Top 25 Cable and Satellite Operators

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1 Comcast Cable Communications


Comcast has left few doubts about its ability to manage cable systems after reporting healthy subscriber, revenue and cash flow gains during the first two quarters since its acquisition of AT&T Broadband late last year. The company is 392,900 basic customers shy of the combined 21,757,000 reported by both Comcast and AT&T Broadband a year ago. Most of the loss stemmed from a sale of 314,000 subs sold to Bresnan Communications in March. The remaining 78,900 can be attributed to subscriber attrition last year, much of it on the AT&T side.
As of the end of second quarter, Comcast counted nearly 7 million digital cable subscribers, up from the 6.473 served last year by both Comcast and AT&T. Modem customers totaled 4.4 million, up nicely from 2.803 million reported by both companies a year ago.
By year's end, Comcast expects to have video-on-demand available to 50 percent of its customer base, up from a current 20 percent. HDTV should be available to 65 percent of customers, up from 54 percent at second quarter's end. Later this year, the company expects to begin adding digital video recorders to its offerings.
Announcing Comcast's second quarter results, Comcast Corp. president Brian Roberts commented that the integration of former AT&T systems would be complete in half the time originally forecast by company executives. He also increased guidance for 2003 cable operating cash flow by $100 million.

2 DirecTV


News Corp.'s acquisition of 34 percent of DirecTV parent Hughes Electronics Corp., announced in April, awaits regulatory approval, which is expected by the end of the year or first quarter 2004.
If the transaction closes as anticipated, News Corp. chairman Rupert Murdoch will become Hughes chairman; consultant and News Corp. board member Chase Carey will become Hughes' CEO; and DirecTV president Eddy Hartenstein will become vice chairman of Hughes.
Industry analysts expect Murdoch, a tough competitor with extensive experience in satellite TV around the world, to ratchet up considerably competition between cable and satellite operators. DirecTV intends to increase the number of markets in which it transmits local TV signals from its current 64 to more than 100 by year's end.
Currently, DirecTV offers seven full time high definition TV channels and broadcasts select sporting events, including NBA games, in HDTV. This fall, it will telecast NFL Sunday Ticket games in HD.
The company currently has 350,000 customers using PVR-enabled set-tops and is exploring relationships with local telephone companies that would enable it to offer broadband service via both terrestrial and satellite technologies. Company executives say this is a marketplace hedge, and is not critical to DirecTV's longterm video strategy.

3 Time Warner Cable


The second-largest cable operator in the U.S. a year ago, Time Warner Cable has slipped to third place in our ranking, due to restructuring of a longtime partnership between Advance/Newhouse and Time Warner Entertainment, which left TWC with 2 million fewer basic subscribers. The company has added 24,000 net new basic subscribers since the beginning of the year.
This year, Time Warner Cable has offered subscribers a variety of new products such as MOD, SVOD, DVR, HDTV and multiple ISPs. It also launched its first full-scale marketing rollout of VoIP service in Portland, Me.
The company has continued its aggressive rollout of digital video services. VOD is almost fully deployed with MOD and SVOD available in all of Time Warner's 31 divisions. Also increasingly popular is Time Warner Cable's digital video recorder service. First launched in Rochester, N.Y. and Green Bay, Wis., early last fall; DVRs are now available in 27 divisions, with more than 150,000 customers signed up.
Time Warner Cable has carriage agreements with ABC, CBS, NBC, PBS, HBO, Showtime, Discovery Networks, In Demand, several of Fox Sports Net's regional sports networks and over 70 local broadcast stations for carriage of high definition signals. It provides HDTV set-top boxes to more than 120,000 customers.
Time Warner Cable currently has 2.9 million residential high-speed data customers and offers them a choice of broadband providers.

