Charter has launched its customer loyalty program, Live It With Charter, nationwide. The customer loyalty program offers Charter subscribers the ability to accumulate points based on the amount of services they subscribe to. The points can be redeemed for Charter products and services, prizes, and entries into sweepstakes. Prizes range from clothing to HDTV’s. The sweepstakes include vacations. Charter operated a “pilot” of the program for its eastern division prior to this nationwide launch. The program is patterned after similar “rewards” programs offered in other industries including credit card, travel and retail. Think this will help them build better relationships with customers and gain any competitive advantage?

No one is happy about today’s gas prices. Charter recognizes that and has launched a promotion offering gas cards of up to $100. The promotion offers a gift card for gasoline in the amount of $25 for ordering one service, $50 for ordering two services, and $100 for ordering all three of Charter's services. Customers have to order the services online to qualify for the promotion. Charter is also tying the promotion to the government’s tax rebate program, suggesting consumers don’t have to use those funds for gas purchases. Rather, they should use the gas card provided by this promotion.

It’s no secret that the cable industry sees the small/medium business and enterprise sectors as their next big growth engine. Continuing to grow revenue generating units in the consumer triple play sector is nice, but the growth hungry cable industry realizes that won’t be enough to satisfy shareholders and Wall Street. So it’s no surprise to see collaborative efforts like the one announced by Charter and Cox concerning fiber connectivity links. The two large MSOs have agreed to connect each others markets through fiber rings in their Nevada markets of Reno and Las Vegas. Similar links are taking place in California, between Orange County and Los Angeles. Cox and Charter have previously relied on telecom carriers to establish connectivity between markets.

The collaborative effort will target enterprise customers who have multiple locations, with Ethernet and IP transport services. “This agreement brings a competitive choice to businesses that need to communicate with locations in other key commerce hubs in the western U.S.,” said Jim McGann, vice president and general manager, Charter Business. Cox has been quite active with their Ethernet solutions, and now ranks as the fourth largest provider of Ethernet services in the country. By partnering with Charter, they are able to expand services beyond their traditional footprint. Expect to see more collaborative efforts like this among cable MSOs, as they continue to try to compete with well entrenched telecom service providers, who have long viewed the business communications sector and the billions of revenue it generates as their own.

The march continues, with Charter being the latest cable company to break the one million subscriber mark for home telephone service. Charter now reports a 10.6% penetration for residential telephony, and plans to have telephone service available to 85% of its footprint by the end of 2008. Charter announced the new telephone milestones during their fourth quarter 2007 report, which reported somewhat mixed success results. Other metrics of note include a 47% penetration of Charter subscribers who bundle at least two services. Charter also announced their intention to begin testing DOCSIS 3.0 this year, with a goal of deploying it in 2009. DOCSIS 3.0 promises to bring dramatic increases in broadband performance for cable modem technology.

As many predicted, Verizon has expanded their VoIP patent suit prowess, and now have targeted Charter Communications. This latest suit comes on the heels of a similar and ongoing VoIP patent suit against Cox, and a successful 2007 patent offensive on Vonage. Verizon clearly has cable competitors in their sights, and are using patent suits as a competitive tool to erode, stop, or at least slow down cable’s move on their core wireline voice business. Don’t expect the patent lawsuits to slow down either. Most cable companies that are using VoIP utilize the CableLabs specification for VoIP. Verizon is now targeting those specifications, so every cable company that uses them are vulnerable to a Verizon patent lawsuit. Prospective lawsuit candidates include Comcast, Time Warner Cable, and a variety of tier 2 cable companies, including Mediacom. It’s unlikely that these suits will stop cable companies move on voice service. The “genie is out of the bottle” on that. But Verizon can inflict some pain on their competitors, assuming the lawsuits have merit, and either slow them down a bit or extract millions of dollars in settlements and/or licensing fees. In short, expect this issue to grow, and probably quickly.

Charter is bragging a little, claiming their cable modem service is faster than their telco competitors. Their claim is backed by research conducted by comScore, a Reston, Va based research firm. comScore conducted a study comparing Charter cable modem service with DSL services offered by AT&T, Qwest, and Verizon in Charter markets. The study results “ranked Charter's high-speed Internet offerings to be faster, with more reliable speeds, than the combined Internet offerings provided by national phone companies in those areas where Charter provides service.” The fine print of this research should be read to understand how comScore arrives at these conclusions.

