An Ignoble Experiment

3. Winfrey: Charter's tax position could boost mergers and acquisitions strategy

Charter Communications (Nasdaq: CHTR) will launch Wi-Fi in 2014, initially targeting local businesses with wireless gateways that can transmit dual SSIDs, CEO Tom Rutledge said Tuesday, when the MSO reported that it gained 86,000 high-speed Internet subscribers in the third quarter.

"While we don't have a complete rollout plan yet, we're working on beginning to deploy Wi-Fi at Charter," Rutledge said on Charter's earnings call.

Rutledge didn't say if Charter will invest in building Wi-Fi hotspots in public areas for its consumer broadband business.

Charter announced in June that it would test ActiveVideo's CloudTV solution for use in a new interactive program guide. Rutledge said Tuesday that Charter plans to begin testing a cloud-based guide using technology from ActiveVideo and Zodiac Interactive with employees from its Fort Worth, Texas, cable system, and expand the trial to consumers in Forth Worth by the end of the year.

Rutledge said the ActiveVideo trial is focused on seeing if Charter could deliver a cloud-based guide that delivers listings to subscribers using MPEG.

He added that Charter has also looked at Comcast's (Nasdaq: CMCSA) X1 guide and said the company could opt instead to deploy an all-IP guide similar to X1, or license Comcast's X1 platform for Charter subscribers.

Charter already has a "substantial base" of set-tops installed in subscriber homes that contain DOCSIS modems capable of powering an IP guide like Xfinity, Rutledge said. But Charter believes there is a "high probability" that the "MPEG cloud guide" it is testing in Fort Worth "would work," Rutledge added.

Also worth noting from Charter's Q3 report and earnings call:

Rutledge said Charter may be able to monetize a new multiscreen video app by striking deals with programmers that would include download-to-go rights for subscribers and even the ability to sell video outside Charter's cable footprint. "We may sell subscriptions everywhere," he added.
Rutledge said Charter is stepping up marketing and branding efforts for the improved video product it has launched on systems that have been converted to an all-digital platform. "The time has come for us to rebrand Charter," he said.
Charter lost 27,000 net video subscribers and gained 41,000 net phone customers.
Charter ended the quarter with about 1.3 million broadband-only customers, whom Rutledge said represent a "selling opportunity for us from a video perspective."
Capital spending at Charter decreased by $80 million to $425 million in Q3.
Commercial revenue at Charter jumped 20.4 percent to $218 million. Total revenue increased by 5.4 percent to $2.12 billion. The MSO reported a net loss of $70 million (68 cents per share), compared to the net loss of $103 million ($1.03 per share) it reported in the third quarter of 2012.

For more:
- see the release

Special Report: Cable in the third quarter of 2013

Read more about: DirecTV
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By Steve Donohue

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4. Verizon launches Ellipsis 7 tablet, though converged service is still in the offing

Charter Communications' (Nasdaq: CHTR) ability to reduce income tax payments is an asset that could be used to help it merge with cable MSOs or strike other deals, CFO Christopher Winfrey said Tuesday.

"We have tax assets that are significant both on the tax asset basis, and the loss carry forward. That puts us in a pretty unique position to look at acquisitions, [cable system] swaps, and in theory, dispositions," Winfrey said on Charter's third-quarter earnings call.

Charter, which closed a deal earlier this year to buy former Bresnan Communications systems from Cablevision, said in a presentation that accompanied its third-quarter earnings report that it does not expect to be a significant income tax payer until 2017.

For months, there has been speculation that Charter will attempt to acquire or merge with Time Warner Cable (NYSE: TWC). "If Charter is to succeed in its quest to acquire Time Warner Cable, they must first demonstrate that they are worthy owners. And, of course, that their currency (stock) is worthy of the hefty equity valuation it has been accorded," Moffett Nathanson analyst Craig Moffett wrote in a research note Tuesday. "Third quarter results on this score were good. But where they good enough?"

Read more about: Charter, Time Warner Cable
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By Phil Goldstein

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5. HIGH TV 3D eyes U.S. launch following debut in Bermuda

Verizon Wireless (NYSE:VZ) took the wraps off its rumored Ellipsis 7 tablet, and hinted that further products in the Ellipsis family could be coming. However, the carrier did not explicitly detail any new mobile video, voice and data service--Verizon last month filed a trademark for a new mobile video, voice and data service under the name "ELLIPSIS."

Ellipsis 7

Verizon said the Ellipsis 7, which boasts a 7-inch HD screen, will be available online and in Verizon Wireless stores starting Nov. 7 for $249.99. For a limited time, customers can get $100 off any tablet, including the Ellipsis 7, when purchasing with a new two-year contract, the company said.

It's unclear which company makes the gadget or how the device might be related to Verizon's trademarked ELLIPSIS service. A Verizon spokesman did not immediately respond to a request for comment.

According to the copyright application filed by Verizon on Oct. 15, ELLIPSIS is a "wireless telecommunications device featuring transmission of voice, data, image and video." Verizon also filed a separate copyright application on Oct. 14 for the brand ELLIPSIS 7, reserving the right to that name for wireless telecom devices, tablet computers and a device that "establishes a local, wireless network" and would have a music player and a still image and video camera.

Verizon did note that Ellipsis 7 users can access the Redbox Instant streaming video service, and that the device has a front-facing camera for video chatting. Additionally, the device supports Verizon Messages, an integrated messaging service that lets users to send and receive text messages from their tablet.

Interestingly, Verizon noted that the Ellipsis 7 "is the first product from Verizon Wireless in the Ellipsis family," indicating additional products could be in the pipeline.

The disclosure of the Ellipsis trademark, which was first reported by FierceCable, came after Verizon Communications CFO Fran Shammo revealed on the company's third-quarter earnings call that Verizon had terminated its joint innovation venture that it launched with Comcast, Time Warner Cable and Bright House Networks after it purchased spectrum from the major MSOs in December 2011. Shammo suggested on the earnings call that the decision to terminate the joint innovation venture was related to Verizon's recent agreement to buy Vodafone's 45 percent stake in Verizon Wireless for $130 billion. Going forward, Verizon will focus on "bringing to the customer the best products available between wireline and wireless," Shammo said.

For more:
- see this Verizon post

Related Articles:
Verizon trademarks ELLIPSIS for new video, voice, data device and service
Verizon, Outerwall to ramp up Redbox Instant marketing
Shammo: Verizon Wireless joint innovation venture with Comcast, TWC 'has been terminated'
Verizon signs FiOS Quantum marketing pact with NFL team

Read more about: converged solutions
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By Mariko Hewer

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