CSG, Comcast reach armistice agreement in billing war
CSG Systems and Comcast Corp. have apparently brokered a peace deal, ending a longstanding legal war over a contract that dates back to the former AT&T Broadband.
Under the new contract, Englewood, Colo.-based CSG will provide customer care and billing services for Comcast video and high-speed Internet users through 2008 - effectively shaving four years off the original 15-year agreement signed in 1997. CSG also loses its exclusive right to provide customer care for 13 million video and Internet subscribers Comcast inherited from the former AT&T Broadband, and it has agreed to a lowered service pricing structure. The new contract also guarantees CSG minimum payments totaling $220 million during three of the five contract years, with a proviso that if Comcast chooses to end the contract before 2008, CSG will be paid the balance.
The battle over the billing contract was already under way under AT&T Broadband's watch, and at the time Comcast acquired the MSO in November 2002, the two sides were already in a second round of arbitration. After the merger with AT&T Broadband, Comcast filed suit, arguing it should not be held to the 15-year contract and that a new one should be forged.
After even more filings and motions fired between the two during the past year-and-a-half, that appears to have occurred. Both sides are saying the agreement is a positive step.
"With this agreement, we enter a new era of cooperation between our two companies," said Dave Richardson, Comcast's senior vice president of administration, in a release. "We are committed to delivering the highest quality products and services to our customers and we're pleased that CSG will be a part of helping us achieve those goals."
CSG, meanwhile, is looking forward to a new working relationship with the nation's largest MSO, according to Ed Nafus, president of CSG's broadband services division.
"We have worked very hard to earn Comcast's business after a tumultuous beginning to our relationship," he said in a release. "We are delighted to have the opportunity to work with Comcast on its current and future initiatives."
In a separate announcement, CSG has revised its financial guidance for 2004 downward to reflect the new, shorter Comcast contract. The revision calls for an increased amortization of the contract's value by $5 million this year, which will be recorded as a loss of revenue.