Virgin Media added 171,900 TiVo customers in Q1, increasing the DVR service’s penetration to 40 percent of its installed base and helping stem the loss of pay-TV customers, the company said. Virgin ended Q1 with 1.5 million TiVo subscribers, a “slight” majority of which are new to the cable service, CEO Neil Burkett said on an earnings call. TiVo had 35 percent Virgin penetration in Q4. Virgin’s pay-TV churn improved to 1.1 percent from 1.2 percent the previous quarter. Virgin’s pay-TV customers increased by 13,700 to 3.3 million, Virgin said. Virgin’s cable broadband customers grew to 4.3 million in Q1 from 4.14 million the same quarter a year earlier, with 58 percent taking service with 30 Mbps and faster speeds, the company said. As Virgin promotes TiVo and moves some features to the cloud for use in its TV Everywhere service, it’s cutting back its free TV service tier. Virgin’s Q1 net income grew to $212 million as total revenue increased 3.6 percent to $1.59 billion. Selling, general and administrative expenses rose 1.8 percent from a year earlier, mainly on the $12.2 million spent on its proposed sale to Liberty Global. Liberty and Virgin haven’t set a closing date on the sale. Virgin is “continuing to have conversations” with Liberty and “we're starting to understand each other more,” Burkett said on the earnings call.
The FCC’s Technology Transitions Policy Task Force learned “many significant things” at its first workshop last month, FCC General Counsel Sean Lev wrote in a blog entry Wednesday (http://fcc.us/13vfk8d). Emerging technologies such as MegaMIMO have the potential to stitch together overlapping wireless cells to increase data speeds, Lev said, and existing copper wires can provide “significantly higher speed” services using VDSL2 technology. Broadband adoption patterns vary significantly by demographics, with rural uptake lagging behind urban by 10 percent, he said. “Economic necessity alone, not regulation, will require providers to support both existing legacy technologies and new ones for a significant time,” Lev said. “Providers aren’t retiring all their legacy equipment immediately -- instead, they are generally swapping out individual pieces of equipment on independent timescales.” Wireline providers will generally keep using copper and time-division multiplex services for up to the next 10 years, which is “important to know as we consider the proper regulatory response,” Lev said.
The FCC granted two petitions from Comcast Wednesday to be excluded from municipal rate-setting for basic-video and some other prices in several Minnesota communities. One petition requested deregulation in nine communities, the other in six. In both Media Bureau petitions, Comcast cited video competition from DirecTV and Dish Network. Objections were filed to both petitions by local regulators: The Ramsey/Washington Counties Suburban Cable Communications Commission to the first, and the North Metro Telecommunications Commission to the second. The orders said that both regulators challenged the way Comcast’s numerical data showing households using competing services was derived, but their objections were rejected by the bureau. However, Comcast did withdraw its petitions for some of the communities where it had originally applied for an effective competition ruling, reducing one petition from nine to six and the other from six to five. The deregulation orders will affect just under of 55,000 households in the towns of Grant, Lake Elmo, North St. Paul, Oakdale, Vadnais Heights, Blaine, Centerville, Circle Pines, Ham Lake, Lino Lakes and Spring Lake Park. Time Warner Cable meanwhile petitioned for a similar bureau finding in 21 New York communities, in filings posted in FCC docket 12-1 (http://bit.ly/Y4UgXU). The petition cited video competition from DirecTV, Dish Network and Verizon. The proposed deregulation would affect about 105,000 households total in the towns of Baldwinsville, Camillus, Cicero, Clay, DeRuyter, East Syracuse, Fayetteville, Geddes, Granby, Hannibal, Liverpool, Lysander, New Haven, North Syracuse, Port Byron, Salina, Schroeppel, Solvay, Van Buren, Volney and Walcott.
The Trans-Pacific Partnership Agreement needs to have strong intellectual protections without carveouts, U.S. Chamber of Commerce Global Intellectual Property Center CEO David Hirschmann told the Senate Finance Committee during a Wednesday hearing on the trade agreement. It’s important that U.S. negotiators ensure that the agreement protects IP, which “generates jobs, stimulates innovation, ensures consumer safety and, probably not as well understood, … ensures that we are able to take new, innovative products to markets around the world,” he said. “Some countries are moving in the wrong direction,” he said, citing “recent negative trends, for example, in India.” The agreement should have strong protections without exceptions proposed by other countries, he continued. “If you don’t move forward, you are indeed falling back. Technology changes."
