Offering businesses broadband services over hybrid fiber/coax (HFC) networks is a great opportunity for Charter Communications Internet. It is a segment that is underserved, can be reached with our plant and has higher revenue-per-drop potential than residential services. The commercial segment also provides assurance of continued revenue growth when “share-of-wallet” limitations of the typical household entertainment budget are encountered. Commercial services also offer cable operators the potential for higher returns on capital than some residential services.

What follows is a look at what Charter Communications has learned over the last six years in developing commercial services. Techniques on market sizing are presented followed by network and service evolution. Customer segmentation is addressed. Support strategies and issues are highlighted as well as obstacles and challenges that we face as an industry.

Determining market size is important for gauging the attractiveness of the business opportunity. You can accomplish sizing by using a combination of macro and micro techniques. From a macro perspective, broad gauge estimates of market size can be made using Federal Communications Commission (FCC) residential and commercial telecommunications expenditure data and homes passed by cable plant. According to the FCC, total expenditures on communications services in the United States were $292.7 billion in the year 2000.

The commercial and special access services segment account for 52.8 percent or $154.6 billion (FCC Form 499-A, 2000). Applying a correlation between homes passed and businesses passed in metro/geographic areas, communications service expenditures within and near Charter Communications serving geographic areas are estimated to be $15.3 billion. This is based on its 9.9 percent share of homes passed.