Time Warner Cable

Time Warner Cable (NYSE: TWC) (formerly Warner Cable Communications) is an American cable telecommunications company that operates in 28 states and has 31 operating divisions. Its corporate headquarters are located in the Time Warner Center in Midtown Manhattan, New York City,^[2] with other corporate offices in Cambridge, Massachusetts; Columbus, Ohio; Buffalo, New York; Charlotte, North Carolina; and Herndon, Virginia.

Originally controlled by Time Warner, that company spun out the cable operations in March 2009 as part of a larger restructuring. Since then, Time Warner Cable has been an entirely independent company, merely continuing to use the Time Warner and Road Runner brands under license. Time Warner Cable does own several local news and sports channels, but it no longer has any corporate affiliation with national cable channels such as CNN or HBO, which remain the property of the original Time Warner.

History

Time Warner Cable was formed in 1989 through the merger of Time Inc.'s cable television company, American Television and Communications Corp., and Warner Cable, a division of Warner Communications. It also includes the remnants of the defunct QUBE interactive TV service. In 1995, the company launched the Southern Tier On-Line Community, a cable modem service now known as Road Runner High Speed Online. That same year, talks began that would later result in Warner's acquisition of Paragon Cable.

Time Warner retained Time Warner Cable as a subsidiary until March 2009, when it was spun out as an independent company.^[3] Prior to the spin-out, Time Warner had held an 84% stake in Time Warner Cable.^[4] Non-Time Warner shareholders received 0.083670 shares for each share already owned. This move made Time Warner Cable the largest cable operator in the United States owned solely by a single class of shareholders (without supervoting stock).^[5]

Arena

In April 2008, the Charlotte Bobcats reached a naming rights deal with Time Warner Cable, the Charlotte area's only cable television provider. Under this deal, Bobcats Arena will be renamed Time Warner Cable Arena. In return, Time Warner agreed to tear up the cable television deal that had limited the Bobcats' exposure over the team's first four years. Starting with the 2008–09 season, most Bobcats games will be seen on FSN South and SportSouth in North and South Carolina.^[6]

• Time Warner Cable Arena (2008–present, known as Charlotte Bobcats Arena 2005–08)

TWC Field

On March 9, 2007, Time Warner Cable, which provides service to the local area, northeastern Wisconsin, signed a 10-year naming rights deal. The field is home of the Wisconsin Timber Rattlers, a local minor league baseball team of the Midwest League, based in Grand Chute, Wisconsin.

Acquisitions

Adelphia

On July 31, 2006, Time Warner Cable and Comcast completed a deal to purchase practically all of Adelphia's assets for $17 billion.^[7] Time Warner Cable gained 3.3 million of Adelphia's subscribers, a 29 percent increase, while Comcast gained almost 1.7 million subscribers. Adelphia stockholders received 16% of Time Warner Cable. Time Warner Cable went public effective February 13, 2007, and the company began trading on the New York Stock Exchange on March 1, 2007.^[8]

In addition to Adelphia's coverage being divided up, Time Warner Cable and Comcast also agreed to exchange some of their own subscribers in order to consolidate key regions. An example of this is the Los Angeles market, which was mostly covered by Comcast and Adelphia (and some areas of the region already served by TWC), is now under Time Warner Cable. Philadelphia, previously was split between Time Warner and Comcast, with the majority of cable subscribers belonging to Comcast. Time Warner subscribers in Philadelphia were swapped with Comcast in early 2007. Similarly, the Houston area, which was under Time Warner, was swapped to Comcast, while the Dallas metro area was changed to Time Warner (RR).^[9] In the Twin Cities, Minneapolis was Time Warner and Saint Paul was Comcast. That whole market is now Comcast. There have also been rumors of a Charter purchase as well, much like how Adelphia was acquired in conjunction with Comcast.