4 EchoStar Communications


EchoStar Communications Corp. has added close to 1.4 million new subscribers since a year ago. The Littleton, Colo.-based company, operating as Dish Network, plans to pursue opportunities in HDTV and DVR while continuing to emphasize its position as the lowest-cost, all-digital television provider.
Since early summer, Dish Network has been offering five HDTV channels, with two more planned by season's end. Recently acquired satellite capacity will give the company the ability to eventually offer up to 50 high definition channels.
In the meantime, EchoStar also plans to roll out other HDTV products such as a high-end receiver capable of recording up to 25 hours of high definition content or 180 hours of standard definition content. The company said it is also exploring the possibility of bundling its HDTV receivers with high definition TV sets.
EchoStar is rolling out a new DVR receiver, offering up to 100 hours of standard definition recording time. It has also emphasized development of international programming and interactive TV. Dish Network offers 44 international channels representing 15 languages. The company expects to offer 100 additional international channels as its new satellites come online.
Recent interactive TV initiatives include children's "edutainment" and fantasy sports. EchoStar delivers local TV signals in 70 cities, and will boost that number to 100 markets by the end of the year.

5 Charter Communications


With three former senior executives indicted for fraud and a basic subscriber count down 450,000 from 18 months ago, Charter Communications has had a rough year. The company has completed what it calls "a full and complete review of its policies, procedures, people and products" and has re-edited financial reports for 2000, 2001 and 2002. It has reduced its workforce by more than 15 percent and has issued tender offers designed to reduce bank debt and extend maturities.
Carl Vogel, Charter's president and CEO, is optimistic following the changes. "We have the right products for the marketplace, the right platform to deliver those products and the right people to deliver our business plan," he said.
Charter's chairman and major shareholder Paul Allen stated at Charter's annual meeting: "There is still much work to be done but we are up to the challenge. I have great faith in Charter's leader Carl Vogel and his bolstered management team."
Company executives say they are emphasizing the value of their products, instead of using deep discounts to win new customers and retain existing ones.
Charter offers VOD and HDTV, and is testing an advanced broadband media center, which includes PVR capabilities. The company also expects to investigate deploying cable telephony in strategic markets next year.

6 Cox Communications


Cox Communications continued to show strong subscriber and revenue growth in 2003 by adding more new customers and boosting sales of advanced new digital services. Growth in high speed Internet and telephone service accounted for much of the increases, even while the company added basic cable subscribers.
This year, Cox's total revenue generating units reached the same total as the number of homes passed by its cable plant: 10 million. Cox also expanded its telephony-ready homes passed with market launches in Wichita, Kan. and Tucson, Ariz. The company's three-product bundle strategy not only grew overall revenues, but also reduced customer churn by 50 percent for those customers with phone, Internet and video services.
Cox's commercial broadband division, Cox Business Services, grew revenues more than 27 percent in first quarter 2003 over prior year, reflecting the growing demand for broadband and bundled services for small and large businesses in Cox's footprint.
As the company approached 30 percent digital penetration of its 6.3 million video subscribers, it rolled out Entertainment on Demand, VOD, PVR and HDTV services in a number of markets. The company also added Home Networking, both wired and wireless, to its menu of residential data services. Cox is focused on delivering free cash flow in 2003.

7 Adelphia Communications


With $1.5 billion in debtor-in-possession financing, Adelphia Communications Corp.'s top executives look forward to completing the upgrades of another 20 percent of the company's systems by the middle of 2004. Currently, about 70 percent of Adelphia's plant has been upgraded.
By mid 2004, the company also hopes to emerge from bankruptcy, according to Adelphia chairman and CEO Bill Schleyer.
With members of the founding Rigas family federally indicted, and its client base and suppliers clearly worried about long term prospects, Schleyer and company president and COO Ron Cooper are working to prove Adelphia will continue to be a major industry force and reliable service provider.
Schleyer and Cooper also hope to maintain Adelphia's current size, with no major asset sales contemplated. The company's effort to upgrade its facilities could also help stem subscriber attrition, which, during the period ending March 31, numbered 125,000 or three percent of its base, according to a filing with the Securities and Exchange Commission. Since a year ago, Adelphia's basic subscriber total has plummeted by nearly 700,000 homes.
Something else that will change is the company's name. Adelphia's new leaders will retain the name through the Rigas's trial scheduled for next January. When that ends, they will select a new moniker.

