Comcast sucker punches business park startups

by Steve Blum • , ,

Ars Technica enterprised a fascinating story that perfectly illustrates the problem new businesses face when looking for commercial and industrial-grade broadband connectivity. Cable companies – in this case it’s Comcast – advertise blanket availability of their highest service tiers, sign up customers to long term contracts, and then don’t deliver because their plant doesn’t reach the location. Or they dither for a few weeks or months, and then come back with a demand for tens of thousands of dollars in installation fees.

The Ars Technica article highlights the challenges SmartCar faced when they relied on a promise of availability from Comcast’s website, and then moved into a Mountain View business park, in the heart of Silicon Valley. Comcast never fulfilled its promise, but had the balls to take a big deposit and then impose a huge penalty when SmartCar got fed up

After hearing Comcast excuses for months, [CEO Sahas] Katta finally got fed up and decided that he would find a new office building once his 12-month lease expires on April 20 of this year. Katta told Comcast he wanted to “cancel” his nonexistent service and get a refund for a $2,100 deposit he had paid. Instead, Comcast told him he’d have to pay more than $60,000 to get out of his contract with the company.

Comcast eventually waived the fee—but only after being contacted by Ars about the case. As for Katta, he can’t believe it’s “this difficult for startups in Silicon Valley to get Internet.”

Yes, it is that difficult, particularly in older business and industrial parks, where cheaper rents (not cheap – this is Silicon Valley, after all) attract startups. It’s also why cities are increasingly looking for ways to bring competitive dark fiber companies to town, or build gigabit-class networks themselves. In Santa Cruz, San Leandro and other Silicon Valley cities where municipally-led dark fiber projects are underway, Comcast – and others – have extended their systems to unserved businesses quickly and without upfront fees. Without that competitive push, though, companies either pack up and move, like SmartCar did, or don’t consider moving there in the first place.