An Ignoble Experiment

2. Cass Cable TV systems acquired by Rural Broadband Investments

Comcast (NASDAQ: CMCSA) has apparently found yet another use for its advanced cloud-based X1 system: streaming Electronic Arts (EA) video games to subscriber televisions.

Five sources briefed on the plan told Reuters that Comcast--in the throes of a $45.2 billion acquisition bid for Time Warner Cable (NYSE: TWC)--and EA have been testing the idea for two years, using video games such as FIFA and Madden and are now close to make a deal to put EA's games on Comcast subscriber TVs. The move, if it happens as sources claim it will, would be a direct competitive slap to the likes of Microsoft (NASDAQ: MSFT) and Sony, which have been pushing TV content through their Xbox and PlayStation gaming devices.

Neither Comcast nor EA would comment on the report, which marks yet another rumored collaboration between the nation's largest cable operator and an industry outsider-wannabe. Several weeks ago word leaked that Comcast was working with Apple (NASDAQ: AAPL) on a streaming deal.

The X1 system mimics a cloud-based computer for the TV by providing apps and an interface to make the television viewing experience more interactive. The deal with EA would allow Comcast to offer popular sports and casual titles from EA's portfolio as applications. Customers could then use their tablets as controllers to play the games.

For more:
- Reuters has this story

Read more about: video games, Electronic Arts
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By Jim Barthold

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3. Shentel cable segment loses video customers, gains RGUs in first quarter

Rural Broadband Investments, a company that acquires and invests in rural-focused cable systems in small-to-medium sized markets, has added another piece to its portfolio by purchasing several Illinois-based cable systems from Cass Cable TV.

The systems, located in Brighton, Carrollton, Jerseyville, Manchester, Roodhouse and White Hall, Ill., "are an excellent add-on to our Southwest Illinois footprint," RBI CEO Phil Spencer said in a press release.

The new systems are more than an investment; RBI plans to upgrade them by rolling out advanced services already available in nearby markets RBI operates as NewWave Communications, Spencer said.

"We intend to fiber tie these systems and offer additional HD channels, advanced commercial services and a more robust Internet service (which will) give us an exceptional opportunity to better serve customers and increase penetration of high-speed Internet service as well as advanced commercial services," he added.

The Cass system infrastructure isn't exactly falling off the poles, according to company vice president Chad Winters.

"Cass made many fiber enhancements that brought advanced services to the area," Winters pointed out in the press release and now "New Wave Communications is going to take technology to the next level (because it) recognizes the need for technology in rural areas."

RBI has been on something of a buying streak since April 2013 as it aims to build a base of 300,000 to 400,000 subscribers. Among those deals were investments in NewWave Communications, Cable Management Associates, the McDonald Cable/Cablevision systems and City Cable from Poplar Bluff, Mo. The company currently has 150,000 customers as it passes more than 440,000 residences in Illinois, Indiana, Missouri, Arkansas, Louisiana, Mississippi, Texas and Nevada.

For more:
- see this press release

By Jim Barthold

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4. With Comcast witnesses set for House hearing, Franken seeks input from CCIA

Mid-Atlantic telecom service provider Shenandoah Telecommunications (Shentel) lost 1,864 video customers year-over-year in the first quarter of 2014 and 44 between end of fourth quarter 2013 and the end of the first quarter 2014, but still reported an overall gain in revenue generating units (RGUs) when it announced first quarter earnings.

Shentel, in an earnings release, said it gained 1,676 cable segment customer relationships year-over-year. It added 241 customers between Q4 2013 and Q1 2014. Non-video customers were up from 16,220 to 19,517 year-over-year, while video customers fell from 53,017 to 51,153. Revenue generating units (RGUs) were up 6.1 percent over the prior year and now total 116,592, the company reported.

Service revenue in the segment increased by $1.3 million to $17.42 million.

"The improvement in the cable segment this quarter demonstrates the strength of our newly upgraded network and the effectiveness of our marketing strategies to increase awareness of our improved service offerings," President-CEO Christopher French said in the release. "Cable remains an important part of our long-term growth strategy as customer demand for high-speed broadband services and premium digital TV packages continues to increase."

Shentel said its video penetration dropped from 32.3 percent in the first quarter of 2013 to 30.9 percent in the first quarter of 2014. But digital video penetration climbed from 39.6 percent to 57.5 percent and high-speed Internet penetration climbed from 25.8 percent to 28.5 percent year-over-year. Shentel said it now has 48,068 high-speed Internet customers (12,714 of whom are DSL) compared to 42,435 in the year-ago period--12,709 of whom were DSL.

The carrier also continues to install fiber, adding 962 total fiber miles and 26 fiber route miles. Total fiber miles are measured by taking the number of fiber strands in a cable and multiplying that number by the route distance, the carrier explained.

For more:
- Shentel has this press release

By Jim Barthold

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5. Canadian telcos using fiber to woo video customers

The House Judiciary Committee has stacked its May 8 hearing list with potential opponents to Comcast's (NASDAQ: CMCSA) $45.2 billion Time Warner Cable (NYSE: TWC) acquisition. Meanwhile, one name not on the list, U.S. Sen. Al Franken (D-Minn.), is continuing his one-man campaign against an acquisition he says "would concentrate unprecedented power in Comcast's hands."

Franken is a member of the Senate Judiciary Committee, which already held its hearing.

On the House side of the Capitol building, the Judiciary Committee wants to hear from Comcast VP David Cohen--who obviously favors the deal--along with American Cable Association President Matt Polka, Columbia law professor Allen Grunes, Rural Media Group Chairman Patrick Gottsch, Cogent Communications founder Dave Schaeffer, and DeepField Networks President Craig Labovitz, not all of whom see the merger with such rosy glasses.

One name not on the list of witnesses is Franken, potentially the biggest elected burr in Comcast's saddle. The Minnesota senator made headlines when he directly asked Netflix (NASDAQ: NFLX) CEO Reed Hastings what he thought of the deal. Without responding directly to Franken, Hastings later made it clear that Netflix is opposed to the merger.

Now Franken has taken a similar tack in a letter to the Computer and Communications Industry Association (CCIA) President and CEO Edward Black, where Franken reiterated his opposition and asked the organization to answer three questions:

Do you believe that Comcast's proposed acquisition of Time Warner Cable would harm the public interest?
What impact will the deal have on competition in relevant markets, and, ultimately, on consumers?
Provide any other relevant views, including any thoughts you have about arguments made in the Public Interest Statement that Comcast recently filed with the FCC or in the testimony that Comcast and Time Warner Cable recently provided to the Senate Judiciary Committee.

"I understand that CCIA's mission is to foster competition, innovation, and open markets, and that CCIA pursues positions in which its members' interests and CCIA's underlying principles are most aligned," Franken wrote as a reason for seeking the input.

For more:
- Multichannel News has this story
- Franken's office issued this press release

Read more about: acquisition, Comcast
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By Jim Barthold

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