Cable Still Dominates Small Business Sector

BTR_Feature_SMB_7-8-13 1776 is a business incubator serving 125 fledgling companies from a campus that is barely a stone’s throw from The White House. In addition to this facility, 1776 supports virtual membership from anywhere. It runs a “start-up school” and plans to introduce a business accelerator in the autumn. It heavily relies on its telecommunications, which all is hosted in the cloud.

In other words, 1776 is a small company with needs that are just as sophisticated and morphing just as quickly as those of large enterprises. On June 27, the company announced that it retained Comcast (NASDAQ:CMCSA) Business Services for all of its telecommunications needs.

The MSO is providing 1776 with Business TV, Business VoiceEdge and Business Class Voice services. These services are supported by a dedicated 1 Gigabit per second Ethernet symmetrical circuit that is scalable to 10 Gbps and a data circuit providing 100 Megabit per second (Mbps) downstream and 20 Mbps upstream.

Co-founder Donna Harris said that Comcast provides services to a similar incubator in Chicago, which helped it immediately grasp what 1776 needs. In addition to understanding the bits and the bytes, Harris said that Comcast brought a human element to the table. “The responsiveness of their team is great. It is not just the speed [of setup] but the enjoyment of working with them. They are nice people who want to help a startup go above and beyond,” she said.

SMBs Still Cable’s Bread and Butter

Many of the headlines and much of the commentary surround the cable industry’s commercial initiatives during the past couple of years has focused on what the industry needs to do to improve its standing in the enterprise sector. That makes sense, of course. Getting even one of big multinational to say yes, after all, means a massive and immediate boost to the MSO’s bottom line – and image with other enterprises.

But the focus point remains on far less dramatic deals. The cable industry is by nature a local entity, and its bread and butter remains the small- and medium-size business segment with which it shares a tremendous amount of DNA. The fact that the cable/SMB connection remains strong was reinforced by a J.D. Power and Associates’ survey released last month that found that Cox, Cablevision’s Optimum Business, Charter and Comcast were the top four finishers in the very small business category.

That category focuses on businesses with between two and 18 people, according to Kirk Parsons, J.D. Power’s Senior Director of Telecom Services. He said that respondents in that category are particularly sensitive to service reliability, want problems to be fixed quickly and insist on being informed of the progress toward that resolution. Those attributes, combined with aggressive pricing and the presence in the community – the attributes that have served them well in the local arena for decades – still are strong enough to enable the four MSOs to dominate, Parsons said.

The relationship with 1776 fits well into Comcast’s suite of offerings. Vice president of marketing Karen Schmidt said that Comcast’s focus still is squarely on companies with fewer than 20 employees. However, even significantly bigger companies – with as many with 5,000 employees or more – tend to be underserved by telcos whose focus is more firmly on the truly huge Fortune 100 and Fortune 500 firms. Thus, the target market open to Comcast -- and, by extension, the rest of the cable industry – remains broad. What may be a bit difference today is that somewhat bigger firms, though those falling way short of multinational status, are more willing to seriously consider the industry’s pitch.

The cable industry’s pitch to small businesses has not changed too much, either. That is, perhaps, because it hasn’t needed to. It continues to be a mix of advanced technologies and TLC. “Like us, cable is local and close to customers,” Schmidt said. “That is common across the industry. We have a willingness to serve and a demonstrated commitment to small businesses. Cable offers HFC and DOCSIS 3 infrastructure. That far outstrips DSL, and is what most businesses have access to from the telephone companies is DSL. We have a superior technology to that.”

Cox is also sticking close to its small business knitting, said Todd Smith, the operator’s Director of Media Relations. He pointed to the launch of a cloud-based merchant and card processing service call PayLeap. The service, he said, is based on a strategic relationship with Acculynk. Cox also has launched a website, Cox  Blue, that is aimed at helping small businesses.

The goal is to build on the MSO’s business strength. “We are moving are moving beyond core telecommunications services to help customers more broadly communicate,” Smith said.

Carl Weinschenk is the Senior Editor of Broadband Technology Report. Contact him at

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