NaviSite

Time Warner Cable purchased NaviSite (NAVI), a company providing cloud and hosting services, on February 1, 2011 for $230 million, roughly equating to $5.50 per share.^[10]

Insight Communications

On August 13, 2011, Time Warner Cable announced its purchase of Insight Communications for $3 billion acquiring Insight's 700,000 subscribers nationwide. The sale is subject to approval by the Federal Communications Commission and Insight franchisees.^[11]

Advance/Newhouse and Time Warner (Bright House Networks spin off)

Some of the regional cable system clusters operated by Time Warner Cable are owned by the Time Warner Entertainment - Advance/Newhouse Partnership (TWEAN). In 2002, Advance/Newhouse Communications, unhappy with some of the operating policies of Time Warner Cable in the AOL Time Warner era, forced a restructuring of the TWEAN partnership such that Advance/Newhouse would actively manage and operate a portion of the jointly owned cable systems equal to their percentage of equity. Under this arrangement, Advance/Newhouse enjoys the proceeds of their actively managed systems rather than simply a percentage of the partnership's total earnings. The majority of the affected systems are in the Tampa and Orlando markets under the Bright House Networks brand.

The value of this deal is that it allows Advance/Newhouse to more directly control their cable investments without having to completely unravel the TWEAN partnership, which does bring some benefits via Time Warner's development and purchasing clout.

Sprint Nextel Venture

In late 2005, TWC and several other cable companies formed a venture with Sprint Nextel. This joint venture enables TWC customers to receive a full suite of products, linking in-home and out-of-home entertainment, information, and communications services. All of this was included in the new "Triple Play On The Go", similar to the Triple Play^[discuss] but an addition of new services through Sprint Nextel.

Controversies

Carriage controversies

Bandwidth metering

In 2008, Time Warner Cable began testing tier-based metered data plans in Beaumont, Texas.^[12] In 2009, Time Warner Cable announced that additional cities including Rochester, New York will become additional test sites. In particular in Rochester groups have formed to stop TWC. Several groups including Stop TWC and Stop The Cap are currently working to oppose these efforts. On April 7, 2009, US Congressman Eric Massa, called on Time Warner to eliminate its broadband internet cap.^[13]

