Bob Keane

Believe it or not, a lot of thought went into naming Comcast Business Communications, the commercial telecommunications division of multimedia giant Comcast.

The name basks in the goodwill associated with Comcast's multiple media activities. It reflects a commercial, non-residential purpose, and it emphasizes communications.

“We debated for a long time in the first half of last year whether we should be some other new, unique name,” recalls Bob Keane, CBC's president. “The bottom line is, we think it's an advantage being in the marketplace with the Comcast name.”

The telecom market these days is such that any advantage, no matter how small, is something to be grabbed.

“The industry is in such a tailspin it's hard to keep focus on what we have to do in our value proposition, but Comcast is very supportive of what we're trying to do,” Keane says.

CBC augments Comcast's broadband network with new optical and access technologies that feed commercial customers. Founded in early 2000, the company launched services in Baltimore in first quarter 2001 and will start in Pennsylvania, New Jersey and Detroit later this year.

“Are we behind other companies?” Keane asks. “I would suggest we're behind, but we're not late. Technology continues to evolve, and with what we have available to us in capacity and reach, we're going to deliver greater, better technologies.” CBC's networks use advanced optics and dense wave division multiplexing transmission systems.

CBC even has the people piece covered, Keane says. With start-ups and competitive providers falling hard, getting qualified people to join yet another newcomer shouldn't be an easy task for anyone.

It is for CBC, says Keane.

“There's no better timing,” he says. “In terms of the telecoms, dotcoms, whatever you want to call them, there are clearly human resources available in this space.”

There's also room to move. The CLECs are fading, and “there's truly no competition in any fundamental way in the local voice product area,” Keane says.

CBC can fill that space profitably, he says.

“We have provided guidance to the Street that we still believe this is a business that has, in terms of gross margin, in the 65% to 70% range — conservatively,” he says.

CBC's plan is to recognize the mistakes made by others who tried to compete with the ILECs and avoid them. The CLECs and ISPs erred in trying to use existing infrastructure to compete with incumbents, Keane says. CBC's infrastructure builds off the incumbent cable operator. The only difference is, the customer is a business, not a residence.

“It's not about a land grab, which is what the data CLECs were all focused on. They weren't focused as much on customers — they were focused on geography,” Keane says.

CBC's model is to compete on an equal footing with the ILECs, then grab the market by offering services that don't exist, he says.

“The Achilles heel of the ILEC is DSL,” Keane says. “If they have to use copper, it's limited by distance and speed.”

CBC's passive optical network technology isn't limited, opening the company up to flexibly offer whatever customers want.

“There's a sweet spot between a T-1 and a DS-3,” he says. “We're offering an optical network that supports voice, data and Internet and we can measure the bandwidth based on the needs of our customers. Our architecture is an optical architecture to serve that sweet spot. That's a value proposition I don't think the ILEC has outside plant to support.”

Besides, he says, “There have to be competitive alternatives to the ILECs as they continue to operationally crush companies like Rhythms and Covad and NorthPoint Communications. They're going to come under greater and greater scrutiny. The chains that bind them today are going to become greater and greater. I think we have an opportunity to be a true competitive alternative to them.”

Keane doesn't ignore the political clout the ILECs bring into every market — he just doesn't think it's important to CBC. “The reason other new entrants had to work the regulatory environment so aggressively is because they needed fundamental access from the incumbent LEC,” he says. “We don't need that. We have the ability to be the facilities-based alternative to them.”

Keane also is confident that he'll be able to groom and retain employees.

“The reason most people go to start-ups is because of equity plans and such,” he says. “Comcast is a very smart holding company. They've allowed us to build an equity plan based on the growth of this business, meeting our management plan.” Part of the compensation package is a stake in Comcast, a more valuable commodity than CBC.

“Comcast, being committed to the community and being the third largest cable operator, has a great attraction for those who want to be in a start-up but want to have some security associated with the ability to have a funded business plan,” he says. “We are a funded business plan.”