Broadband Cable Association of Pennsylvania


May 17, 2013

Time Warner Cable Inc., the second-largest U.S. cable-TV provider, is considering taking an equity stake in online-video site Hulu LLC, according to people with knowledge of the situation. Discussions are at an early stage and a transaction isn't certain, said the people, who asked not to be identified because the talks are private. Another pay-TV company is also weighing a Hulu bid, said one of the people.

A deal would make New York-based Time Warner Cable a co-owner with Walt Disney Co., News Corp. and Comcast Corp., which each hold about a one-third stake, said the people. Time Warner Cable could offer Hulu to its customers as a bundled service inside and outside of the home with its current products, one of the people said. The company is focusing more on its broadband business as traditional pay-TV growth stalls. Ownership in Hulu would open the door to more ad revenue at Time Warner Cable and, eventually, could help the cable company transcend regional limits to its growth. Hulu also would potentially improve the company's access to local advertisers, a group it has targeted. "Hulu's a great asset," said Rich Greenfield, an analyst with BTIG LLC in New York. "Conditions like a national footprint will seem silly 10 years from now." Meredith Kendall, a spokeswoman for Los Angeles-based Hulu, declined to comment, as did Justin Venech at Time Warner Cable.

Having its cable rival as a partner could also allow Philadelphia-based Comcast, the biggest cable-TV service, to piggyback on any deals Time Warner Cable makes with Hulu. Comcast agreed not to make management decisions at Hulu as part of its January 2011 purchase of NBC Universal. Hulu, which surpassed 4 million paid customers for its $7.99-a-month service in the first quarter, is seeking to double the number of advertisers this year as it targets local businesses, Jean-Paul Colaco, senior vice president of advertising, said this month. "It's the best brand for streaming television," David Bank, an analyst at RBC Capital Markets in New York, said in an interview. He said ownership of Hulu would help Time Warner Cable control online distribution of video. Time Warner Cable fell 2 percent to $97.22 at the close in New York. The shares are little changed this year.

Hulu's board reached out to potential strategic buyers, people with knowledge of the situation said in March. Its controlling owners, Burbank, California-based Disney and Rupert Murdoch's New York-based News Corp., disagree on Hulu's future direction and discussed one partner buying out the other's stake, people said in March. Former News Corp. Chief Operating Officer Peter Chernin, who helped found Hulu, offered at least $500 million, people with knowledge of the situation said last month. Yahoo! Inc. Chief Executive Officer Marissa Mayer met with senior executives of the online television service, people said this month. Inc. and Guggenheim Partners LLC have also expressed interest, people familiar with the situation have said. Dow Jones reported Time Warner Cable's interest earlier. Bloomberg

Comcast will increase staffing and weekend hours at its service centers at the Jersey Shore, preparing for customers heading to the beach for the summer. The Philadelphia cable company said it has upgraded 144 miles of infrastructure in Jersey Shore communities hit by Hurricane Sandy in October, as well as renovating its own service centers in Avalon, Long Beach Island and Pleasantville. Comcast continues to operate temporary trailers in Ocean City, where its service center was destroyed in the storm. Starting May 25, more than 170 additional technicians will be on hand to maintain and improve the network, perform installations and fix lines that might still be affected by the storm. Jersey Shore customers will be among the first in the state to receive Comcast's new cloud-based X1 Platform, its new Wireless Gateway and the Xfinity Home monitoring service. Customers who want to reconnect their Comcast service can call 1-800-2SUMMER. Bucks County Courier Times

Atlanta development officials said Thursday they are considering ultra-high-speed Internet service as a way to attract businesses to the loop of trails and planned transit known as the Atlanta Beltline. Invest Atlanta is considering the prospects, and cost, for adding advanced fiber optic cable-based Internet service to the 22-mile loop around the city, said Eloisa Klementich, the agency's managing director for business development. The cable could be buried beneath the trails and planned transit routes, where infrastructure upgrades have placed utilities underground. Many cities including Chattanooga, Seattle and Kansas City have or are developing "gigabit" Internet infrastructure, which can move data many times faster than current high-speed service, in a bid to attract high-tech business. Klementich said the move could buoy redevelopment and attract business throughout the Beltline. Stockbridge and the Avalon mixed-use project in Alpharetta have both has announced plans for similar Internet service. Atlanta Journal-Constitution