Representatives of T-Mobile, widely viewed as a likely bidder in the pending incentive auction of broadcast TV spectrum, discussed bidding mechanisms during the auction with top FCC officials, including Wireless Bureau Chief Ruth Milkman and Gary Epstein, head of the agency’s Incentive Auction Task Force. T-Mobile was represented in part by Gregory Rosston, deputy director of the Stanford Institute for Economic Policy Research. “T-Mobile discussed the possibility of using a bid withdrawal mechanism in lieu of package bidding to solve the risk of geographic exposure,” said a filing on the meeting (http://bit.ly/11DRTIM). “In response to the observation that allowing bid withdrawals could create a risk for strategic behavior, T-Mobile’s representatives suggested that the Commission could impose a nominal fee for withdrawal where the withdrawing bidder might pay some fraction of the price bid. T-Mobile’s representatives also discussed nationwide bids or pre-set population minimums as a possible solution to the complexity of package bidding.”
Moody’s raised Intelsat’s corporate family rating to B3 from Caa1. The rating action concludes a review initiated April 2 when Intelsat’s parent company, Intelsat S.A., “announced an equity issue with most of the proceeds reducing debt at Intelsat and its subsidiaries,” Moody’s said (http://bit.ly/ZrV9cM). “With the review concluded, Intelsat’s ratings outlook was changed to stable.” The satellite company’s speculative grade liquidity rating was affirmed at SGL-2, an assessment that relies on about $387 million of net insurance proceeds from Intelsat 27, “customer pre-payments exceeding non-cash deferred revenues by $100 million,” and other factors, it said.
Selling data and voice service to companies “is the cable industry’s largest growth opportunity,” as “broadband growth will wane as broadband penetration (currently around 78 percent) in the US approaches full capacity,” Moody’s analysts wrote investors Tuesday. They said “some growth will continue over the medium-term as cable takes share from telco DSL connections” and that the pay-TV business has reached “maturation.” The debt-ratings agency expects cable system consolidation, because current holdings are “often inefficient or insufficient to serve multi-location commercial customers compared to most telecom competitors.” Time Warner Cable “particularly” and Comcast also may buy systems, “but given their considerable scale they will likely focus on swaps and portfolio rationalization,” Moody’s said. Mid-sized operators like Charter Communications and Cox Communications “stand to benefit the most from consolidation,” the report said: “While they are spread over numerous states,” such companies “have low average footprint penetration, suggesting that sizeable strategic acquisitions could make them more competitive in the commercial markets that they consolidate."
AT&T added a net 296,000 postpaid subscriptions during Q1, as it sold 6 million smartphones, the carrier said Tuesday. It added 365,000 subscriptions on tablets, but lost 69,000 subscriptions on non-tablet devices. Of the 6 million smartphones AT&T sold during Q1, 4.8 million were iPhones. By comparison, Verizon Wireless added a net 677,000 postpaid subscriptions and sold 7.2 million smartphones. AT&T reported a net $3.7 billion net income for the quarter, up from a net $3.9 billion loss in Q4 and a net $3.6 billion profit in Q1 2012. The growth in tablet-based subscriptions was hurting AT&T’s per-device revenue because of subsidies placed on tablet purchases and plans, Chief Financial Officer John Stephens said Tuesday during a conference call. AT&T set the tablet subsidy to “stimulate demand,” he said. “We decided to stay with it because we have found that the economics make a lot of sense. I won’t suggest to you that it’s a permanent offering."
Blue Ridge Cable Technologies asked the FCC to modify WACP-Atlantic City’s market so the cable operator isn’t required to carry the station in the Pennsylvania counties of Berks, Lehigh and Northampton, said a petition filed with the Media Bureau Tuesday (http://bit.ly/17iFugB). Blue Ridge’s filing said WACP has never been carried in those counties, which are roughly 100 miles from Atlantic City. However, under the commission’s current mandatory carriage rules and definition of WACP’s market, Blue Ridge is required to carry WACP. Along with the physical distance, Blue Ridge argued that the market modification is warranted because WACP doesn’t carry local programming directed at the counties or share economic ties with them. “A station is not guaranteed the right to carriage throughout its DMA, and thus the Commission may conclude that a cable community is so far removed from the station that it cannot be deemed to be part of the station’s market,” said Blue Ridge’s petition.
Lake Havasu Charter School, Ariz., Mansfield Christian School, Ohio, and other Auction 83 translator applicants de-selected their noncommercial educational status. Lake Havasu “now seeks to amend its pending Auction 83 applications to apply for a commercial FM translator station,” it said in a filing to the FCC. Other applicants electing to change their status include CSSI Non-Profit Educational Broadcasting Corp., Weatherford, Texas, and Advance Ministries, Willis, Texas.