Local stations

• On December 13, 2011, Corpus Christi, TX stations KRIS-TV, K47DF, and K68DJ were pulled off their grids after Time Warner Cable and Cordillera Communications (the stations' owner) failed to reach a new deal. The owners offered an extension to keep the stations on until the end of the year, but according to Cordillera, Time Warner Cable has declined.^[14] On the other hand, TWC states the owners have "asked for unjustifiable rate increases—more than a 400% increase over the current price we pay—to continue carrying programming that they otherwise send out over the airwaves for free."^[15] At this point, negotiations between the two parties are ongoing.
• On December 15, 2010, Smith Media stations WKTV, WFFF, and WVNY were pulled from Time Warner Cable lineups in portions of upstate New York in a retransmission consent dispute. They were replaced by out-of-market stations owned by Nexstar Broadcasting Group (against Nexstar's wishes) until an agreement was reached in January 2011.
• In November 2010, the Sinclair Broadcast Group announced that it would pull 33 of its stations in 21 cities on January 1, 2011, if Time Warner doesn't come to an agreement.^[16] Regardless of the outcome, Time Warner would continue to carry Fox Network programming on its systems, due to a deal reached with Fox earlier in the year. However, syndicated and local programs on Sinclair's Fox affiliates would still not be seen.^[17] On January 15, 2011, Time Warner Cable and Sinclair reached a settlement, after the deadline was extended twice.^[18]
• On September 15, 2010, it was announced that Time Warner Cable and Belo were in a carriage dispute, affecting stations WFAA Dallas, KVUE Austin, KENS San Antonio and WCNC-TV Charlotte, as well as the TXCN cable news channel.^[19] On the evening of September 24, 2010, both parties came to a tentative agreement to keep their channels on their systems.^[20] Had this never happened by Midnight on September 25, Time Warner customers would've lost these stations as threatened.
• In July 2010, it was revealed that Time Warner Cable was in a carriage dispute with The Walt Disney Company for the second time in ten years.^[21][22] One of the issues included whether or not Road Runner, TWC's high-speed Internet service, will make the video streaming service ESPN3 available to its subscribers. Despite word of an early agreement on August 30, 2010,.^[23] it was not until the evening of the September 2 deadline when an agreement was reached between Disney and Time Warner Cable, preventing a blackout of ESPN, ESPN2, ESPNEWS, ESPNU, ESPN Classic, ABC Family, Disney Channel, Disney XD and ABC owned and operated stations on Time Warner Cable.^[24][25][26]
• In December 2009, the Fox Broadcasting Company announced that a dispute with Time Warner Cable could lead to Fox's owned and operated affiliates in New York, Los Angeles, Austin and Dallas to be pulled from their line-ups, along with Fox's cable and sports channels in all markets served by Time Warner Cable. Bright House Networks, which Time Warner Cable negotiates on their behalf, would also be affected, especially in the Detroit, Tampa Bay, Orlando and Gainesville markets, where Fox has O&Os. The carriage protests were announced shortly before the Bowl Championship Series, in which Fox would carry the Orange, Fiesta and Sugar bowls. The dispute excludes Fox News Channel, Fox Business Network and some regional sports channels, which are on separate contracts.^[27][28] Shortly before the 12 Midnight ET deadline on December 31, 2009, Fox granted Time Warner Cable and Bright House a brief extension during New Year's Day as talks continue, so that viewers would not miss the Sugar Bowl, though the other bowl games and the NFL lineup remained at risk.^[29] A settlement between the two parties was reached the evening of January 1, 2010, though no terms were disclosed; during the discussions that day, none of Fox's channels or stations were blacked out.^[30] It was later revealed that the terms of the Fox contract allows the network to be directly carried in the event that the local Fox affiliate cannot reach a retransmission consent agreement with Time Warner Cable.
• In October 2008, Time Warner Cable customers in Austin, Texas lost NBC programming as a result of an ongoing contract dispute between the owner of network affiliate KXAN and the cable giant. Both sides waged a public relations war against the other, each claiming in ads, on their Web sites, and in other mediums that they were in the right and that the other side is letting viewers down.^[31]
• Since September 2008, Time Warner Cable is under a carriage dispute with Daystar Television Network affiliate KDTN (Denton, Texas). As an end result, it was replaced with a test pattern. As of January 4, 2009; it was pulled from its lineup. Today, KDTN Daystar is broadcast on the digital channel 350 in the North Texas market.^[32]
• On September 15, 2008 LIN TV temporarily pulled the signals of its stations from TWC and Bright House in a total of 15 markets. Affected stations in areas served by TWC were WIVB/WNLO in Buffalo, New York; WLUK-TV in Green Bay, Wisconsin; WTHI-TV in Terre Haute, Indiana; WDTN-TV in Dayton, Ohio; WUPW-TV in Toledo, Ohio; and WANE-TV in Fort Wayne, Indiana.^[33]
• On December 31, 2006, Sinclair was scheduled to pull stations off Time Warner Cable in markets TWC inherited from Adelphia. Examples of such stations are WVAH, WGME and WCHS-TV in Charleston, West Virginia.^[34] TWC eventually came to an agreement to extend the carriage. However, this particular disagreement has resurfaced on November 10, 2010. If this dispute continues through December 31, 2010, it is likely that Sinclair will pull their stations as again threatened.^[35]
• On December 15, 2006, KAYU-TV, the Fox affiliate serving eastern Washington and the Idaho panhandle, was pulled from TWC subscribers in those areas. The reason given was that KAYU had not been "negotiating in good faith" for permission to carry the channel; KAYU pulled its own signal and wants reverse compensation for its carriage. Time Warner fears that such an agreement will result in higher cable bills for its subscribers. Station officials are providing free rabbit-ear antennas to access the signal.^[36] On February 1, 2008, an agreement was finally reached between the two parties that allows Time Warner to retransmit the station's feed until February 1, 2013.
• On October 15, 2006, just hours before TWC was to drop WSAZ-TV in Huntington, West Virginia, station management and TWC came to an agreement. The key was that TWC agreed to add the new MyNetworkTV affiliate, which WSAZ carries on a digital subchannel. If no agreement was reached, WSAZ, the local NBC affiliate, would have been dropped on December 8.
• On October 4, 2006, TWC reached a new carriage agreement with Fox Television Stations Group-owned stations KDFW and KDFI, respective affiliates of Fox and MyNetworkTV in the Dallas–Fort Worth Metroplex. Before that, a message was scrolling on a leased access channel saying, "Please be advised that pending progress of ongoing negotiations, Time Warner may be forced to discontinue carriage of KDFW and KDFI. While we remain hopeful that further negotiations are being made to keep KDFW and KDFI programming in the lineup, we're letting customers know in advance of this issue." Had the stations been pulled as threatened, most Dallas Cowboys games would have been unavailable to TWC subscribers. This particular controversy resurfaced once again on December 2009 as Time Warner Cable and the Fox Broadcasting Company have trouble coming to a new agreement, this time involving all O&Os and cable channels (see above).
• When The CW (which is half-owned by Time Warner) launched on September 18, 2006, a number of TWC systems did not carry the digital subchannels that the CW uses as affiliates in some areas. Among the stations whose subchannels are not carried on TWC are WCBD (DT2), Charleston, South Carolina; KVIA (DT2), El Paso, Texas; WLIO (DT2), Lima, Ohio; and KESQ (DT2) / KCWQ-LP, Palm Springs, California.
• On May 12, 2000, ABC network owned-and-operated stations were unavailable to TWC subscribers for 19 hours. The pullout, in the middle of a "sweeps" period, came because TWC could not agree with ABC's parent company, the Walt Disney Company, on whether to carry some specialty channels, like ESPN Classic and SOAPnet. Those tuning in to stations like WABC in New York City or KABC in Los Angeles instead saw this static message, "Disney is taking ABC away from you." Thousands of people bought antennas from RadioShack and other stores to view ABC programs, and KABC-AM in L.A. carried the audio feed of Who Wants to Be a Millionaire, then the network's highest-rated program. Amidst huge public outcry, and threats of Congressional action, TWC and ABC reached a new deal to put the ABC stations back on the systems.

