The Ohio PUC allowed Champaign Telephone to become the first of the state’s 38 small incumbent telcos to shift from rate-of-return regulation to an alternative price-based program. The company agreed to freeze basic exchange and basic caller ID rates for the program’s life, and to cap rates for 2nd residential lines, call waiting and certain specialty business services for 24 months. After that, rates for these services can rise up to an absolute cap set at double current rates. Rates for all other retail services are deregulated. The PUC (Case 06-651-TP-ALT) dismissed Office of Consumer Counsel objections that competition in Champaign’s service area is insufficient to warrant regulatory relaxation.
U.S. Cellular and 81% owner TDS are using consolidation strategies like those of the Bells, mixed with rural expansion, to grow out of small service territories despite limited resources, said executives speaking Tues. at the Deutsche Bank Media & Telecom Conference in Santa Clara, Cal. Acknowledging that the regulatory system limits even big independents’ reach, the companies said they've substantially increased profitability by gradually adding adjacent territories and keeping users on their networks more of the time.
CBS wants to sell 38 radio stations in 10 of its smaller markets -- Austin, Buffalo, Cincinnati, Columbus, Fresno, Greensboro, Kansas City, Memphis, Rochester and San Antonio - - the company said. CEO Les Moonves said during the company’s Q1 earnings teleconference that CBS wants to exit some smaller and underperforming markets (CD April 27 p18).
A federal judge put FCC attorney John Ingle in the hot seat Mon., demanding to know where the FCC got the “impairment standard” it used to limit unbundled access to high-capacity loops and transport in a Feb. 2005 order (CD Feb 7 p1). At issue in an oral argument before the U.S. Appeals Court, D.C., was an FCC decision to limit competitor access to the Bells’ high-capacity facilities based on results of a test to gauge if competitors would be “impaired” without such access.
Liberty Global can grow revenue by pushing bundled services overseas where only 9.1% of the company’s customers take VoIP, broadband and video, said Miller Tabak analyst David Joyce. The company said it added 437,000 revenue generating units (RGUs) during the quarter, excluding 80,000 RGUs acquired from INODE in Austria and beating many analysts’ forecasts. Revenue increased 38% from last year to $1.63 billion. Liberty Global’s total current assets grew 27% to $2.9 billion from a year ago. Net earnings reached $268.2 million last quarter from $16.5 million a year earlier on the sale of $223.1 million in assets in Q1.
A Cablevision test of switched video service for foreign language speakers succeeded and the service is ready for full deployment this year, said COO Tom Rutledge. The service, $5 a month for expanded basic cable subscribers, will offer 30- 60 more Spanish-language channels. Basic cable subscribers would pay $15 monthly for the service.
Belo will cut annual capital spending 38% to $75 million next year through 2009, it said. This year’s expenditures will be “somewhat less” than a previous target of $120 million, said Belo. It boosted the annual dividend 1/4 to cents50 a share.
AT&T won victories in Conn. and Okla. in efforts to escape local franchising requirements for its IP-based video services. Conn. regulators and the Okla. Attorney General concluded AT&T doesn’t need to obtain video franchises to provide Internet-based video services over its phone lines in their states.
U.S. broadband subscribership will grow faster this year than in 2005, with cable operators adding more customers last quarter than expected, wrote UBS analyst Aryeh Bourkoff. In Q1, cable and telco firms added more than 3 million users, up 15% from a year ago, Bourkoff said: “The U.S. looks set to have a record quarter for new broadband subscribers… Cable modem net adds provided the upside surprise.” Last quarter, Time Warner Cable signed up a record 346,000 new broadband customers (CD May 4 p17). As of March 31, 4 residences in 10 had fast Internet access, versus 38% at year’s end, said Bourkoff. He predicted growth of 10 million customers in 2006, up 4.2% from last year’s additions.
DirecTV CEO Chase Carey appeared to move away Thurs. from News Corp. CEO Rupert Murdoch’s comments that the satellite operator would have a clear plan for broadband by spring (CD Jan 10 p2), maintaining that broadband-enabled satellite receivers won’t be available until late this year. DirecTV is continuing to have discussions with RBOCs and other providers regarding wireless broadband and DSL to determine the opportunities “that we can take advantage of,” he said.