FCC granted conditional approval for $47.5 billion merger of AT&T and Comcast, nation’s first- and 3rd-largest cable companies. Merged company would have 27.02 million subscribers -- 28.9% of all U.S. multichannel video programming distributor (MVPD) customers in 41 states. However, public interest groups immediately said they would take decision to court.
Revenue of Big 3 TV networks for 3rd quarter increased 7% over same period last year, Bcst. Cable Financial Management Assn. (BCFM) said, based on data supplied by Ernst & Young. Combined, ABC, NBC and CBS had net revenue of $2.01 billion from time sales for quarter, up from $1.87 billion. Largest increase was in sports programming, up more than $90 million (31.6%), primarily because of canceled telecasts following Sept. 11, 2001, terrorist attacks, BCFM said. Largest revenue decrease was in news -- down more than $38 million (22.5%).
DBS market share has leveled out at 25% of premium TV users, Solomon Wolff Study said. Cable TV continues to dominate pay-TV market with 75% of households and market penetration is increasing. DBS “growth has waned,” Solomon- Wolff partner Joey Wolff said: “Cable TV services are now having more success in holding customers, getting new premium TV customers and getting back some who had switched to satellite TV.” DBS still holds edge in customer satisfaction, study said. Total of 34% of DBS subscribers are satisfied with service compared with 22% for cable. DirecTV has highest satisfaction level in DBS market with 38% and Cox leads among cable operators with 29%. Solomon-Wolff used data from 6,800 participants from 250,000 Internet users that completed survey form on company Web site.
Charter said 3rd-quarter revenue rose 13% to $1.18 billion and operating cash flow 9% to $497 million. It said gains resulted primarily from increased digital video and high-speed data customers as well as higher customer prices, offset partly by decline in analog video customers. Charter, which last month placed its COO on paid leave following federal investigation into accounting practices, said it was consulting with its auditors, KPMG, to evaluate accounting for deferred tax liabilities relating to certain 1999 acquisitions. “After recording this additional liability, adjustments to income tax expense in certain subsequent periods could be required,” it said. However, tax issue doesn’t affect company’s previously reported revenue, operating cash flow or current or past cash obligations, Charter said, so it’s not expected to have any cash impact. Company said its broadband network now passed 12 million homes and it added 211,000 subscribers in quarter, fueled by continued demand for digital and high-speed data service. It ended 3rd quarter with 2.52 million digital customers making up 38% of its video user base. High-speed customers totaled 1 million -- 12% of data homes passed. Charter said it expected revenue to increase 8% and cash flow 4%-5% in 4th quarter and for full year gains of 12% in revenue and 10% in annual cash flow. It said it expected to add 300,000 subscribers in 4th quarter to rise total additions to 900,000.
Winstar raised concerns in FCC filing that proposed changes were in play at ITU would “overturn or weaken” resolution approved at World Radio Conference (WRC) 2000 for 38 GHz band. Parts of 37.5-43.5 GHz are allocated to fixed service, fixed satellite service (FSS), broadcasting satellite service (BSS) and mobile satellite service (MSS) on co-primary basis. At WRC 200l, adopted changes included provisional power limits for geostationary and nongeostationary satellites in FSS, BSS and MSS operations in band. WRC 2000 agreements also called for study of techniques to address interference from fixed service transmitters into earth station receivers in high-density applications in FSS at 39.5-40 GHz and 40.5-42 GHz. In recent filing at FCC, Winstar urged that satellite systems at 38.6-40 GHz be limited to provisional power limits adopted at WRC 2000. That would permit fixed service licensees such as Winstar in that band “to have the stability they need to focus on the operation, funding and growth of their services to the public,” filing said. To reach its service objectives, Winstar said FSS satellites at 38 GHz must be kept to low-power operations and earth station deployment must be limited “to just a handful of large gateway type terminals.” Winstar said this month at preparatory meeting for WRC 2003 conference that ITU-Radiocomm sector was set to approve report on technical issues that emerged from WRC 2000 agenda item. “The satellite community has regrouped and has launched a strong counteroffensive to overturn or weaken the WRC 2000 decisions at the WRC 2003 conference,” Winstar warned: “France and Germany are leading the European effort to do the same.” Winstar acknowledged it had lost “valuable time” in engaging in that debate as result of its Chapter 11 bankruptcy filing last year. (Company emerged from Ch. 11 protection in Dec.). Winstar said its objectives for WRC 2003 included: (1) Working with U.S. and “friendly” administrations such as Japan and Canada to get WRC 2003 to adopt decisions that wouldn’t introduce harmful interference into high-density fixed service operations in 38.6-40 GHz. (2) Ensuring that FSS satellites weren’t allowed to increase power during rain fade conditions if satellite beams covered licensed area of high-density fixed service operators “without prior approval.” (3) Developing coordination procedures that would protect needs of high-density fixed service networks and area-wide licenses.