Cable/on-demand channels

• On August 1, 2006, Time Warner Cable removed the NFL Network from its lineup in areas it gained from its deal with Comcast to jointly purchase bankrupt cable company Adelphia's assets and to swap certain areas it served with areas Comcast served. Adelphia and Comcast had both carried the National Football League's 24-hour network on a digital tier, however, the NFL claimed that Time Warner Cable now insists on making it into a premium channel on its systems.[1] As a result, NFL Network lost millions of cable households just as it was beginning a new contract to air eight regular-season games a year. On August 3, 2006, the FCC ordered Time Warner Cable to reinstate the NFL Network on those systems from which it had removed the channel, upholding the complaint that they had failed to comply with the required 30 day notice period required to be given to customers, before removing a channel.^[37] After considering its options, Time Warner Cable restored the channel at midnight on August 4, 2006, with an onscreen notice warning the viewers the channel would be removed in 30 days. Time Warner Cable issued a petition to the FCC in an attempt to reverse the decision citing "severe, immediate and irreparable harm" to Time Warner Cable and its customers, and threatening legal action if the FCC did not reach a decision by 10 am on August 7, 2006. On that day, the FCC responded to Time Warner Cable's petition by upholding the Commission's initial ruling that the NFL Network remain on the air for the required period. After two extensions of the deadline, TWC finally pulled the plug on September 15, 2006. "We will continue to negotiate and remain hopeful that an agreement will be reached that is beneficial to all", the network said in a statement that flashed on the screen in place of NFL Network. TWC did agree to carry a free preview from December 24 to December 30, primarily so that local viewers could watch the Rutgers Scarlet Knights play in the Texas Bowl, but no longterm agreement has been reached.
• On November 1, 2006, Starz! On Demand became available to some TWC subscribers. This came as a result of settlement of a long running dispute over its carriage. Starz! required this to be free to their subscribers, however, Time Warner Cable insisted on packaging all premium on-demand channels in a separate tier which would require an additional monthly fee for Starz subscribers. The channel is available in the "Capital Region" around Albany, New York, among other places.
• In another on-demand development, TWC had to modify "Dodgers on Demand", a joint venture with the Los Angeles Dodgers, on its systems in the Los Angeles area. In September 2006, Major League Baseball ordered TWC to remove the service, saying that MLB Advanced Media has rights to all interactive content taken from its games. TWC and the Dodgers responded by removing most highlights, excluding those from the team's 2006 Division Series loss to the New York Mets, which came from a newscast on KCBS. However, MLB has apparently softened its stance since then; in 2009, complete Mets home games were available on demand from SportsNet New York, owned in part by TWC.^[38]
• Time Warner Cable was the only major cable or satellite TV provider not to offer GOL TV (soccer channel)^[39] until it was added on August 6, 2008 in the New York area.
• The MTV Digital Suite networks (MTV Hits, MTV Jams, VH1 Classic and VH1 Soul) are unavailable on most Time Warner and Bright House Networks systems. Only former Adelphia systems carry the channels under Time Warner management, likely to fulfill the Adelphia contract; the channels were taken off for two months and then placed on a new tier of service when the systems were taken over.
• As of December 31, 2008, Time Warner and Viacom were unable to come to an agreement to renew any Viacom channel beyond the end of the year. Therefore, Time Warner and Bright House Networks would have lost all 19 Viacom channels (including Comedy Central and Nickelodeon) starting on January 1, 2009.^[40][41] This blackout was narrowly avoided when a zero-hour deal was reached shortly after 12 Midnight ET on 1/1/2009.^[42]
• As of April 9, 2009; Time Warner and Bright House Networks have dropped FEARnet and its on-demand services after their 8-month deal expired on March 31.^[43] It returned to those systems on May 11, 2011.
• As of May 31, 2009; Time Warner and Bright House Networks have dropped HDNet. HDNet Programming was originally part of the first Premium HD programming offered. Response letters from the President of Time Warner Cable state the reason as "HDNet would only allow us to keep these channels if we moved HDNet to the Digital Basic Tier. We believe that offering HDNet on a broadly distributed tier is not the right value proposition for our customers."^[44]
• December 2009; Although there are no other network disputes besides with the Fox O&O stations, Time Warner Cable has made a move to make some networks like truTV, ABC Family, CMT, Style, and Oxygen exclusive to those who have digital set-top boxes in order to free up bandwidth for expanding services like Start Over and Look Back as well as adding additional on demand content and additional HD channels.^[45][46]
• December 16, 2011; Time Warner Cable has dropped Fuse TV citing that there was "little appeal for this network". They've also noted "in challenging economic times, we have to make the tough choices to minimize costs, particularly in the case of channels that so few customers watch." On the same day, Madison Square Garden, Inc. (Fuse TV's owner) says that MSG will also be dropped by January 1, 2012 if a new deal is not reached, which causes a cascading effect for their Mid-Atlantic viewers. TWCable states "MSG insists that in order to continue carrying their sports networks, we must pay for and carry their Fuse music channel across the entire country. We don’t think it’s fair to ask Time Warner Cable customers nationwide to pay for Fuse and subsidize New York sports they can’t watch."^[47][48]

