Cox Communications Extends High Speed Internet Program for Low-Income Families

A number of cable internet providers are launching programs to help low-income families have affordable access to high speed internet so that their children will not face educational disadvantages. One of these companies, Cox Communications, has extended its Connect2Compete program to the state of Virginia, offering high speed internet for $9.95 per month to qualifying families.

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Connect2Compete is a national not-for-profit initiative aimed at extending broadband access to families with children (K-12) participating in the National Free Lunch program, by offering discounted high-speed Internet service. Families that qualify will be eligible for high-speed Internet service for $9.95 per month, a free modem and free professional installation.

The expansion to Virginia follows a successful pilot of the program; the C2C program is modeled after a broadband adoption program Cox started in Santa Barbara, Calif., in 2002.  Cox announced its national rollout of the program in April.

“Cox has a strong history of supporting broadband adoption programs across the country, and doing so in a way that connects the most vulnerable members of our society – our children – so they can compete and have a greater chance of success in the digital world that awaits them,” said Cox Virginia SVP and GM Gary McCollum, in a statement.

“For years Cox Communications has been a tremendous partner to Fairfax County. With Connect 2Compete launching in Virginia, disadvantaged children and families will have the opportunity to connect to the internet and the world,” added Bulova.

Hopefully this will push other companies on Cox’s level, such as Time Warner and Charter Communications, to get involved with similar programs where they are the only cable internet provider. It will not only bring goodwill to the community, but increase their market share and ensure they will have loyal customers moving forward.

Charter Communications Stock Jumps More than 10%

Monday, a report in The Wall Street Journal indicated that Liberty Media, the company headed up by cable TV legend John Malone, plans to acquire 25% of Charter Communications, the leading cable TV provider in a number of major United States markets. The stake would be acquired for $2.5 billion, and news of the potential acquisition caused Charter’s stock to jump more than 10% by the time the markets closed on Monday.

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Charter shares soared on the news – the stock was up as  much as 10.5% ($9.49 per share) to $99.50 each in early Monday trading, settling down to close at $98.04 per share, up 8.8% or $7.95 each. Liberty Media shares closed at $110.66 per share, up 0.3% or 29 cents each.

Officials at Charter and Liberty each declined to comment.

If a deal is announced, it would be Liberty Media’s first foray into U.S. cable distribution since it was part of Tele-Communications Inc., more than two decades ago. TCI was sold in 1999 to AT&T for about $49 billion.

In a research note, Lazard Capital Markets media analyst Barton Crockett wrote that LIberty certainly has the financial firepower for the deal — he estimated the media giant has net cash of about $1.7 billion after the Starz spin and another $1.1 billion in investments in non-core publilcly traded securities that could be sold.

Crockett added the main positive for Liberty is that a deal would show it is putting its cash to work.

“We see rotating from cash and other investments, and into Charter, as having some advantages — Malone knows cable very well, so investors would likely be comfortable with him sticking to his wheelhouse,” Crockett wrote. “Such a move also would dampen speculation about where he will invest the cash horde at Liberty Media. Cash is earning very little now, so the hurdle rate of getting a better return on Charter stock, vs. sitting on cash earning almost nothing now, is low.”

It is not yet known what changes will result if this acquisition does occur, but we’ll keep you informed here at the TV, Internet and Phone Blog as soon as we know more.

AT&T: We Will Credit U-Verse Subscribers Affected by Outage

According to Multichannel News, AT&T U-Verse suffered an outage that knocked out cable TV and high speed internet service to around 6,000 subscribers in ten states. The outage resulted from a critical server failure; as a result, AT&T will extend credits to subscribers affected by the outage. The issue affected fewer than one percent of U-Verse subscribers.

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“We expect the remaining customer issues will be resolved this morning [Jan 25, 2013],” AT&T said in a statement. “We will provide a credit to customers who were affected. We know our customers count on their U-verse service and we apologize for the inconvenience.”

U-verse customers reported outages and sporadic problems starting Monday, Jan. 21, spanning markets in multiple states in the Southeast and Southwest including Texas, Florida, Oklahoma, North Carolina, Kentucky, Arkansas, Georgia, Tennessee, Alabama and Louisiana.

The issue ultimately affected less than 1% of U-verse subscribers, according to AT&T. As of the end of the third quarter of 2012, the telco had 7.4 million total U-verse subscribers (TV and high-speed Internet). The company is scheduled to report Q4 results after market close Thursday.

On Wednesday, an AT&T support representative posted in the telco’s online forum, “At this time, we’ve identified an issue with a server that supports U-verse. Some impacted customers may be able to restore service by powering down and restarting their Residential Gateway.”

The issue was related to “a software upgrade,” according to a post on the official U-verse Twitter account.