As I read these types of announcements, I can’t help but think, "ok", or maybe even, “so what.” It’s pretty well documented that cable modem speeds are faster than telco DSL offerings. So I guess I wonder where the real news here is. I guess it somewhat speaks to the level of competition and the accompanying stakes. When you publicly state the obvious, it reveals that something has you worried. Charter currently offers high-speed Internet tiers of speeds up to 5 Mbps, 10 Mbps, and 16 Mbps in select markets. No widespread DSL offering can match those speeds. At least not yet. AT&T, Verizon, and Qwest have either announced their intention to or are currently building networks that match or exceed these speeds (certainly not universally though). Verizon is taking an FTTH strategy, while Qwest and AT&T are doing FTTC/DSL hybrids. The day is coming when neither side will be able to easily make “faster speed” claims. They'll then have to compete on other merits.

Charter has launched a very aggressive triple play bundle promotion for $69.97. The offer requires a 12 month term, and Charter claims the promotion will save subscribers $600 over the 12 month timeframe. The promotion also offers a double play of phone and broadband for $54.98/month or cable and broadband for $19.98/month. The offer is only open to new Charter customers. Additionally, Charter is offering a $100 gift card if new customers sign up online. The promotion runs through the month of December.

Charter is the latest video service provider to join the announcement parade for HD channel growth. Charter says they are aiming to offer at least 40 HD channels by year end 2008, doubling their current HD capacity. Charter is also joining some of its cable MSO brethren by utilizing switched digital video technology to achieve their 40 channel HD goal. But will 40 HD channels by the end of 2008 be enough?

With DirecTV and DISH both claiming over 70 HD channels now, and Verizon FiOS announcing a goal of 150 HD feeds by year end 2008, you have to wonder if 40 will be enough. The jury is still out on exactly what competitive advantage HD brings. There are passionate arguments that suggest HD is a defining competitive differentiator, but HDTV penetration in the U.S. is still below 25%. Perhaps Doug Ike, vice president of advanced video engineering and applications for Charter is right when he tells Multichannel News, “We’ll stay competitive with our peers.” Perhaps 40 will be enough, especially in Charter’s smaller markets where they compete with small telcoTV providers who have their own HD challenges. HD proponents argue that despite the minority penetration numbers, HD subscribers are high value/margin subscribers, and should be aggressively pursued. The current holiday season will impact this debate. Holiday HDTV sales will be a leading indicator for the growing demand for HD and its competitive implications.

P.S. As I write this post, I’m watching Monday Night Football in HD, and I have to admit, it’s a differentiator for me. It's one of those services that once you get a taste, you never want to go back!

Just after a recent Wal-Mart announcement about a broadband reseller arrangement through HughesNet, Wal-Mart and Charter just announced a partnership to offer Charter’s triple play services throughout 700 Wal-Mart stores. The Wal-Mart stores that offer Charter’s triple play bundle will cover 93% of Charter’s footprint. Including the Wal-Mart store additions, Charter will now have a retail presence in over 1,000 storefronts.

Wal-Mart joins a host of retailers including Best Buy and Circuit City who have partnered to market triple play services. The Wal-Mart move is of particular interest because they sell more HDTVs than any retailer. Having an HDTV source to sell along side the HDTV at the point of purchase creates a significant opportunity for both Wal-Mart and Charter. “As Wal-Mart is expanding its offerings of high-definition televisions, computers and other products, we hope to compliment the customer's purchase with our services. For example, many consumers are unaware when they buy an HDTV, a high-definition source is also required in order to realize the full high-definition experience. In this case, Charter is the source that completes the product offering,” said Jeff Cox, Vice President of Sales Channels for Charter. The accompanying services of broadband and telephone create additional upselling opportunities. It will be interesting to see if Charter places sales reps inside Wal-Mart stores. Such a move could impact the sales process significantly. Wireless service providers have long placed their sales reps inside their partner retail stores, and have been quite successful with it.

Charter launched telephone service and a completed triple play bundle in the Michigan Upper Peninsula towns of Marquette, Escanaba, Iron Mountain, Houghton, and Ironwood. Pricing was unavailable at the time of this post, but Charter typically offers a triple play package of $109/month with a service commitment.