Signal intrusion & accidental transmission of pornography

On March 16, 2010, Time Warner Cable's transmission of their Kids on Demand and Kids Pre-School on Demand channels on systems in eastern North Carolina was interrupted by programming from the adult pay television channel Playboy TV for approximately two hours between 6:15 a.m. and 8:15 a.m./EDT, in which a group of nude women talked and posed in a sexually suggestive manner.^[49] This accidental display affected Time Warner's digital cable subscribers in four towns in the system's eastern North Carolina cluster, while other areas displayed a black screen. A Time Warner spokesperson said in a statement to Raleigh CBS affiliate WRAL,”It was a technical malfunction that caused the wrong previews to be shown on our kids’ on-demand channels. Unfortunately it hit at the worst possible time on the worst possible channels.” A Time Warner executive said normal monitoring procedures did not take effect because the glitch affected only a few areas.^[50]

Cable Clusters

• West Coast Cluster
  • California - Barstow, Desert Cities, Los Angeles, (north) San Diego, San Bernardino
  • Hawaii (Operating as Oceanic Time Warner Cable)
• Midwest Cluster
  • Kansas - Kansas City
  • Missouri - Kansas City
  • Nebraska
  • Ohio - Akron, Cincinnati, Cleveland, Columbus, Dayton, Findlay and Youngstown
  • Pennsylvania - Erie County, Sharon
  • Wisconsin - Green Bay and Milwaukee
• Northeast Cluster
  • Maine
  • New Hampshire - Berlin, Keene
  • Massachusetts - Athol, Pittsfield
  • Upstate New York
• New York Cluster
  • New Jersey - Bergen County, Hudson County
  • New York - New York City (Manhattan, Queens, Staten Island, most of western Brooklyn)
• The Carolinas Cluster
  • North Carolina - Charlotte, Raleigh, Greensboro, and Wilmington
  • South Carolina - Columbia, Sumter, Florence, Summerville, Hilton Head and Myrtle Beach.
• Texas Cluster
  • Texas - Arlington, Austin, Beaumont/Port Arthur, Corpus Christi, Dallas, El Paso, Harlingen, Killeen/Temple, Laredo, Rio Grande Valley, San Antonio, Waco, and Wichita Falls
  • (Coincidentally, the Irving-Grapevine-Coppell-Lewisville cluster was previously under Time Warner Cable's control upon acquisition of Paragon Cable. This was prior to AT&T Broadband's full absorbtion of that cluster.)
• Not in a Cluster (National)
  • Alabama - Dothan, Enterprise
  • Arizona - Yuma
  • California - El Centro
  • Colorado - Gunnison, Telluride
  • Idaho - Coeur d'Alene, Moscow
  • Indiana - Terre Haute
  • Kentucky
  • Virginia
  • Washington - Pullman
  • West Virginia - Clarksburg

