Broadband Cable Association of Pennsylvania

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April 27, 2012

The region's 814 area code should be safe at least through 2018, the Pennsylvania Public Utility Commission announced Thursday.

The PUC board voted 5-0 to dismiss a 2009 petition filed by third-party group Neustar on behalf of the telecommunications industry. Neustar had urged the commission to overlay a new area code in the 814 region. The petition argued that all 814 numbers will be used by the end of 2013. But Neustar recently changed its position, moving the exhaust date back five years to the second quarter of 2018. According to PUC spokeswoman Denise McCracken, this change was the direct result of amended commission policy to sell the 814 area code in blocks of 1,000 instead of blocks of 10,000 in order to conserve the number. "This allows us the opportunity to take (area code changes) off the table," she said. "We'll continue to monitor the numbers."

Under federal law, state utility commissions can dismiss change requests when the agency determines they are no longer necessary. "This is certainly great news, as I recognize that any form of area code relief has an impact on industry and the public," PUC Vice Chairman John F. Coleman Jr. said in a written statement. "Today's action certainly helps minimize that impact."

The action was also welcomed by state Rep. Carl Walker Metzgar, R-Allegheny Township, who helped organize public hearings for Somerset County residents to protest the proposed area code changes when they were first introduced. "We finally won that war," he said. "It was probably one of my biggest fights in Harrisburg." Metzgar credited local residents for their push-back against the plan during the PUC's public comment period from June 2009 through December 2010.

Shortly after a Somerset County town hall meeting in late 2010, the commission voted in favor of keeping the 814 area code here. Commission members then assigned a 582 area code to Erie, Crawford, Warren, Venango, Forest, Clarion, Jefferson, Elk and McKean counties. The new area code was to go into effect this year. But in January the PUC announced it had suspended the implementation of changes to wait for the April release of the new projected 814 exhaust dates. According to Metzgar, another factor for staying the course is the fact that cellphone sales have leveled off. "That's lowered our need," he said. "We've kind of reached a plateau with it." He added that he's satisfied after three years of indecision. "This is kind of the final word on it and we're very happy with it." Somerset Daily American


Time Warner Cable Inc.'s first-quarter profit rose 18% as growth in its broadband business as well as acquisitions offset continued losses of cable-TV subscribers. The results highlighted how broadband has become the cable operator's main growth business in the face of a mature pay-TV market. Residential services revenue, which accounts for most of the total, rose 4.1%, with high-speed data revenue expanding 9.6%. Cable TV rose only 1.9%. Overall revenue rose 6.4%, although about half of that growth was attributable to the $3 billion acquisition last year of Insight Communications, and purchase of some other businesses.

Time Warner Cable added 214,000 residential high-speed data subscriptions and 112,000 voice subscriptions, before the impact of corporate acquisitions. The company's chief operating officer, Rob Marcus, said that almost two-thirds of their new high-speed data customers this quarter signed up for the more-expensive, faster tiers of Internet service offered by the company. In contrast, Time Warner Cable lost 94,000 residential cable-TV subscribers, compared with the loss of 66,000 in the year-earlier quarter. Cable operators have been losing cable-TV subscribers to satellite and phone companies for years. At the same time, the emergence of cheap online video options poses a new kind of competition.

Programming costs rose 5%, the company said, highlighting a persistent problem facing pay-TV distributors as TV networks keep raising the fees they charge for carriage of their programming. Time Warner Cable said it expects these expenses to increase between 8% and 9% this year. Costs are rising partly because of broadcast TV networks asking for higher "retransmission" fees. Time Warner Cable Chief Executive Glenn Britt told analysts on a conference call Thursday he was closely following a legal battle over a Web startup, Aereo, that streams broadcast networks for a fee, without sharing the revenue with the broadcasters.

Aereo, which is backed by Barry Diller's IAC/InterActiveCorp ., has been sued by a number of broadcasters for copyright infringement. Aereo has said it doesn't believe the suits have merit. "I have no idea whether the courts will find it to be legal or not, but it is certainly something we are looking at," Mr. Britt said. "If it is found to be legal, not paying retransmission consent, it's a very interesting thing."

Business services revenue jumped 38%, led by sharp gains in revenue from voice services, wholesale data for wireless phone providers and high-speed data subscriptions. While growing rapidly, the business services unit generates only around 10% of the revenue earned by Time Warner Cable's residential business, which brought in $4.43 billion for the quarter. Time Warner Cable reported a profit of $382 million, or $1.20 a share, up from $325 million, or 93 cents a share, a year earlier. Excluding certain items, per-share earnings rose to $1.30 from $1.01. Wall Street Journal


Two big media companies that control Web-video hub Hulu LLC plan to buy out minority investor Providence Equity Partners, said people familiar with the matter, in a move that tightens the grip on the fractious joint venture.

News Corp. and Walt Disney Co. have a handshake deal to acquire Providence's 10% stake in Hulu for roughly $200 million, the people said, cautioning that the agreement hasn't yet been completed. That price-tag would double Providence's initial investment of $100 million in 2007. News Corp. and Disney together own more than 50% of Hulu. Comcast Corp., with roughly a 30% stake, isn't participating in the buyout, the people said. Under conditions imposed when Comcast took control of NBCUniversal last year, Comcast gave up management rights in Hulu. News Corp. also owns The Wall Street Journal. Hulu declined to comment.

Hulu is one of the most-popular websites in the U.S. to watch online video. It attracted 31.1 million unique viewers in March, up 13% from a year earlier, according to comScore Inc. Hulu recently said it has more than two million paying subscribers. Providence's exit may smooth out conflicts over Hulu's strategic direction. The private-equity firm has been focused on expanding Hulu's business to increase its equity value. But that goal has at times conflicted with media companies' efforts to safeguard their traditional TV businesses in a whirlwind of digital change-even at the expense of Hulu's own growth.

Hulu, for instance, has negotiated online rights to the media companies' shows but its managers, who also own equity, have sometimes clashed with media companies over how expansive those rights should be. Also at issue is what portion of the shows on the site should be available free. More recently, some executives at the media companies have been irritated by Hulu's steps to produce original programs, such as the series "Battleground," one of the people familiar with the matter said. At least some executives at the media companies see such programs-among a wave of original shows being produced by various video websites-as competing with traditional TV. Providence already had the right to be bought out of its stake in the venture in a period beginning this fall. But the desire to resolve the conflicting priorities between the media companies and Providence is in part why they accelerated the timetable, the person said.

The buyout comes just six months after the media companies suspended efforts to sell the site in part because they were unwilling to give Hulu long-term rights to their big TV shows. Since then, Hulu's owners have focused on how to use the site to help benefit the broader TV ecosystem. Executives at both News Corp. and Disney have been hoping to use Hulu as a venue to offer subscriber-only content to existing cable and satellite TV customers, the person said. The goal of such plans is to keep viewers from cutting off subscriptions, which generate more than $30 billion a year for TV channels. The tentative sale agreement was reported earlier by Bloomberg News. Wall Street Journal

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