Comcast

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Comcast.JPG
Type: Public
Industry: Telecommunications
Founded: 1963
Founder(s): Ralph J. Roberts
Daniel Aaron
Julian A. Brodsky
Headquarters: One Comcast Center
Philadelphia, Pennsylvania
Country: USA
Employees: 102,000[1]
Revenue: $37.937 as of 2010[2]
Website: corporate.comcast.com
Blog: Comcast Voices
Facebook: Comcast
LinkedIn: Comcast
Twitter: TwitterIcon.png@comcast
Key People
Brian Roberts, Chairman, President, & CEO

Comcast is a media, entertainment and communications provider in the United States. Its primary business involves the operation of Comcast Cable, which provides video, high-speed internet, and telephone services for residential and business establishments via cable systems. The company also owns a majority share of NBC Universal, owner and operator of entertainment and news cable networks such as the NBC and Telemundo broadcast networks, local TV stations, TV and motion picture production studios, and theme parks. The company trades on NASDAQ under the ticker symbols CMCSA and CMCSK.[3]

Origins of Comcast

On November 13, 1963, Ralph Roberts purchased American Cable Systems, a small cable TV operator owned by Jerrold Electronics in Tupelo, Mississippi for $500,000, after selling his interest in Pioneer Industries. At that time, American Cable Systems had just five channels available to its 1,500 subscribers. Roberts believed that the business had a great potential. After purchasing the company, Roberts encouraged Daniel Aaron, Systems Director, and Julian Brodsky, CPA, who were both employees at Jerrod Electronics, to join him in managing the business. According to Roberts, his objective was to bring television to people who either couldn’t receive television signals because they were located too far from TV stations, or lived in areas with only one TV station running.[4][5]

In 1969, Roberts re-branded American Cable Systems and incorporated the company as Comcast Corporation in Pennsylvania. The name of the company was coined as a portmanteau of the words "communications" and "broadcast" in order to provide the company with a more technological distinction.[6]

Initial Public Offering

In 1972, Comcast went public at $7 per share and sold 430,000 shares.[7] Comcast has a dual share structure with Class A and Class B shares. Only the Class A shares were offered to the public. Each share is equivalent to one vote. Roberts held Class B shares wherein each share is equivalent to 15 votes. This ensured that he would still control the majority vote (80%) of the company despite the fact that it went public. The Roberts family still owns Class B shares today.[8]

Company Expansion

The following years, Comcast acquired several cable franchises in different locations including Paducah, Kentucky; Flint, Hillsdale and Jonesville, Warren, Clinton, Sterling Heights and St. Clair Shores in Michigan; Northern New Jersey; Lower Merion, Pennsylvania; and Corinth, Mississippi. The company also acquired the Muzak franchises in Indianapolis, Buffalo, Scranton, Pennsylvania, and Peoria, Illinois in 1983. During the same year, Comcast expanded in the United Kingdom through its partnership with Ladboke, a gambling and entertainment company. Comcast secured a license to provide cable television systems to residents in suburban London.[9]

In 1986, the company acquired 26% of Group W, which doubled the company's cable subscribers to 1.2 million and provided the founding investments for QVC, a television home shopping company. In 1988, the company purchased 50 percent stakes in Storer Communications, Inc, growing Comcast into the fifth largest cable systems operator in the United States with more than 2 million subscribers. That same year, the company also acquired American Cellular Network Corporation (AMCELL).[10]

In 1990, Ralph Roberts named his son Brian Roberts as President of the Company, though he remain as the company's Chairman. The company also bought additional franchises in London, enabling Comcast to provide cable services in Cambridge and Birmingham, which increased its subscribers in UK to one million. By 1993, the company's Amcell and Metropone customers reached more than 7.3 million customers.[11]

In 1995, the company purchased 57.45% stakes of QVC valued at $46 per share and assumed the management of the company.[12] The following year 1996, Comcast acquired E.W. Scripps Company with 93.049 million shares of Class A Special Common Stocks valued at $1.552 billion.[13] During the same year, the company engaged in a sports venture and launched Comcast-Spectator after purchasing NHL Philadelphia Flyers, the NBA Philadelphia 76ers, the First Union Spectrum, and the First Union Center. The company also created the Comcast SportsNet Channel. In addition, Comcast also entered in the broadband business after acquiring Sarasota Online, the largest internet provider in Florida.[14]

On March 22, 1999, Comcast announced that it had entered a $60 billion merger transaction with MediaOne Group Inc. The combined company's capitalization was valued at approximately $97 billion, which would have made it one of the largest broadband networks in the United States with 8 clusters at more than 500,000 costumers per cluster, and with more than 11 million cable subscribers.[15] However, MediaOne terminated the merger agreement and paid Comcast a $1.5 billion termination fee.[16]

On November 18, 2002, Comcast acquired AT&T Cable for $47 billion in stocks and assumed the company's $25 billion debt. The combined company was named AT&T Comcast Corporation. Comcast President Brian Roberts assumed the position of CEO, while AT&T's CEO Michael Armstrong became the Chairman of the new company. They had an estimated 22 million subscribers with a projected annual revenue was $19 billion.[17][18]