Divisions

Time Warner Cable's Divisions, from official website.

• West Coast Region
  • Oceanic Time Warner Cable (Hawaii)
  • Time Warner Cable Desert Cities
  • Time Warner Cable San Diego
  • Time Warner Cable Southern California
• Midwest Region
  • Time Warner Cable Kansas City
  • Time Warner Cable Nebraska
  • Time Warner Cable Northeast Ohio & Western Pennsylvania (Akron & Youngstown)
  • Time Warner Cable Mid-Ohio (Columbus)
  • Time Warner Cable Southwest Ohio (Dayton; Cincinnati; Lexington, KY; Terre Haute, IN)
  • Time Warner Cable Wisconsin (Milwaukee & Green Bay)
• Northeast Region
  • Time Warner Cable Albany
  • Time Warner Cable Buffalo
  • Time Warner Cable Rochester
  • Time Warner Cable Central New York
  • Time Warner Cable New England
• New York Region
• Carolina Region
  • Time Warner Cable Charlotte
  • Time Warner Cable Greensboro
  • Time Warner Cable Eastern Carolina
  • Time Warner Cable Raleigh
  • Time Warner Cable South Carolina (Columbia)
• Texas Region
• Time Warner Cable National (non-clustered systems)

Former divisions sold to Comcast

• Time Warner Cable Houma
• Time Warner Cable Houston
• Time Warner Cable Lake City/Live Oak
• Time Warner Cable Mid-South (Memphis, TN, AR, and MS)
• Time Warner Cable Minnesota
• Time Warner Cable Shreveport
• Time Warner Cable St. Augustine/Palatka
• Time Warner Cable Cape Coral/Naples

Awards

2008 The company was honored at the 2008 Technology & Engineering Emmy Awards for development of interactive video-on-demand infrastructure and signaling, leading to large scale VOD implementations.

2009 The company was honored by Institutional Investor as America's Best Investor Relations for sell side in the Media sector for Cable & Satellite in 2009.

2010 The company was named the "Wendell Brown of Cable Companies" in 2010.

The company was ranked in second place by Institutional Investor as America's Best Investor Relations for sell side in the Media sector for Cable & Satellite.

2011 Time Warner Cable is ranked among America’s most successful companies, according to Institutional Investor magazine’s ALL-AMERICA EXECUTIVE TEAM rankings.

Best Investor Relations - First Place - Nominated by the Buy Side

Best Investor Relations - Second Place - Nominated by the Sell Side

Best CEO - Glenn Britt - Nominated by the Sell Side*

Best CEO - Second Place - Glenn Britt - Nominated by the Buy Side

Best CFO - Robert Marcus - Nominated by the Buy Side*

Best CFO - First Place - Robert Marcus - Nominated by the Sell Side

Best Investor Relations Professional - First Place - Thomas Robey - Nominated by the Sell Side

Best Investor Relations Professional - Second Place - Thomas Robey - Nominated by the Buy Side

*Place rank not publicly disclosed.

Business Insider's list of most hated companies in America - Third Place, after Pepco and Delta Airlines

Statistics

As of second quarter 2009, there were 14.6 million basic cable subscribers, 8.8 million Digital cable subscribers, 8.7 million Road Runner residential subscribers, 2.5 million DVR subscribers, and 4 million residential Digital Phone subscribers.^[51]

References

External links

• Official Website
• Time Warner press release regarding Adelphia acquisition
• Time Warner press release regarding Advance/Newhouse restructuring
• Time Warner press release regarding Start Over
• Time Warner Cable Deals