Comcast looks similar to satellite, telco rivals with 2-year contracts

By requiring subscribers who respond to a promotion it launched this week with Verizon Wireless (NYSE: VZ) to keep their cable services for two years, Comcast (Nasdaq: CMCSA) is pursuing a strategy similar to its satellite TV and telco rivals.

DirecTV (Nasdaq: DTV), Dish Network (Nasdaq: DISH), AT&T (NYSE: T) and Verizon have used agreements that require customers to keep their pay TV services for two years as subscriber acquisition tactic. That strategy has been criticized by cable MSOs in the past since cable operators traditionally haven't required subscribers to agree to keep their service for a set period of time.

Comcast is taking a different approach in the promotion it announced with Verizon on Tuesday, in which subscribers in Seattle and Portland will receive $300 prepaid Visa cards if they subscribe services from both Comcast and Verizon Wireless within 14 days of each order. Comcast notes on a website that details restrictions for the promotion that it will also charge subscribers early termination fees if they don't keep Xfinity services they order through the promotion for two years.

Verizon signed agreements last month to acquire to acquire Advanced Wireless Services spectrum from Comcast, Time Warner Cable (NYSE: TWC), Bright House Networks and Cox Communications. It signed separate marketing deals with the MSOs that allow for the creation of joint promotions like the one Comcast announced this week.

Comcast EVP Dave Cohen said in a blog post Tuesday that the company had considered using the AWS spectrum itself, but found that it would've been too costly to build a sustainable mobile business on its own. "We acquired spectrum with the intention of using it to help position the company to offer wireless services, we analyzed thoroughly whether we could build a business case to do so, but ultimately concluded, as a business matter, not to become a standalone, facilities-based wireless provider, and having reached that decision, considered other alternatives that would promptly allow for the efficient use of that spectrum to improve wireless consumer experiences," Cohen wrote.

For more:
- see Cohen's blog post

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