AT&T did not provide additional details on what the specific problem was, but reports suggested the outages stemmed from a Dynamic Host Configuration Protocol (DHCP) server failure. DHCP servers assign IP addresses to client devices that connect to a network.

According to comments posted on AT&T’s message boards, some U-verse customers lost service while neighbors with U-verse remained online.

Customers frustrated with AT&T U-Verse may want to consider other cable TV, satellite TV, or high speed internet providers.

Cable TV Management Software Provider Purchased by SintecMedia

According to a report from Multichannel News, the leading source of information for the cable television and satellite television trade, SintecMedia has acquired Argo Systems, a company that sells software to cable networks and pay TV operators for managing content distribution deals.

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Argo Systems’ customers include Comcast, Fox Cable Networks, Suddenlink Communications, AMC Networks, NBCUniversal, BBC America and A+E Networks UK. The Atlanta-based company says its software is used by more than 300 cable networks and operators worldwide.

For cable networks, Argo Systems’ Medea software provides a way to track affiliate revenue and distribution deals. On the other side of the chain, the company’s Nestor suite of applications lets pay TV operators manage programming contracts, budget and automate payments.

“SintecMedia’s acquisition of Argo Systems will further augment our local activities in the North American cable television and MSO markets,” SintecMedia CEO Amotz Yarden said in announcing the acquisition. “Argo Systems will increase SintecMedia’s footprint and capabilities, boost our U.S. presence in terms of local support including software engineers, technicians as well as other professionals and delivery resources that will enable us to supply a greater array of broadcast and digital media solutions.”

Added Argo Systems president Doug Calahan, “Merging with SintecMedia is a testament to our solutions’ strengths, opens new international markets and spurs further growth in North America.”

Privately held SintecMedia has 300 employees with offices in New York, Denver, London and Jerusalem, Israel. The company is backed by private equity firm Riverwood Capital. According to SintecMedia, 50 employees from Argo and another 40 from StorerTV are joining the company.

SintecMedia’s flagship OnAir software combines traffic, sales and programming management features for broadcasters. North American clients include NBCUniversal, ABC, CBC Canada and Televisa Mexico.

Argo was represented in the transaction by DecisionPoint, a mergers and acquisition advisor to middle-market technology companies.

More information as it becomes available from the TV, Internet and Phone Blog.

Time Warner Cable Withholds Metro Sports from Google Fiber Service in Kansas City

Time Warner has “backtracked from any willingness” to license its Metro Sports regional network, covering Kansas City regional sports, for use in the Google Fiber launch of cable television and ultra-high speed internet in the area. According to a Multichannel News report, the area’s major cable television provider is “leveraging its control over a local RSN (regional sports network) to impede Google Fiber’s entry into the marketplace.”

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Asked for a response, Time Warner Cable reps referred to the MSO’s statement on the issue last fall. In September, after a previous complaint by Google, the cable company said, “TWC has absolutely offered, and continues to offer, what the FCC describes as Metro Sports’ ‘must-have’ live regional sports programming — men’s and women’s Division I basketball — at fair and reasonable prices. As for the remaining programming on Metro Sports, we have long invested in local programming, and [Google is] welcome to do the same.”

Initially the cable operator “signaled a willingness to contract with Google Fiber for access to the Metro Sports network,” according to Google. “Ultimately, however, after delaying negotiations for months, TWC backtracked from any willingness to license its Metro Sports channel to Google Fiber.”

Google said that by contrast, it had successfully negotiated a license agreement with Fox Networks for its regional sports programming, including the Fox Sports Kansas City RSN.

“Because Google Fiber’s experience confirms the Commission’s understanding of lingering market conditions, Google Fiber supports the Commission’s proposals to strengthen the program access rules pertaining to RSNs,” the company said in the FCC filing.

In October 2012, the FCC voted to sunset the ban on exclusive contracts between pay TV providers and co-owned programming networks. Program access complaints will now be handled under the existing prohibition on unfair practices.

The FCC said in the order that “the potential for anticompetitive conduct resulting from vertical integration between cable operators and programmers remains a concern,” particularly with respect to RSNs, Google noted. Its comments are available here:

Programming on Metro Sports includes regional NCAA Division I college football and basketball games, as well as local high school football and basketball games and coaches shows. The RSN is available on TWC, Comcast and Knology of Kansas (formerly Sunflower Broadband) systems.

The Kansas City area follows closely the basketball teams of the University of Kansas and Kansas State, and not being able to see those games could be a dealbreaker for potential Google Fiber users. More on this story as it develops at the TV, Internet and Phone Blog.

