MEDIACOM

Being researched

MEDIACOM. Mediacom Communications Corporation is the USA's fifth largest cable television provider based on the number of video subscribers, and among the leading cable operators focused on serving smaller cities and towns. The company has a significant concentration of customers in the Midwest and Southeast, and is the largest broadband provider in Iowa. Founded in 1995 by Rocco B. Commisso, the current owner of the New York Cosmos and ACF Fiorentina. Mediacom is headquartered in New York and incorporated in Delaware, United States. Formerly a publicly traded firm, it went private in a $600 million transaction in March 2011 and is owned solely by Commisso as of 2011. (1)

Mediacom offers service in 22 states. About 55% of Mediacom's subscription base is in the 60th through 100th ranked television markets. It is the largest cable company in Iowa and second largest in Illinois. (2)

In reporting its results for the fourth quarter and full year 2016, Mediacom described itself as the 5th largest U.S. cable company, with 1,363,000 customer relationships at the end of 2019. In February 2017, Multichannel News reported that Mediacom was the 9th largest multichannel video programming distributor in the U.S. with 828,000 video customers. Of 2,800,000 "homes passed" (places where Mediacom service can be ordered), 44% of have subscribed to basic cable with Mediacom, and 27.8% have subscribed to Mediacom Internet service. Of homes with basic cable, 54.8% also have "digital cable" service. Counting basic cable, digital cable, high-speed data, and cable telephony as separate revenue, Mediacom had 2,981,000 revenue generating units (RGUs) at the end of 2009. 52% of customers had at least two of video, Internet, and phone from Mediacom, and 18% had all three; over the previous five years, video decreased from 80% of Mediacom's revenue to 64%. (3)

At the end of 2016, Mediacom announced it would become the first major U.S. cable company to fully transition to the DOCSIS 3.1 platform, a new generation of broadband technology. In January 2017, Mediacom launched 1 Gbit/s internet service across its entire Iowa footprint and as a result, all of the nearly 1 million households in the more than 300 Iowa communities passed by Mediacom’s Iowa network now have access to download speeds that are up to 40 times faster than the minimum broadband definition set by the FCC. (4)

As a result of the 1 Gbit initiative, Iowa secured the top ranking in the U.S. News Best States Overall Ranking powered by McKinsey & Company. Iowa’s #1 ranking in the Infrastructure category propelled Iowa to the top of the U.S. News Best States rankings. Specifically, U.S. News found that more Iowa households have access to high-speed broadband internet of at least 1 gigabit per second than any other state in the country. According to Mediacom’s website, the 1gig service is available to most communities where Mediacom offers internet service. (5)

The Des Moines Business Record in its 2012 Best of Des Moines issue gave Mediacom the top award for Best Local Internet Service Provider and Best Company Use of Social Media. (6)

As reported in the Chicago Tribune, July 19, 2012, in July 2012, Mediacom was named by the FCC as one of the nation’s top 4 Internet service providers when it comes to delivering advertised speeds to consumers. (7)

Mediacom broadcast local sports programming on its Connections channel, MC22, along with a simulcast of ESPNEWS. Other sports channels on the Mediacom lineup as of September 2015 include NFL Network, Big Ten Network, SEC Network and the national feed of the YES Network. Mediacom does not carry NHL Network, MLB Network or NBA TV. Mediacom made low-cost plans available by participating in the Connect2Compete program via the nonprofit group EveryoneOn. This program offers cost assistance for wired home Internet access to Mediacom footprint residents who have school-aged children in the K–12 range. The purpose of this program is to provide online access to children for educational purposes and to help close the digital divide, a key issue receiving attention from the FCC in 2019. (8)

According to a report published February 20, 2020, Mediacom's revenues were $2,031.2 million for the year ended December 31, 2019. This reflected a 3.8% increase from the prior year period. Additionally, OIBDA or "operating income before depreciation and amortization" for the same period was $806.4 million, which had a 8.5% increase from the previous year period. Free cash flow during the same period also saw an increase by 31.1%. This positive cash flow was $418.9 million. (9)

Mediacom’s Molli was named the 2019 winner in the category of artificial intelligence (AI) and machine learning at Cablefax's Technology Awards. Mediacom is believed to be the first telecommunication company to create an AI-based system fully integrated with customer service functions. Customers interact with the virtual assistant via SMS text. (10) In 2016, Mediacom Communications was named the Nation's Top Communications Provider by the leading industry publication CableFax. TMT Magazine awarded Mediacom Communications the 2018 Telecoms Award for Best Cable Operator & ISP in the USA. (10)

Despite its awards, Mediacom developed a poor image among many of its customers. The February 2010 issue of Consumer Reports ranked Mediacom 15th of 16 in TV service, 24th of 27 in Internet service, and last of 23 in phone service, based on surveys. (11) The deepening of this trend was affirmed in the June 2012 issue of Consumer Reports, in which Mediacom was poorly ranked regarding TV service, phone service and bundled telecom services, and the third worst ISP only above the two satellite internet companies Wild Blue and Hughes Net. In a survey conducted by Consumer Reports magazine in 2012, Mediacom was the worst cable provider in the country according to the 50,000 people polled. The September 28, 2012 edition of PC Magazine named Mediacom one of the nation’s worst 15 fastest internet service providers. Consumer Reports in 2014 ranked Mediacom telecom bundles (packages with phone, TV, and Internet) 14th among 14 providers, its television servie 17th out of 17, internet service 28th out of 29, and phone service 26th out of 26. (12) In a 2016 telecom report conducted by ACSI, Mediacom occupied last place in customer satisfaction among all companies in the ACSI, regardless of industry. (13)

