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Study shows economic impact of cable industry

By Johnny Diaz
Globe Staff / October 5, 2011

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The cable industry in Massachusetts contributed nearly $3.5 billion to the state’s economy and increased employment by 30 percent between 2006 and 2010, according to a study sponsored by an industry group.

“We knew that we had been hiring people and investing billions of dollars in the infrastructure,’’ said Paul Cianelli, president and chief executive of the New England Cable & Telecommunications Association, which sponsored the study. “We decided it was a story that had to be told.’’

However, the study did not include figures from any cable companies that do not belong to the association. Verizon Corp., the second-largest cable carrier in the state, RCN Corp. , and local municipal cable operators such as those in Braintree, Norwood, Russell, and Shrewsbury are not members of the association, and did not participate in the study.

Including its landline telephone business, Verizon has cut its Massachusetts workforce by more than half since 2006, from 23,000 to 11,000 employees.

Member companies that participated in the study, conducted by the University of Massachusetts Donahue Institute, included Comcast Corp. - the largest cable provider in the state - Cox Communications Inc., Charter Communications Inc., and Time Warner Cable . Together, those four operators served 1.8 million of the 2.1 million cable subscribers in Massachusetts last year; Comcast served 1.5 million of those subscribers, and Verizon served 280,000, according to the association.

“The sample size [of the study] is 84 percent of the total cable subscribers in the Commonwealth,’’ Cianelli said, “which I think is a more than accurate sample number.’’

Bruce Leichtman, a cable industry analyst based in New Hampshire, said there’s is a reason why there has been job growth in the local cable industry: Verizon.

“Competition from [Verizon’s FiOS cable network] has helped spur new product lines, more penetration of resident phone lines, and the Internet,’’ said Leichtman. “Those four major providers [in the study] are competing with Verizon.’’

Martin Romitti, director of economy and policy research at the Donahue Institute, said the report aimed to show the economic contributions of association members, which are “very much focused on your televised programming and high-speed Internet’’ services.

“Verizon is a way different animal; a multiheaded animal,’’ Romitti said. “It’s a cable provider, but it’s so much more than that.’’

Verizon has contributed to the state’s economy, although it shed employees during the period covered by the study because of its declining landline telephone business, said company spokesman Phil Santoro. Verizon employees work on landline, cellphone, Internet, and TV services, he said.

Like the association member companies, “we are growing the cable TV portion of the business. We are also growing the wireless portion of the business,’’ Santoro wrote in an e-mail.

In regards to Verizon’s cable business, Cianelli said, “I would think that the same significant growth figures would apply to them, particularly with FiOS, which has grown significantly in the last five years.’’

Johnny Diaz can be reached at jodiaz@globe.com.