8 Cablevision Systems


With 4 million homes passed by upgraded plant, Cablevision has been boosting its digital subscriber count at a handsome clip this year, increasing subscribership from 1.4 percent of its customer base a year ago to more than 20 percent by the end of second quarter.
As a result, Cablevision has increased its guidance, anticipating between 875,000 and 900,000 digital video customers by the end of this year. The company also expects to be providing high-speed data services to more than 1 million customers by year-end 2003.
Cablevision's stock slipped after it announced second quarter cash flow growth that didn't meet analysts' expectations. The shortfall resulted in part from $8.4 million in legal fees and other costs incurred in the company's license fee battle with Yankees Entertainment and Sports Network.
Cablevision intends to be the first cable company to offer IP telephony services to its entire customer base, a goal it hopes to reach before year's end.
Second quarter highlights included the launch of Rainbow 1, described as the world's most powerful and technologically advanced spot beam satellite. Cablevision plans to spin off Rainbow 1, which aims to provide direct broadcast services throughout the continental U.S., late this year.

9 Advance/Newhouse Communications


Advance/Newhouse returned to the day-to-day management of cable systems after the restructuring of its partnership with Time Warner Entertainment in January 2003. In April, Advance/Newhouse announced a name change for the TWE-A/N partnership divisions it now manages to Bright House Networks. Bright House Networks serves more than 2 million subscribers in several large markets, including Tampa Bay and Central Florida (Orlando), Indianapolis, Birmingham, Bakersfield and Detroit, along with several smaller systems in Alabama and the Florida Panhandle. The high-growth Tampa/Central Florida markets are contiguous and form one of the country's largest clusters.
More than 95 percent of Bright House Network subscribers have high speed data, VOD and SVOD available to them. The company's Florida operations were one of the first cable systems to offer high definition signals, which today are received by nearly 40,000 customers. Bright House Networks offers high speed data customers a choice of multiple Internet service providers. With the name change, the company began marketing personal video recorder services in five of its largest markets. Along with the launch of the latest technology and product offerings, exceptional customer service will be a priority across all operating units.
In June, Bright House Networks acquired systems formerly owned by Canada's Shaw Communications and serving about 50,000 customers in Florida.

10 Mediacom Communications


Mediacom's share price fell 14% after it announced it had lost more subscribers during second quarter than it did during the same period a year ago. The decline forced Mediacom to revise downward its revenue and cash flow growth guidance for the year as a whole.
The company, which focuses on providing broadband services to smaller U.S. cities and towns, has virtually completed its network upgrade to hybrid fiber-coaxial architecture with at least 550MHz, and by the end of 2003, expects to have VOD available to approximately 50 percent of its digital customers and high-definition television available to about 60 percent of basic subscribers.
Management priorities for next year include expanding VOD and high-definition footprints, and introducing telephony service to at least a portion of the customer base.
Financially, Mediacom is in strong shape, with some $800 million of unused credit lines on hand. Moreover, it expects to achieve positive free cash flow (or EBITDA minus capital expense minus interest expense) during the second half of 2003.

11 Insight Communications


Despite disappointing growth and the loss of 13,000 subscribers during second quarter, Insight Communications expects to finish 2003 with 1 percent growth in basic customers. The company has launched HDTV service in 85 percent of its operating footprint and hopes to offer more cable networks available in HDTV by the end of the year.
Looking toward 2004, Insight aims to expand deployment of high-speed data and telephony. President and COO Kim Kelly said the company would repackage its most popular offerings and examine competitive price points next year, in an effort to simplify its business for both customers and employees.
Michael S. Willner, vice chairman and CEO, told analysts that 95 percent of Insight's customers are now served by an upgraded network of 750MHz or higher. He also noted that despite Insight's usual second quarter weaknesses, the company posted RGU growth of 10 percent year-over-year.

12 Cable One


Cable One substantially improved cash flow in 2002 by continuing to focus on improving customer satisfaction, maintaining digital penetration, and building high-speed data.
Although it was one of the last MSOs to deploy both digital and data, the company now has both products available to 100 percent of its customer base. Digital penetration has held steady at 30 percent after Cable One introduced the product in 2001 with a 12-month free deal, and high speed Internet penetration is now at 15 percent and continuing to grow rapidly. "We can see the day coming within five years when Internet service will generate as much cash flow for this company as video service," said Tom Might, president & CEO of Cable One,
Like many MSOs, Cable One found it harder to maintain basic subscriber levels in 2002 in the face of DBS competition and a stagnant economy. Major 2003 initiatives have included a basic rate freeze, direct sales, and product bundling.

