Cox's Robbins Weighs In on Scale - Multichannel

Cox's Robbins Weighs In on Scale

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Cox Communications Inc. president Jim Robbins reiterated his stance on high
programming costs at an industry conference Tuesday but added that the
Atlanta-based MSO would not seek additional scale to receive higher programming
discounts.

Robbins, speaking at the Deutsche Bank Securities Media Conference in New
York, said increased scale wouldn't really make a difference in lowering
programming costs, pointing to the former AT&T Broadband as an example. Cox
was one of several MSOs that considered acquiring AT&T Broadband last
year.

"When we went through our due diligence with AT&T Broadband, we were
stunned to see how little difference there was between the pricing we had and
the pricing they had from programmers." Robbins said. "We had estimated in our
own early valuations a 10% differential. It was half that."

Robbins added that Cox would attempt to get its fair share of programming
discounts, saying the MSO also would look at acquisition opportunities that
would increase the overall rate of return.

"We will fight hard to get our fair share of the breaks that may or may not
be forthcoming as the balance gets back in line between distributor and content
provider," Robbins said. "There's no question that scale will be helpful."

He continued, "But I'm not going to recommend to my boss that we go out to
get scale for the sake of getting scale. There's a lot of junky cable out there
in the world. That's not something we're particularly good at. If the right
stuff comes along, then that makes sense for us. But I would rather operate very
effectively in the markets that I have and suffer what may be a little less
benefit on the programming side, than to scale up and not have the opportunity
to do voice, video and data in all the markets that we're serving."

However, Robbins conceded that Comcast Corp. -- which acquired AT&T
Broadband in November -- will enjoy lower rates with its increased scale.

"There is no question that the `Big Kahuna' will get better pricing than we
will," he added.

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