Locally, Mediacom took over the Dubuque cable franchise in July, 2001 and became the fifth cable provider to the city in twenty years. In the terms of the $1.79 billion cash buyout, Mediacom purchased AT&T Broadband cable television systems serving over 700,000 basic subscribers in Georgia, Illinois, Iowa and Missouri. Mediacom also acquired AT&T Broadband's Internet service. The deal resulted in Mediacom, begun five and one-half years earlier into the eighth-largest cable television company in the United States. With nearly 1.6 million basic subscribers in 23 states, the company announced its intention to begin ever-expanding operating and capital investment plans. The purchase fit well with the city's desire to have a state-of-the-art broadband network. Other city officials hoped that Mediacom would reestablish customer service that AT&T had abandoned after its purchase of Tele-Communications Inc. around 1999. (14)

The hopes for good-will were short-lived. In June, 2002 members of the City Council requested a cheaper basic package. The 68-channel package being offered included three times as many channels as most packages offered in other Iowa communities, but cost three times as much. The interest in a cheaper package hit a peak after the company increased its rates in February by 11.5%. The council went so far as to budget $50,000 for fiscal year 2003 to study setting up a fiber-optic system. Mediacom, however, was not required to offer a cheaper package according to federal regulations which required cable services to provide access to local stations, government and educational channels. Steadily increasing prices and a refusal to offer a less-expensive alternative to the basic service. At the same time, Mediacom was offering access to 13 channels for $12.35 per month in Mason City, 20 channels for $9.87 in Cedar Rapids, and 16 channels for $11.49 in Ames versus the $36.95 charge in Dubuque. (15)

In December, 2002 the City Council extended the contract with Mediacom for three months--the fourth extension of its kind. In February, 2004 formalized its renewal process with the company until June when the company asked for and received another six-month extension. According to Merrill E. CRAWFORD, the cable franchise administrator, acknowledged that the information the company had turned over was late, incomplete and lacking in detail. Some information was not provided at all. (16)

Mediacom entered the telephone business in 2004 through a deal with telecom provider Sprint. The deal allowed Mediacom to use its broadband technology to cut into the traditional local exchange carrier territory. Beginning in 2005, Mediacom officials announced, the company would launch Voice over Internet Protocol telephone service using its own digital network. (17)

In 2006 Mediacom officials announced that the company would annually contribute $25,000 to the Dubuque arts community through a plan administered by the COMMUNITY FOUNDATION OF GREATER DUBUQUE. Grant applications would be filed in mid-summer with the Mediacom Cultural Foundation announcing winners in October. Organizations applying for grants less than $2,500 would not be required to meet matching requirements. Those applying for the maximum $5,000 would have to raise a matching amount. The program was not part of the franchise agreement with the City. (18) By 2019 the program had increased to over $27,000. The same year, Mediacom officials announced that the company for the fifth year was offering $1,000 in scholarship support to fifty students living in Iowa, Illinois, Wisconsin, Minnesota, and South Dakota. (19)

In December 20, 2010 four of Dubuque's local-access television channels changed locations when Mediacom began transmitting those channels in a digital format. Subscribers still using analog televisions who had not obtained a digital tuner would not be able to view those channels. Mediacom officials announced that the company would be totally digital in 2011. The change was mandated by Congress since analog technology used more broadcast spectrum than digital. The rapid expansion of wireless technology had strained existing infrastructure while the change would free up space for public safety communications and make interactive video and data servies which analog could not carry more accessible. (20)

The interest is creating a municipality-operated internet service, first mentioned in 2002, reappeared in 2018. A petition was presented to the council by the Campaign for Dubuque Municipal Internet asking the city to establish a municipal broadband utility. The group argued that a city-owned service would protect privacy and "net neutrality", the idea that everyone should have equal access to the internet content. David LYONS, sustainability consultant for the GREATER DUBUQUE DEVELOPMENT CORPORATION, explained that such an operation would need to have a market share at least as large or larger than any other carrier. Lyons further explained that to provide universal access with fiber or fiber-like connectivity would potentially cost between $30 to $40 million in first-year expenses. (21)

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Source:

1. "Mediacom," "Wikipedia" Online: https://en.wikipedia.org/wiki/Mediacom

2. Ibid.

3. Ibid.

4. Ibid.

5. Ibid.

6. Ibid.

7. Ibid.

8. Ibid.

9. Ibid.

10. Ibid.

11. Kittle, M. D., "Mediacom Ranks Low for Service, Satisfaction," Telegraph Herald, January 9, 2010, p. 1

12. Jacobson, Ben, "Mediacom Bottoms Out in Rankings," Telegraph Herald, April 5, 2014, p. 1

13. Wikipedia

14. Kittle, M. D., "Mediacom Takes Over Local Cable Franchise," Telegraph Herald, July 20, 2001, p. 3

15. Coyle, Erin, "City Eyes Local Cable Startup," Telegraph Herald, June 19, 2002, p. 1

16. "City Should Deny Mediacom's Latest Request," (newspaper editorial), Telegraph Herald, July 18, 2004, p. 16

17. "Mediacom, Sprint Team Up," Telegraph Herald, August 29, 2004, p. 16

18. Voight, Sandye, "Mediacom Draws Up Arts-Grant Plan," Telegraph Herald, April 1, 2006, p. 5

19. "Mediacom Will Award $1,000 Each to 50 Seniors," Telegraph Herald, February 25, 2006, p. 27

20. Piper, Andy, "4 Channels Will Move, Go Digital," Telegraph Herald, December 17, 2010, p. 1

21. Hinga, Allie, "Price Tag for City Internet: $30 Million," Telegraph Herald, June 2, 2018, p. 1