13 RCN Corp.


RCN continues to focus on selling bundled services to customers in seven of the top ten U.S. markets. The company's success is reflected in its monthly $84 average revenue per customer, and the fact that individual customers average more than two RCN services, including long distance. In fact, one-third of RCN's approximately 465,000 customers subscribe to various bundled packages. And one third of all customers take more than three services each, paying fees that average $135 per month. At the end of the first quarter of 2003, 37 percent of RCN's customers subscribed to high-speed data, and 80 percent of the bundled customers also took high-speed.
RCN concentrates on rolling out new products across its markets. These include Megamodem, with speeds up to 3 MBPS or at least twice the speed of basic cable modems, HDTV, VOD and home networks. Most recently, it introduced Value Modem in Queens, N.Y. This product targets migrating dial-up customers, encouraging them to move up to basic high-speed access.

14 Classic Communications


Having emerged from bankruptcy in January, Classic is enjoying a fresh lease on life as a privately held company. Today, it is run by Cequel III, LLC, a St. Louis-based cable and telecommunications management firm. William Shreffler, formerly of Charter Communications, now serves as Classic's president and COO.
Under Shreffler's leadership, Classic has made considerable progress on high-speed data growth, adding a net average of more than 1,000 high speed data customers per month during 2003. Simultaneously, it is preparing a comprehensive campaign to upgrade systems, repackage products, and launch new services.
Classic has acquired the Kingwood Cablevision systems serving approximately 27,000 customers in the Houston suburbs, and in early August, it announced a definitive agreement to acquire and manage systems currently owned by Alliance Communications Partners, LP. This latest acquisition will bring Classic's basic subscriber count to approximately 430,000.

15 Bresnan Communications


Bresnan reentered the industry in 2003 with the acquisition from Comcast of nearly 314,000 subscribers in the Rocky Mountains region. Bill Bresnan, backed by a group of private investors, undertook the well-funded venture with an eye toward using the highly concentrated markets as platforms for further company growth. Bresnan views future acquisitions and clustering opportunities as part of the company's ongoing strategy.
In a two-year, $200 million undertaking, Bresnan is rapidly rebuilding and upgrading its Mountain States plant and introducing bundled suites of advanced services, including digital video, video-on-demand, HDTV and high-speed data. With nearly 950 miles of fiber plant, Bresnan will offer high-speed Internet service to more than 90 percent of homes passed and sees potential for additional interactive services.
Bresnan's new operations are considered well insulated from competitive risk and are in markets that have population growth rates above the national average.

16 Service Electric Corp.


Service Electric Corp. remains a family business with Margaret Walson as CEO. Her son John is president, and Edward Walson and daughter Rosalie Walter each head divisions.
Northeastern Pennsylvania and northern New Jersey are the company's prime territories. According to president John Walson, no major expansion plans are expected at this time.
Prime news derives from its Lehigh Valley Pa. territory, where new telephone services are expanding. Walson says this area is also seeing significant growth in the popularity of high definition services.
Walson is optimistic that major growth for HDTV services lie ahead. "Though the number of sets in use currently is small, I'm certain that the outstanding picture quality will drive the sale of many more units. And of course, as set sales rise, that should spur cable to produce an increasingly greater volume of high definition programming."

17 WOW


After joining the company in August 2002 as president/
COO, Colleen Abdoulah was appointed president/CEO of WideOpenWest, LLC in May. Since then, the company has focused its efforts on bundling high-speed Internet with cable, and has subsequently rebranded itself as WOW! Internet and Cable.
The overbuilder focuses on building relationships with customers by offering choice and value. These include three tiers of high-speed Internet ranging from 112 KBPS to 500 KBPS to 1.5 MBPS, along with advanced analog and digital cable services.
Abdoulah, who joined WOW last year, succeeds Mark Haverkate, who left in May to start Champion Broadband, which intends to operate the spun-off WOW system in Denver. That system, in Denver and Lakewood, Colo., serves some 2,000 customers.
WOW provides bundled tele-communications services to homes in Michigan, Illinois and Ohio over former Ameritech cable systems.

