Broadband Cable Association of Pennsylvania

NewsClips

August 3, 2012

PCN's 65-minute interview with Joe and Irene Gans, recorded in 2001, will be repeated this Sunday, August 5, at 2:00 pm on the network.


The two largest cable operators are looking to an unlikely source of inspiration: Google Fiber, their newest formidable competitor.

Time Warner Cable Inc. Chief Executive Glenn Britt and Comcast Corp. Chief Executive Brian Roberts separately said this week they see Google Inc.'s nascent one-gigabit communications network in Kansas City as a "laboratory" for encouraging new Internet services that will drive the adoption of faster broadband tiers-ultimately benefiting their own businesses too. Mr. Britt's comments came as Time Warner Cable posted an 8% gain in second-quarter profit, largely driven by growth in its broadband business that offset losses of cable-TV subscribers. Responding to softness in its video business, Time Warner Cable has focused on marketing its broadband without the expensive TV product attached. The company said Thursday the number of customers subscribing only to broadband-without cable TV and voice-increased 28%, from a year earlier.

On a conference call with analysts Thursday, Mr. Britt described Google's service as exploring "what we could do as a society with more bandwidth," which is "a good thing, not a bad thing" for business. "We are constantly hoping that new applications and needs develop" for broadband, Comcast's Mr. Roberts said Wednesday as the largest cable operator reported higher second-quarter profits, also driven by broadband adoption. It will be a "positive development if we can help that happen and if Google can be part of making that happen," he said. At a time of slowing growth in the video business due to a mature pay-TV market and fierce competition from phone and satellite companies, broadband has become the main engine of growth for cable companies.

Broadband is a high-margin business compared to video, where profits are squeezed by the ever-increasing programming costs cable operators must pay entertainment companies in order to carry their TV channels. The company's video revenue was down 1% from the year-ago quarter, while broadband revenue was up 7.2%. Overall revenue increased 3% to $5 billion, excluding the impact of Time Warner Cable's recent acquisitions of Insight Communications and some other businesses. Time Warner Cable lost 169,000 video customers, worse than the 130,000 it lost in the same quarter last year. The company's video revenue was down 1% a year earlier while broadband revenue was up 7.2%. Overall revenue increased 3% to $5 billion, excluding the impact of Time Warner Cable's recent acquisitions of Insight Communications and some other businesses.

As part of its marketing to customers who have a "broadband bias," Time Warner Cable offers a $99.99 package of its fastest Internet tier-with download speeds up to 50 megabits-per-second-alongside its bare-bones TV offering called "TV Essentials," which doesn't include more expensive channels like Walt Disney Co.'s ESPN. The company said that now, 21% of Time Warner Cable's broadband customers subscribe to higher-speed tiers of service, up from 9% just three years ago. Time Warner Cable reported a profit of $452 million, or $1.43 a share, up from a year-earlier profit $420 million, or $1.24 a share. Excluding items such as restructuring costs, earnings were $1.48, up from $1.20 a year earlier. Wall Street Journal


Time Warner Cable Inc.'s second-quarter profit rose 7.6% as the cable provider's revenue was boosted by growth in its high-speed services segment, but the company continued to lose video subscribers. Time Warner Cable, the second-largest U.S. cable television provider behind Comcast Corp., has struggled alongside other cable providers against television networks as disputes over programming costs have caused rounds of blackouts for consumers.

Cable providers claim the programmer's fee increases are excessive and lead to higher prices for customers, while networks maintain they are only asking for a fair deal. Time Warner Cable has also faced a flow of residential customers abandoning its video services. The company has focused more attention on its broadband business, where profit margins remain higher.

Time Warner Cable reported a profit of $452 million, or $1.43 a share, up from a year-earlier profit $420 million, or $1.24 a share. Excluding items such as restructuring costs, earnings were $1.48 a share, up from $1.20 a year earlier. Revenue rose 9.3% to $5.4 billion. Analysts surveyed by Thomson Reuters recently expected a profit of $1.39 a share on revenue of $5.4 billion. Revenue also benefited from the acquisitions of Insight Communications Co., the NewWave Communications cable systems and NaviSite Inc. Operating margin narrowed to 21.1% from 21.5%. Video programming expenses grew 5.9% to $1.2 billion.

The company added 59,000 residential high-speed data subscriptions and 45,000 voice subscriptions, excluding acquired customers. The company reported a 169,000 net decline in residential video subscribers. Revenue from residential customers increased 7.4% to $4.62 billion, driven by a 14% increase in high-speed data revenue. Business services revenue rose 29% to $464 million. Advertising revenue improved 18%, while other revenue was flat at $58 million. Wall Street Journal

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