MediaOne

For the Indian television channel owned by Madhyamam Group, see Media One TV.
Comcast MO Group, Inc.
Private (Subsidiary of Comcast)
Industry Cable television
Predecessor American Telephone and Telegraph Company
Founded 1983 (1983)
Headquarters United States
Parent Comcast

Comcast MO Group, Inc., formerly MediaOne Group, Inc. and originally US WEST, Inc., was a cable company that was founded in 1983 as one of the original Regional Bell Operating Companies. Founded under the Modification of Final Judgement (United States v. Western Electric Co., Inc. 552 Fed. Supp. 131), a case related to the antitrust breakup of AT&T, it began expansion into the cable television field and later spun off U S WEST Communications and US WEST Dex into a "new" US WEST in 1998.

History

Until 1990, US WEST was a regional holding company that owned three Bell Operating Companies: The Mountain States Telephone and Telegraph Company (or Mountain Bell, based in Denver, Colorado); Northwestern Bell, based in Omaha, Nebraska; and Pacific Northwest Bell, based in Seattle, Washington. It also had a directory publishing division, LANDMARK Publishing, which later became US WEST Direct. In 1988, the three companies began doing business under the US WEST Communications name. On January 1, 1991, Northwestern Bell and Pacific Northwest Bell were legally merged into Mountain Bell which was renamed US WEST Communications, Inc. US WEST was the first RBOC to consolidate its Bell Operating Companies (the other was BellSouth).

New technologies

US WEST became a pioneer in the introduction and rapid system-wide implementation of telephone technologies designed by Bellcore (now Telcordia Technologies) in the 1980s and 1990s. Their lead in this push became one that many other Regional Bell Operating Companies had to scramble to keep up with.

US WEST's success in this endeavor was for multiple reasons which included their then-innovative use of "test-markets" for staggered roll-outs of new calling features in middle-sized cities such as Boise, Idaho, Minneapolis, Minnesota, and Phoenix, Arizona before releasing them on a wider scale. (They were the first communications provider to use this strategy called beta-testing, a term used for many years in the software development industry). Their geographic presence featured telephone switching equipment that had been constructed fairly recent to the time frame, thereby requiring fewer upgrades. Their service area was also experiencing population growth at a tremendous rate, tripling their subscriber-base in a short time and increasing revenues.

As a result of its rapid "bring-to-market" abilities and continued success in the advances in technology, the company quickly adopted a new slogan— "Life's better here."

Expansion into cable

U S WEST Media Group logo, 1995-1998

In order to segregate its regulated telephone service from its unregulated cable TV businesses, US WEST separated their assets and businesses into two groups named US WEST Communications Group and US WEST Media Group and issued to its shareholders separate shares for the Media Group. Although both were part of the same corporation, the shares of each group reflected and tracked the results and prospects of the group's business, and could be traded separately. The Media Group's ticker symbol was "UMG" while communications group continued with the "USW" ticker.

In 1995, the Cable Modem service was later renamed to MediaOne Express. After completion of that deal, the company completed a co-branding deal with Time Warner's cable modem Internet business under which MediaOne would become MediaOne RoadRunner.

Acquisitions

In 1996, U S WEST acquired Continental Cablevision for $5.3 billion in stock and renamed it MediaOne (initially named Media1). Amos B. Hostetter, Jr., a founder and former chairman and CEO of Continental resigned after U S WEST moved the company's headquarters from Boston, Massachusetts.[1]

In time the service also included pay-per-view, and a self-branded high-speed cable modem internet service named Hiway1 (Highway One). Hiway1 was an early provider of the cable modem technology.[2] Most early-period modems for the service were created by the manufacturer LANcity (Bay Networks).

Name change

In 1998, US WEST split up into two separate companies. US WEST, Inc., or the "Old US WEST", changed its name to MediaOne Group, Inc. and transferred the U S WEST Communications and U S WEST Dex divisions to a new entity incorporated in Delaware named US WEST, Inc. The "new" US WEST was then spun off to shareholders of Communications Group stock. The split became effective June 12, 1998.[3] Chuck Lillis became CEO of MediaOne Group.

Acquisition by AT&T

In 1999, Comcast first made a bid for MediaOne. Comcast said they would pay $60 billion and assume all of MediaOne's debt.[4][5] On May 6, 1999 AT&T, not wanting to be outdone promised about $62 billion instead, and paid the "breaking up of the MediaOne-Comcast merger agreement" allowing MediaOne to be purchased by AT&T.

MediaOne RoadRunner et al. next became AT&T branded. The portion which ran television was "AT&T Cable Television", another part for Internet became known as "AT&T Broadband Internet" and the third became "AT&T Digital Phone". The buyout of MediaOne by AT&T happened close on the heels of AT&T's other cable company purchase TCI. That buyout by TCI already made AT&T the largest cable company, and MediaOne only served to increase their margin of leadership.

