New Financial Stats Coming Soon

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Expect to see some of cable's newest operating statistics -- including
'customer relationships' and customer-premises-equipment spending -- in
third-quarter releases from Comcast Corp. and Cox Communications Inc. next week
and from Insight Communications Co. Inc. this coming Thursday (after market
close).

A total of 11 CEOs from publicly traded MSOs put out a pledge Monday to use
the new metrics by the first quarter of 2003 at the latest.

The idea, they said, is to give investors more consistent benchmarks to judge
how far along rebuilds have progressed, when build-out capital spending will
diminish and how much spending is going to items that theoretically produce
revenue immediately, like the boxes needed for digital video or cable
modems.

As capital-expenditure costs diminish, 'free' cash gets left over, and
investors need to be able to figure out when that will occur.

The new numbers are also supposed to help smooth out differences in reporting
subscriber counts. The 'customer relationship,' for example, is a stat that
measures any customer the MSO bills, whether for video, data or telephony.

Insight CEO Michael Willner, who led this effort at consistency, said at a
New York conference that the customer-relationship stat would help to shed light
on penetration of homes passed.

Revenue-generating units, a variable measure of new-service units, is
supposed to mean for every public MSO primary analog-video, digital-video,
high-speed-data and telephony customers, not counting additional outlets.

Cox CEO Jim Robbins joked that the most contentious part of the process was
scheduling the conference calls. But some details were still left to individual
companies, such as how to count some gear spending, like replacing used-up
set-tops, that doesn't directly generate revenue, analyst Aryeh Bourkoff of UBS
Warburg LLC pointed out.

He added, 'The utility of the implementation will be tested over the next two
quarters.'

Some specifics of the initiative, culled from the MSOs' press release:

\u0007 Identify six standard reporting categories for capital expenditures: CPE
(such as converters and modems), commercial (costs to serve businesses),
scalable infrastructure (such as adding video servers as on-demand service
grows), line extensions (to pass new homes), upgrade/rebuild (to upgrade or
replace networks) and support capital (to replace non-network assets).

\u0007 Establish a new definition of customer relationships: 'The number of
customers that receive at least one level of service, encompassing voice, video,
and data services, without regard to which service(s) customers purchase.'

\u0007 Create a standard definition for RGUs: 'The sum total of all primary
analog-video, digital-video, high-speed-data and telephony customers, not
counting additional outlets.'

The publicly traded MSOs that have pledged to implement the new reporting
guidelines no later than the first quarter of 2003 are AT&T Broadband, Time
Warner Cable, Comcast, Charter Communications Inc., Cox, Adelphia Communications
Corp., Cablevision Systems Corp., Mediacom Communications Corp., Insight, Cable
One Inc. and General Communications Inc.

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