In 2005, Comcast joined a group of investors that acquired Metro-Goldwyn-Mayer Inc. (MGM), an independent and privately-owned motion picture, television, home video, and theatrical production and distribution company.[19]

In 2006, Comcast entered into a long-term distribution agreement with Walt Disney's Media Networks and Services, including some of ABC's primetime series. The company also acquired Walt Disney's 39.5 stake ($1.2 billion) in E! Networks, making it the sole owner of E! Networks.[20]

In 2011, the Federal Communications Commission (FCC) approved the joint venture between Comcast and GE under certain conditions. According the terms of the merger agreement, Comcast paid GE $13.8 billion to form NBC Universal LLC., wherein 51% percent of newly formed company would be owned by Comcast and the remaining 49% would be owned by GE. The operations of NBC Universal would be managed by Comcast, excluding the Hulu Online Video Services, as the management of that service was shared by NBC with News Corp. and Walt Disney Co. Comcast was not interfere with subscribers' web traffic and agreed to share NBC programming with its competitors and to provide more high-speed internet to communities with limited access.[21][22]

Products & Services

The company offers the following products to consumers:[23]

  • Xfinity TV
  • Xfinity Internet
  • Xfinity Voice
  • Comcast Business Class
  • Comcast Interactive Media
  • Comcast Spotlight

Complaints on the Issue of Net Neutrality

In 2007, Vuze, a video distribution company using BitTorrent peer to peer technology, filed a complaint with FCC against Comcast for allegedly violating the net neutrality principles by throttling network traffic.[24] A similar complaint was filed by advocacy groups and legal scholars from Yale, Harvard, and Stanford universities. According to the complainants, Comcast reduced the ability of subscribers to access legal content by blocking BitTorrent, Gnutella, and Lotus Notes. They requested the FCC to issue a temporary injunction to stop Comcast from degrading services. In addition, the complainants suggested that the Commission should issue a permanent injunction to end Comcast's discrimination. Free Press and Public Knowledge also filed a complaint against Comcast, requesting that the FCC issue a $195,000 fine per affected subscriber.[25] The Associated Press conducted an investigation regarding the issue and found that the complaints were true and subscribers using BitTorrent were blocked from file sharing.[26] In 2008, FCC investigated Comcast and conducted a hearing regarding net neutrality. Comcast denied the allegations, claiming no blocking or downgrading of peer-to-peer file sharing.[27] FCC ruled that Comcast's network management practices violated federal policy on net neutrality. The Commission believed that it had ancillary authority to regulate Comcast under the Communications Act of 1934. Comcast sued the FCC in the District of Columbia's Court of Appeals, questioning the Commission's authority in regulating the company's networks. In 2010, the court ruled in favor of Comcast. The court cited that the Commission failed to tie its assertion of ancillary authority over Comcast’s Internet service to any “statutorily mandated responsibility.”[28][29]

ICANN Involvement

Jason Livingood, Comcast Executive of Internet Systems Engineering is a member of ICANN's Security and Stability Advisory Committee.[30] In 2010, Comcast participated in two ICANN DNSSEC workshops during the ICANN 38 meeting in Brussels.[31][32]

References

  1. Form 10-K
  2. Form 10-K
  3. Company Overview
  4. Comcast Corporation Company History
  5. Ralph Roberts Interview, Part 1
  6. Pennsylvania Department of State Corporations System Search
  7. Comcast Goes Public, 1972
  8. The Value of a Vote: Comcast Dual-Voting Rights Stock
  9. Comcast Corporation Company History
  10. Comcast History at a Glance
  11. Into the Value Zone:Gaining and Sustaining Competitive Advantage
  12. Comcast Corporation Form 8-K Current Report, February 9, 1995
  13. Comcast Corporation Form 8-K Current Report November 13, 1996
  14. Home Internet Providers, Comcast History
  15. Comcast and MediaOne Announce $60 Billion Merger
  16. Comcast-MediaOne Merger Agreement Terminated; Comcast Receives $1.5 Billion Termination Fee
  17. [Comcast wins AT&T cable
  18. Comcast Investor Relations FAQS
  19. ACQUISITION OF METRO-GOLDWYN-MAYER COMPLETED
  20. Comcast And The Walt Disney Company Announce Long-Term Comprehensive Distribution Agreements Securing Carriage for Disney Media Networks’ Products and Services
  21. Comcast Wins U.S. Approval to Buy NBC Universal From GE for $13.8 Billion
  22. Comcast and GE Complete Transaction to Form NBCUniversal, LLC
  23. Corporate Overview
  24. Vuze Complains Comcast Violating Net Neutrality
  25. Comcast Hit with FCC Network Neutrality Complaint
  26. F.C.C. to Look at Complaints Comcast Interferes With Net
  27. FCC Investigates Comcast's Broadband Management
  28. FCC approves light net neutrality rules for wireless
  29. Comcast Corporation vs. FCC
  30. Biographies and Statements of Interest of SSAC Members
  31. Comcast Network Management
  32. DNSSEC Workshop Brussels