It Was a Good Year to Invest in Cable TV and Satellite TV

According to Multichannel News, the leading source of information about the cable television and satellite television industry, it was a good year to invest in cable TV and satellite TV stocks. Barring a precipitous fall in the last week of the year, cable stocks across the board have had their best year since 2009, with MSOs up 41%, programmers up 38%, and satellite TV providers up 23%.

Here is some more information from the Multichannel News report:

Stocks of the four publicly traded MSOs — Cablevision Systems, Charter Communications, Comcast and Time Warner Cable — rose a combined 41% between Dec. 30, 2011 and Dec. 18, 2012. Comcast led the pack, with an increase of 60.5%. The other MSOs also enjoyed healthy increases: Time Warner Cable rose 51.4%, Charter was up 30.2% and Cablevision grew nearly 6%.

For the operators, it was a combination of strong performance (basic-video subscriber losses declined sharply at Comcast) and renewed optimism in the cable model.

Pivotal Research Group principal and media and communications analyst Jeff Wlodarczak said he attributes the bulk of the MSO gains this year on misplaced perceptions late in 2011 that cable operators had hit a growth wall.

“Instead, they have continued to take quite significant share in data, video subscriber losses have moderated, the telcos have mostly backed off expanding into new markets with video [and] the worries about over-the-top [players] have moderated significantly,” Wlodarczak said. He noted that operators also have returned capital to shareholders fairly aggressively and the outlook is for continued cash-flow growth.

Cable operators also managed to beat back competitive threats from telcos, satellite and so-called over-the-top providers such as Netflix.

Comcast reduced its basic-customer losses by 40% in 2011 and was on track to reduce those losses by at least another 25% in 2012. While most analysts anticipate that the cable sector will continue to lose customers as a whole in 2013, ISI Group media analysts Vijay Jayant and David Joyce expect that Comcast may cross into positive territory in the fourth quarter of 2012 and the first quarter of 2013.

“It’s important to highlight that fundamentals have been improving for the core business for the cable companies,” Joyce said in an interview. “Yes, broadband continues to take share, but also in this mature pay TV market in the U.S., satellite and telcos are starting to experience the same sort of seasonality that cable has been experiencing for a while.”

On the programming side, a renewed optimism regarding the advertising market and the overall economy, with a little M&A speculation sprinkled in, has helped push up shares in the sector by nearly 38% so far this year, led by Discovery Communications. Discovery, which has reported consistent high single-digit domestic advertising revenue growth for the first nine months of the year, saw its stock rise 55.3% ($22.64 each) to $63.61 on Dec. 18, from $40.97 on Dec. 30, 2011.

Check back often to see the most thorough collection of news about the cable TV industry and the satellite television industry here at the TV, Internet and Phone Blog.

Hulu Now Has More Than 3 Million Paid Subscribers

Hulu, the online streaming service, will close out 2012 with more than three million paid subscribers for its Hulu Plus service and will pull in about $695 million in revenue, according to Hulu CEO Jason Kilar, as reported by Multichannel News. As a result, Hulu is positioning itself as a major threat to traditional paid cable television and satellite television services.

According to Multichannel News:

The privately held company is at “the crest of two massive waves that we believe will persist for the long term: the rise of online video advertising and the rise of online video subscription services,” Kilar wrote in a blog post Monday.

Hulu Plus, which costs $7.99 per month, provides access to current-season shows and older series from networks including ABC, NBC and Fox, with past seasons of CBS shows set to be added to the service in January. Hulu Plus is the only online video subscription service with current-season content from Nickelodeon.

The Internet video site is owned by NBCUniversal, News Corp. and The Walt Disney Corp. Last year, Hulu’s owners had been in discussions about selling the company. Those reportedly in talks about a possible deal included Google, Yahoo, Microsoft, AT&T, Verizon Communications and

In 2012 Hulu’s revenue will have grown by more than 65%, up from $420 million last year, which is “an acceleration over 2011 growth levels,” Kilar noted. In 2012, Hulu served more than 1,000 advertisers, 28% more than in 2011. Kilar said the company charges advertisers only when their ads have been streamed through completion.

Over the course of the year, Hulu and Hulu Plus title offerings grew 40% and the company invested more than $500 million in content acquisition, having launched more than 25 exclusive and original series and signed new agreements with media companies including CBS and WWE, according to Kilar.

Hulu now has more than 430 content partners, providing 60,000-plus TV episodes, 2,300 TV series and 50,000 hours of video. Since Hulu launched in October 2007, “we have generated over $1 billion for our content partners,” Kilar wrote.

The Hulu Plus subscription service is available across a range of devices, including game consoles, connected TVs and Blu-ray players, tablets and smartphones.

Check back often to learn more about how other online services are cutting into the business of traditional cable and satellite providers here at the TV, Internet and Phone Blog.