Responding to last-min. questions on proposed merger of AT&T Broadband and Comcast, officials of 2 companies disclosed that AOL would get comparable high-speed cable carriage whether or not merger is approved. Revelation came in one-page letter to FCC dated Mon. In recent days, FCC’s Office of Gen. Counsel has been trying to decide whether Commission should grant motion by consumer groups imploring commissioners to examine terms and conditions of AOL high- speed access agreement made with what would be combined AT&T Comcast.
Hoping to win back affection of Wall St., CEOs of 11 publicly traded cable MSOs pledged Mon. to adhere to new standards in reporting their operating metrics. Group, led by NCTA Chmn. Michael Willner, CEO of Insight Communications, stressed that measures were voluntary and that pledge wasn’t intended to supplant SEC reporting requirements of individual companies or alter their responsibilities or those of their accountants. None of companies said they would restate earnings or otherwise change what they had reported in previous quarters or years, but instead would adopt new metrics from this point on. Pledge calls for companies to adopt new accounting standards by first quarter next year, although some said they would do so as early as 3rd quarter 2002. Noticeably absent from N.Y.C. press conference was Adelphia CEO Erland Kailbourne, whose company was plunged into bankruptcy as former CEO John Rigas and his sons were indicted on federal charges that they had bilked company of billions of dollars. Kailbourne nevertheless signed pledge. NCTA spokesman said Kailbourne was among several CEOs who had scheduling conflicts.
N.Y. Times Co. broadcast and digital revenue in 3rd quarter was “ahead of our expectations,” company said, contributing to revenue increase of 4.7% to $729.5 million. Earnings per share were 38 cents, matching estimate.
AT&T Broadband and Comcast said 1,700 AT&T Broadband jobs at company’s hq in Colo. were expected to be eliminated following transition period after companies’ planned merger. Companies said in joint statement that affected positions primarily would be at executive and management levels. They also announced that 4,000 (70%) AT&T Broadband jobs in Colo. would remain in state after merger. Companies on Wed. began formally notifying initial group of 675 AT&T Broadband employees that their positions would be eliminated when merger closed. Rest of expected layoffs at AT&T Broadband hq will take place during postmerger transition period, companies said, and all employees will be given severance, extended benefit coverage, outplacement support. AT&T Broadband’s 2,000 Denver field employees, responsible for customer service and local cable operations, are unaffected by announcement. Also unaffected are 3 major AT&T Broadband facilities in Denver area -- AT&T’s Digital Media Centers, company’s Network Operations Center, customer service center. AT&T Broadband has 40,000 employees and Comcast has 38,000, including 20,000 in Cable Div. AT&T Broadband and Comcast are awaiting regulatory approvals of their merger, which they expect will close in 4th quarter.
Although TV network reality series have become “mainstream” entertainment it doesn’t mean “they've also become family friendly,” Parents TV Council said in report. “Too often, these series become a thinly veiled excuse for encouraging the contestants’ reckless, irresponsible or just plain stupid behavior,” Council said. Study, conducted Jan. 2001-May 2002, examined first 4 series of 38 (25 broadcast, 13 cable) reality programs for total of 125.5 hours. “Offensive content” was more than 3 times as frequent on cable series than on broadcast TV, Council said. On TV, NBC and UPN series contained “the highest level of offensive content,” Council said, with VH1 and MTV leading in that category on cable. There were 29.4 instances of objectionable sex, foul language and/or violence per hour on cable reality series, 9.5 such instances per hour on broadcast TV.