DBRS Changes Comcast Corp. and Comcast Holdings Trend to Pos

Dominion Bond Rating Service (“DBRS”) has today changed the trends on the Senior Unsecured Notes and Debentures of Comcast Corporation (“Comcast” or the “Company”), the Senior Unsecured Notes of certain wholly owned subsidiaries, and the Senior Subordinated Debentures of Comcast Holdings Corporation to Positive from Stable. Furthermore, DBRS has assigned an R-2 (high) rating to the Company’s US$2.25 billion commercial paper program with a Stable trend.

The revised trends reflect Comcast’s success in improving cash flow from operations in an intense, competitive market and in reducing debt since the acquisition of AT&T Broadband in late 2002. DBRS notes the investment-grade ratings remain firmly supported by: (1) Comcast’s focus on retaining customers through continually adding/enhancing new products/services by means of leveraging the capabilities of its fully upgraded two-way network; (2) the Company’s position as the largest incumbent cable provider in the U.S. with 21.5 million subscribers; and (3) strong key credit metrics.

Competition remains intense with telco and satellite operators competing for high-speed Internet and video subscribers, respectively. In addition, telcos are preparing to launch video services in 2005/2006 over their infrastructure, which will compete head-to-head with cable operators. To counter these threats, Comcast has responded by aggressively bundling other services (e.g. high-speed Internet and digital) and through constant product enhancement (e.g. focus on video-on-demand, digital video recorders with TiVo service coming in 2006, and high-definition television), which is difficult for competitors to duplicate all at once. In addition, Comcast has begun launching IP telephony on a market-by-market basis, expected to represent one-third of homes, passed by the end of 2005 with the balance in 2006.

Overall, Comcast has successfully reduced financial risk and is now well-positioned to drive future cash flow through its “triple play” (voice, video, and data) bundle of services. Comcast would benefit by adding wireless to its service offering for the “quadruple play”. With anticipated improvement in key credit ratios, DBRS believes a rating increase is likely.

Note:
p - This rating is based on public information.