was extremely annoying. This happend when I lived in St. Elmo and when I lived of Forest Ave. Please keep in mind this was on a older TV and then it also happend on my new flat scren TV. It also seemed to freeze and then tried to catch up.

I am much more satisfied with Comcast.

December 5, 2011 at 12:19 p.m.

It's good to get more details. Thanks for the clarification. I can't really speak to the on-demand offerings since I subscribe to netflix and have no need of it. The TV portion, however is fantastic. As to the problems, you are describing, I have never had those issues.

December 5, 2011 at 2:11 p.m.

It's unfair to list EPB has an equal competitor since they have additional funding sources as the city-owned electrical power provider. In additional, EPB owns the utility poles so they have first rights to repair and they charge both AT&T and Comcast to use the poles.

The question is: why doesn't EPB open-up their city financed fiber network to AT&T and Comcast? Then we would have a fair playing field.

December 5, 2011 at 2:15 p.m.
Pizzaguy said...

Bookie- AT&T had about $112 billion gross revenue, Comcast had $38 billion and EPB had $505 million in gross revenue in their last reported fiscal years. So Comcast had 75.2 times more revenue than EPB, but that isn't a level playing field?

I can't wait to dump Comcast as soon as I have EPB ready in my area. In the last 12 months have had 4 calls into Comcast over 2 bad cable modems, and the "digital" blender in my channels. Had to swap out a set top and they "tweaked" the signal strengh. No credits for disrupted service from Comcast.

December 5, 2011 at 2:49 p.m.
geekgal said...

Interesting comment in the article: "EPB has taken a different tack, preferring instead to simply charge others, like the City of Chattanooga, to build Wi-Fi on top of EPB's fiber grid." Since City of Chattanooga owns EPB, EPB is charging them for the building out of the wireless network? So is this a double dip on the taxpayers? Or maybe a triple dip since they built most of the network with federal funds? Things that make you go hmmmmm?

December 5, 2011 at 7:45 p.m.
Pizzaguy said...

geekgal- So do you also think EPB provides electricity at no cost to the City of Chattanooga? That would be like saying that the gas companies don't internally charge their fleets for fuel. Just because it is non-profit owned by the city, doesn't mean services provided are free to the city. Take an accounting class.

December 5, 2011 at 8:19 p.m.
smileyboy said...

To all you Comcast and AT&T lovers, when was the last time you got credit on your phone, cable or internet bill when your service was down? From Comcast- NEVER! From AT&T- NEVER! From EPB- EVERY TIME IT IS OUT FOR MORE THAN 24 hours, I get a credit. When the tornado's came thru April 27, 2011, my power was out for 3 days, I got 3 days credit on my Fi account. The customer service is outstanding, the response to my problems-fast and resolved if there are any. I talk to local people 24/7/365- I am so sick of Comcast's whiney, crying commercials, but then I guess I would be crying too if I had lost nearly 40,000 customers. Keep bringing it on, EPB!!! I hope Comcast folds and takes their crappy service and lying ads to some other poor town.

May 25, 2012 at 2:34 p.m.
AJManzano said...

Well my Boyfriend retired from AT&T. He says that the company has gone to crap since the merger of Bellsouth to AT&T. The customer service is crap, they go up every year on their services just like Comcast does. They all lure you in with a low price and then they all go up on the cost of the services usually within the first 6 months. We still have our cellphones with Cingular (AT&T) and we have our cable with Comcast, AT&T provides our home phone. You really save more money if you don't bundle. Keep your TV service with the cable company and the Home or business phone with the Phone Company, Get your internet from the one you prefer. If you have basic phone service and not a bundle with TV and internet, then they cannot go up on your phone service without Public Service Commission approval. Those rates for residential phone service is governed by state tariffs submitted to the state PSC for approval.

December 19, 2012 at 2:22 p.m.
AJManzano said...

We are only paying about $75-$85 a month total (counting gov'mt fees) because we keep our TV with the cable company Comcast charges us $29.95 a month, Our basic home (Plain old Telephone) service phone is about $25.00 a month and our AT&T internet is just $19.95 a month. So that means we are only paying between $80 to $90 a month keeping it all separate and (not) getting all the bells and whistle's on the Home phone or the fastest speed on the internet. Our 2 cellphones are $80 a month also with AT&T-Cingular but with my Boyfriends discount we end up only paying about $45-$50.00 for everything on our 2 Iphones.

December 19, 2012 at 2:31 p.m.
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