Cobb County does not grant exclusive cable franchises and is open for other companies to compete head to head with Comcast, BellSouth or Charter. We are constantly working towards increasing the number of cable providers franchised to operate in Cobb County.
Despite our efforts, there has been very little interest in the cable industry in competing for customers on the same street. Most companies choose to avoid serving customers on the same street. The cable industry appears to be more focused on purchasing other cable providers, merging or preventing unsolicited buyouts of their companies than expanding into new territories.
The industry term for cable companies building on the same street and competing for existing customers is called competitive overbuilding.
Attracting companies for competitive overbuilding is a big challenge. A few facts to consider:
As an example, consider a new subdivision with 100 homes. When the original cable provider comes in and begins to offer service, they will most likely attract 60 to 80 of the homes as customers. It will take that company approx. 10 years to recoup the cost associated with the expansion and then begin to turn a profit over the initial costs of running service to the subdivision. Recent industry estimates indicate that the cost to lay one-mile of fiberoptic line is approximately $40,000.
When the second company comes into the same neighborhood they will pick up approx. 35 to 40 percent of the first companies customers. The rate of return on their initial investment will easily approach 20 years to reach a profit over initial expenses.
A common opinion is that the new company will capture more of the existing customers than the 35 - 40 percent as indicated in the model. Here are a couple of factors for consideration in this estimate. In a recent survey of 1,000 random property owners in Cobb we found the following: about 25 percent felt that their cable provider did a poor job in service delivery and customer service. 50 percent rated their company as OK in the same areas. Another 25 percent rated their provider as excellent in the same areas.