Part 1 of 2

There continues to be a lot of buzz about non-traditional energy companies entering the retail energy commodity supply market.

Google, Apple, AT&T, Comcast, etc.

While current suppliers should be wary of any disruptive new entrants, we do often snicker to ourselves about some of the fears we hear about Comcast.

It doesn't have the same fervent followers (some would say cultists) as say, Google or Apple.

Moreover, as we've noted in this space before, we can't think of another company whose brand was so damaged that they had to attempt a wholesale change (from Comcast to Xfinity, with little success). Consider that even at the height of the BP oil spill, with protests across the nation at local BP filling stations, a move from certain jobbers to return to the discarded Amoco name (which despite 7 or so years of inactivity still had serious cachet, particularly in the Southeast, in spite of BP foolishly dumping it) never gained traction. Or consider the current state of General Motors. Even with as much negative equity created from the current recall scandal, maintaining the GM brand, and individual car brands, still makes sense, because of their positions in the market. So to ditch Comcast for Xfinity shows how desperate Comcast was.

The Comcast branding issue is only a symptom of the relationship Comcast seems to have with most of its customers -- indifferent, and frankly at times combative.

Competitive retail energy isn't cable/broadband, which in most regions is still a monopoly service, and where, outside of a few major urban areas, customers wanting true high speed internet are left with their franchised cable provider, or getting by with speeds 10X slower with DSL or mobile broadband.

Not only are there going to be 30+ energy suppliers working to win Comcast's customers -- something it has never had to deal with -- energy customers (barring seismic shifts in market design) will have the ability to return to their incumbent provider/default service. Unlike in most regions, where cable/broadband customers wanting service must default to whoever has the single franchise, Comcast will be the new entrant in the retail energy space, fighting against the stodgy incumbent.

However, winning, and retaining, customers when you are not the incumbent takes a whole different approach and set of skills versus when you are the incumbent, where the only thing your retention department really has to worry about, since there are no viable alternatives, is having the customer reach their boiling point such that they simply cut the cord.

It's the latter attitude that gives us calls like this, as reported by WTOP-Washington DC:

Man records nightmarish attempt to cancel cable, Comcast apologizes

Essentially, it took a customer 18 minutes (per WTOP, the call ran for about 10 minutes prior to the recorded portion available on WTOP) to cancel Comcast service, with the CSR insisting on discussing the issue rather than completing the order.

Imagine if this happened with a customer seeking to cancel a retail supply contract, particularly in a post-vortex world.

Its calls like these which make us think the only viable play Comcast has in retail energy is to monetize its existing customer relationships by marketing the customer base to another company through a partnership/affinity agreement -- similar to what it is currently testing with NRG Energy. We simply cannot fathom Comcast's current culture working if it elected to be a full, load-serving retail supplier.

In Part 2 of our consideration of Comcast, coming soon, we will consider more issues, including greater regulator oversight in retail energy versus cable, and Comcast's pricing practices.