AT&T Broadband and Cable One Inc. have engineered a
system swap involving about 250,000 subscribers in four Western states.
CableOne, a unit of The Washington Post Co., will get
systems with 149,000 subscribers in Ontario, Ore.; Smithfield, Utah and the Idaho cities
of Boise, Idaho Falls, Pocatello and Lewiston. AT&T Broadband gets systems in Modesto
and Santa Rosa, Calif. with 107,000 customers and an undisclosed amount of cash.
The Santa Rosa systems, with about 50,000 subscribers, fill
out the rest of the San Francisco Bay Area for AT&T, which already has about 1.7
million subscribers in that area. The Modesto system, located in the central part of the
state, is near two other soon-to-be AT&T Broadband properties -- the Stockton system,
currently owned by MediaOne Group Inc., and the Sacramento system, owned by Comcast Corp.
AT&T stands to get the Stockton system as part of its
pending merger with MediaOne, slated to close sometime in the second quarter. The
Sacramento system is part of a pending swap with Comcast.
Once those deals are closed, the Central Valley cluster
should have about 500,000 subscriber, said AT&T spokesman Andrew Johnson.
"The Santa Rosa system cements the north end of our
operations in the San Francisco Bay Area and Modesto cements our Central Valley
base," Johnson said.
The swap won't substantially change the size of each MSO's
subscriber base. After the deal is completed, Cable One will have about 740,000
subscribers. AT&T Broadband has about 11 million customers.
Cable One CEO Tom Might said the deal is good for his
company in that Cable One trades one area where it had a small presence -- California --
and creates a major new market cluster for itself.
It has been Cable One's strategy to increase its holdings
in non-urban markets and to develop regional clusters, Might said. About 75 percent of
Cable One's subscriber base is concentrated in five states: Mississippi, Idaho, Texas,
Oklahoma and Arizona.
"As we have demonstrated, we're willing to go to
entirely new states," Might said. "We want to be dominant in the non-urban
locations in a state."
In the past two years, Might added, Cable One has made
acquisitions and trades for systems that have added about 206,000 subscribers.
In a separate deal, Insight Midwest, a 50-50 joint venture
between AT&T Broadband and Insight Communications Co. Inc., has agreed to purchase
Cable One's Greenwood, Ind. 16,000-subscriber cable system for an undisclosed sum. Insight
has about 350,000 subscribers in Indiana.
Insight CEO Michael Willner said the Greenwood system is
close to his existing properties surrounding the Indianapolis area. It is likely the
company will have to do some upgrades to the system, he added.