News

War of Words with PacBell Gets Piggy

9/17/2000 8:00 PM Eastern

Pacific Bell in California has been relentless in promoting its digital-subscriber line product, branding users of cable's high-speed modems "Web hogs" in its commercials. Those spots have been supplemented with copious direct-mail pieces, print ads and other customer contacts.

Operators have been reserved in their counterattack, aside from successfully demanding a wording change in the "Web hog" ad which clarifies that both DSL networks and cable modems are shared.

But rather than gain a huge competitive lead on other high-speed providers, Pacific Bell DSL been hampered by complaints to state regulators-and bad press-over its inability to deliver the product. According to PacBell, 16 million homes and business are now eligible for DSL-a fraction of the marketplace that receives its ads.

Major stories have appeared in the San Jose Mercury News and The San Diego Union-Tribune and on the front page of the Los Angeles Times. Articles detail missed installation appointments, interminable hold times and frequent outages. A potential class action lawsuit has also been filed accusing Pacific Bell of violating a state law that mandates four-hour customer service windows.

Even some of the marketing has gone bad. In some San Diego neighborhoods, the telco put balloons on houses bearing the "Web hog" label. Consumers though it was an effort to ridicule cable modem customers and a violation of privacy.

"Not only is it rude and obnoxious, but now everyone in my friend's neighborhood knows he has a computer with a cable Internet hookup. Neither of us will ever subscribe to PacBell DSL service because of this poorly thought-out campaign," wrote Jill Lyn Handshew in a letter to the editor the telco trade tele.com.

"That campaign was misconstrued," said Fletcher Cook, a spokesman for PacBell DSL. The balloons were not specifically targeted or distributed to cable homes, he explained.

The message is actually positive, he said: it's OK to be a Web hog, as long as you have DSL.

But armed with the publicity over the competitor's gaffes, operators are specifically targeting PacBell for counter-marketing. Two days after the Los Angeles Times story appeared, Charter Communications Inc. ran a half-page ad, listing all the communities it serves and inviting frustrated and disenchanted PacBell customers to come over to Charter Pipeline.

"We knew we had to respond," said Peggy Boucher, Charter's advanced-services marketing manager. The company also publicizes its up-front investment in more expensive cable modems, which allow it flexibility in its class-of-service settings "so we've always been able to control their use," she added.

The marketers constantly communicate with engineering to ensure that their service claims to customers are correct.

Charter will also repeat a campaign that added a Charter Pipeline promotional "topper" to the front page of home-delivered copies of the Times, executives said. The message will emphasize the operator's speed of fulfillment.

Charter has also formed a competition committee, comprised of executives from all of its departments, to monitor all competitors and collect information from other cable systems. The committee will create employee education materials and perform outreach to community opinion leaders.

"We're not just going to leave it to word of mouth. We're going to take the battle to [competitors], where ever we get the chance," said Joe Camicia, Charter's vice president, government relations for the western region.

The former MediaOne systems, now part of AT & T Broadband West, also target DSL in some of the ads included in their extensive rebranding campaign. In one spot, a diplomat is conducting a photo op with his Asian counterpart.

In the course of media questioning, the diplomat mentions that he's selected DSL for his high-speed needs. When his Asian counterpart hears the translation of that statement, his expression turns to dismay, and he storms out of the talks. The message: be smart, get cable modem service.

Other operators said they have always taken the high road and will continue to rely on prompt fulfillment and reliable service to distinguish them from PacBell DSL.

"You just tell your own story," said Dan Novak, vice president, programming and communications, Cox Cable San Diego. "[PacBell is] still growing, but they still can't deliver further than three miles from their offices. We had the whole market from the start."

Added AT & T Broadband spokesman Andrew Johnson: "Clients want to hear what's available from you, not hear you beating the hand of another high-speed provider."

PacBell's Cook said the company is investing $6 billion to improve its network so DSL will reach 80 percent of its telco customer base. To do that, the telco is building additional gateways and 1,100 central offices have been completed.

Connections are still limited to homes and businesses within 3.3 miles of an office, but that distance should fall as additional offices are completed and if it is successful with a current trial using 10 competitive local-exchange carriers as gateways.

The provider is also driving toward shortening its copper loops to 12,000 feet or less, which will increase the speed of their product to a guaranteed 1.5 megabits per second, he said. All these improvements should help the operator catch up to the high demand, Cook noted.

September