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Cable Ops Recovering In Katrina’s Wake

Cable operators in the Gulf Coast region, hard-hit by last year’s Hurricane Katrina, are showing signs of recovery. Now that many of the repairs in areas devastated by the deadly storm have been completed, and billing issues have been sorted out, they’ve finally begun to market their services again, looking to rebuild their businesses in the region.

The decision to restart marketing efforts didn’t come easily or quickly. After the storm’s September landfall, the first priority of companies such as Charter Communications Inc., Cable One Inc. and Cox Communications Inc. was to evaluate the safety of their employees, assess the status of their plant and then restore service. Selling product was much lower on executives’ to-do list.

[Editor’s note: Multichannel News reported extensively on Cox’s challenges in New Orleans last November; we plan to update that cable operator’s progress in the region next month.]

PERSONAL AND PERSONNEL

The personal restoration came first. An example of that challenge came in Slidell, La., where 39 employees of the Charter system lost their homes. The operator lost service to most of its 171,600 customers.

Charter director of human resources Julie Blankenship was one of the key individuals assisting Charter personnel. One could have forgiven her had she become distracted.

Her own home was destroyed; her parents — including her father, who suffers from Alzheimer’s disease — had to be plucked by air from the roof of their house; and her brother-in-law’s dental business was destroyed, said Anita Lamont, director of field communications for the St. Louis-based MSO.

Blankenship took some time off to get settled, but like most of the rest of the operator’s regional employees, was soon back to work on recovery efforts.

“The people there are so amazing. If you say, 'How are you?’ they say 'We’re doing great,’ even if they’re living in a trailer and it hasn’t been hooked up to services yet,” she said.

Charter responded shortly after the storm by donating $300,000 to the American Red Cross southeast Louisiana chapter, so the money would be put to work close to home.

Then, each key Charter market adopted an employee family, including those displaced and others with special needs, such as workers who’d lost medical items, like hearing aids, and couldn’t function until they were replaced.

Through ads featuring CEO Neil Smit, the company reassured locals that Charter cared about their losses and would remain in the market to restore services.

Slidell is still not “in great shape” as a community, Lamont said. But the high school there is being rebuilt, and Charter has arranged for Cable in the Classroom books and DVDs to be delivered when it’s ready. The operator will also provide connections for a computer-enrichment lab, furnished with Dell Computer Inc. machines.

BILLING SUSPENSION

On the business side, executives made a swift decision to suspend billing for up to three months. Until the end of December, the company worked to determine which addresses still had active service. The company set up a “war room,” staffed with customer-service representatives, to answer calls and determine where subscribers still needed to connect.

“That really helped us plot our recovery,” said Bill Sweeney, vice president of sales and marketing for Charter’s Southeast division.

The operator returned to its normal billing cycles in mid-March.

“We’re back to ground zero and starting anew,” he said.

Now, the company has to decide which products to emphasize, given the new realities of the Gulf Coast.

“We’ll probably not change programming [service levels] substantially … but we’ll adhere to what the community wants,” Sweeney said.

Interest in high-speed data service remains keen: In the aftermath of the storm, many people used e-mail, once it was available, to keep in touch with family and conduct research on such topics as how to collect government benefits.

“Putting together a good bundle is at the top of the list,” he said.

Given the financial straits in which former homeowners find themselves, the company is even considering packaging high-speed data and analog TV service for a more-affordable bundle, Sweeney said.

As the region around Slidell recovers, Charter, which has resumed direct mail and TV advertising in the region, is sensing the subscriber-growth rate will be much higher than it anticipated — a development Sweeney attributed to newly arrived construction workers and other recovery personnel.

GROWTH DERAILED

Cable One also ceased all advertising and public relations efforts after the storm hit its Gulf Coast cluster. The region, including Pascagoula, Biloxi and Gulfport, Miss., is the company’s biggest operation, representing one-quarter of its 702,800 subscribers.

Before Cable One restored services, it kept a running list of customer information. Customers were contacted as services resumed in their area.

Cable One also experienced a good working relationship with the Federal Emergency Management Administration, which actually let the cable operator know before housing trailers were erected. The agency was anxious for its own cable service, too, according to Southeast division director of marketing Ron Maynard.

All customers in the affected zone received a one-month credit on their bill. If customers didn’t notify the operator that they still had a home to serve, Cable One did a “soft disconnect,” electronically deauthorizing service.

The storm disrupted what was to be the company’s biggest growth year in the past decade, said Maynard. After the company launched its internal recovery efforts, it resumed advertising, but not to sell products. The ads were status reports, letting people know how hard Cable One was working to re-establish services.

Now, as people continue to settle into temporary housing provided by the Federal Emergency Management Administration, they are taking advantage of a new bundle offer that now is available to Cable One systems around the country: basic cable, a digital video package and a high-speed Internet service, each priced at $29.95.

The cable operator’s top offer calls for three products: digital cable on two television sets; high-definition digital video recorders; and data service delivered at 3 Megabits per second, for $89.95. To qualify for the offer, consumers must commit to a six-month subscription and provide a credit card.

Normally, after the six-month promotional period, the prices would rise. For instance, Internet service would be billed at $39.95. But Maynard said if Gulf area consumers retain their level of services, the $29.95 per product price point will be honored throughout 2007.

Cable One, which resumed direct-mail efforts in the region last January, has been surprised by the response rate, he said, noting that consumers recognize the offer can save them money on communication and information needs. Moreover, with many area families facing life in a trailer over the next 18 months, they still want news and information, and some entertainment for their children, Maynard said.

MANAGING DEMAND

Interest in their products also was boosted, according to Maynard, in some communities by the problems incumbent telephone provider, AT&T Inc., has endured in restoring service in some areas.

Cable One has deployed some low-tech marketing, but it made a strategic choice not to sell door to door.

“We purposely didn’t put people in the field. We didn’t want to create a demand we couldn’t meet,” he said.

The company is utilizing traveling billboards throughout its Gulf Coast operations and people are approaching those drivers, hungry for connection information, he said.