In the summer of 2000, AT&T Broadband purchased the cable television system serving the city of Boston, then controlled by New York-based Cablevision, for $1.1 billion in stock, cash and a trade of other cable systems. The deal effectively made the Boston/New England region MediaOne's largest clustered market. In exchange for the Boston system, Cablevision also received several of AT&T Broadband's systems which served suburban New York communities.[6]

AT&T was unable to make the merger work for many reasons, and split the company into three separate companies: AT&T Corp. continued and retained its long distance business, AT&T Wireless Services was spun off as a public company, and AT&T Broadband was purchased by Comcast. At this point, MediaOne became known as Comcast MO Group, Inc.

Criticisms

US WEST, as a telephone service provider, was accused by critics of failing to meet service needs within a reasonable time frame and of practicing predatory billing and collection methods. While the company often claimed that subscriber demands were often greater than their ability to fulfill orders, many critics pointed to high profit margins, spending on bring-to-market technology and lackluster investment in customer support.

US WEST went through a period of union-management relations that bordered on positive during the early 1990s. After a failed re-engineering strategy, relations fell apart due to increasing hostility between company leaders and employees. When the company rolled out its new slogan – "Life's better here" – employees began wearing buttons and shirts that stated that "Life's Bitter Here".

The company was fined multiple times by the State of Oregon for these practices during the 1990s. S WEST was also, at several times, involved in smaller litigation with other states within its service area for similar complaints from customers.

Qwest, MCI, and smaller competitive local exchange carriers (CLECs) who had recently been allowed to offer local service within US WEST's service area (as a result of the Telecommunications Act of 1996) complained to the Federal Communications Commission (FCC) that U S WEST was uncooperative in releasing their formerly owned lines to these new companies. These types of complaints landed US WEST in court yet again, offering the complex question of whether or not the government could legally offer the sale of owned property to other companies in the event of deregulation.

In 1996, reports appearing in The Denver Post and the Rocky Mountain News revealed that CLECs had lodged complaints with the FCC against US WEST, including multiple complaints from Qwest Communications International, Inc. The complaints alleged US WEST neglected or seriously delayed release of "bundled loops" as required by the Telecommunications Act of 1996, making it difficult for competitors to provide local telephone service to their customers. Other competitors began following suit, and charged US WEST with monopoly-like or anti-trust type behavior.

Many customers criticized AT&T over the transitioning from Mediaone.net to attbroadband.com and subsequently attbi.com email addresses.[7][8] A final subsequent change from attbi.com to Comcast.net also drew further criticism from the company's longest customers who may have gone though the several prior email changes.[9][10]

Markets

The main markets & regions for MediaOne were:[11]

Besides the United States, MediaOne Group also had several smaller business operations in:

Almost all of MediaOne's international holdings were sold-off to satisfy regulators for the merger with AT&T.

See also

References

  1. ↑ Variety Staff (6 October 1997). "Media One exec team to relocate". Variety. Retrieved 11 March 2011.
  2. ↑ Due to the early adoption of the technology, customers could not yet have access to any bi-directional communication via the cable modem. Hiway1's cable company's infrastructure was incapable of two-way communication. The customer would only be able to use the Hiway1's cable modem for downlink and a regular in-home modem (presumably over the telephone line) for uplink communication.
  3. ↑ "U S WEST 1999 Annual Report" (PDF). Retrieved 2013-03-13.
  4. ↑ Grice, Corey (3 May 1999). "MediaOne-AT&T deal pushes Comcast aside". CNET News. Retrieved 11 March 2011.
  5. ↑ Borland, John; Grice, Corey (23 April 1999). "AT&T makes surprise bid for MediaOne". CNET News. Archived from the original on 11 July 2012. Retrieved 11 March 2011.
  6. ↑ "AT&T, Cablevision Swap". Warren Publishing, Inc. 2000. Retrieved 10 April 2012.
  7. ↑ [Mediaone.net domain name change: A warning]
  8. ↑ Howe, Peter J. "Some At&T Users Face E-Mail Shift". Highbeam.com. Retrieved 2013-03-13.
  9. ↑ Janesfolkart (1 comment ). "Comcast: AT&T transition steady so far". News.cnet.com. Retrieved 2013-03-13.
  10. ↑ "Theirs is not Your Domain Name". Thehotiron.com. 2007-02-17. Retrieved 2013-03-13.
  11. ↑ "This is Broadband. This is the way". Web.archive.org. 2000-03-04. Archived from the original on September 4, 2012. Retrieved 2013-03-13.
  12. ↑ AT&T Absorbs MediaOne Labs After Deal Closes


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