18 Tele-Media


Robert Tudek is optimistic that Tele-Media will meet its current goals just as it did last year. "During 2002," he said, "we successfully upgraded 87,000 homes, sites that now enjoy all the 'bells and whistles' including Internet capability, high definition television and telephony."
Current improvements affecting nearly 70,000 sites are well underway in a broad mix of Tele-Media systems including several in Florida.
Tudek also has pointed out that while Tele-Media's subscriber totals dipped more than 20,000 due to sales of Scottsville, Ky. and White House, Tenn. systems, the company remains on an expansion track.
"Not only are we not limited to our immediate territories, we are even looking beyond U.S. borders," he explains.
Indeed, the only negative Tudek foresees is navigating Tele-Media following the recent death of his business partner for more than three decades, Everett I. Mundy.

19 Armstrong


Armstrong's 2004 priorities center around improving customer satisfaction. New cable division president Jeff Ross said he is looking to accelerate customer growth across all product lines while introducing more choice and value.
Cable penetration has grown during the past three years to the mid-70-percent range. More than 30 percent of Armstrong customers have Internet service. Also, the company has launched a home networking service and recently partnered with VoIP provider Vonage to offer a telephony product. In addition, HDTV is available to more than 80 percent of Armstrong's customers.
Ross notes: "2004 will be a challenging year for our organization. Armstrong is 100 percent rebuilt and maintains some of the best cable plants in the country. That distribution system gives us the opportunity to anticipate our customers' needs, and allows us to deliver the level of service they demand."

20 Northland Communications


The decline in Northland's subscriber count derived from sell-offs of nearly 40,000 subscribers. It sold systems serving 22,300 subscribers in Bamberg, Aiken and Barnwell, S.C. to G Force LLC;. and systems serving 17,400 customers in Camano, La Conner, Port Angeles and Sequim, Wash. to WaveDivision Holdings Inc.
Now in its 23rd year, Northland Communications operates major clusters in Texas Georgia, North and South Carolina, Mississippi, Alabama, Washington, Idaho and California.
This year, the company is emphasizing its rollout of high speed access service, with an estimated 100,000 homes set to be passed by the end of 2004.
Digital tiers, first made available in 2001-2002, are now available to 90 percent of Northland's subscriber base.The company has no plans to invest in VOD or telephony anytime in the near future, according to chairman and CEO John Whetzell.

21 Susquehanna Communications


Peter Brubaker, president and CEO, expects steady subscriber growth to continue, particularly when Susquehanna's recently acquired Carmel, N.Y. site is fully online early next year. Then, Susquehanna subscribers should approach 240,000.
This year, Brubaker expects rebuilt systems in Williamsport and York, Pa. to enjoy continued growth, while major upgrading occurs at Lawrenceburg, Ind. and in Rankin County, Miss., a suburb of Jackson.
Although he'd like to see the company more geographically clustered, Brubaker says he'll pursue opportunities to acquire more systems "wherever they are, that make sense for us."
He anticipates adding telephone switching capabilities in and around Carmel by early 2004, enabling Susquehanna to break ties to RCN, which now provides the service.
Brubaker is also optimistic about eventually offering VOD and expects increased demand for HDTV.

22 Midcontinent Communications


Improving customer service remains a top management priority for Mark Niblick, president and CEO of Midcontinent Communications. "Driving our customer centric culture throughout Midcontinent is the best means to compete with other purveyors of video, voice and data services," he said, noting that training programs aim to keep customer care "top of mind" for all Midcontinent employees.
Midcontinent's marketing efforts take on satellite competition directly, reminding customers that digital cable doesn't require that a set-top be attached to each TV set in the home.
In the coming year, Midcontinent expects continued expansion of its HD rollout, and will closely watch VOD/DVR development. Goals for 2004 include reaching 60,000 high speed, 40,000 digital, and 20,000 phone customers.
Brubaker intends to remain a disciplined buyer if the right opportunity to acquire more systems occurs.

23 Blue Ridge Communications


Blue Ridge executives maintain they are well positioned to tilt against satellite competitors. "Our digital cable is much more appealing because it includes VOD and SVOD and we now offer HDTV," says general manager Mark Masenheimer. "In addition, we will be rolling out FOD and DVR by the end of the year, and as satellite providers roll out local channels in our areas, we are working to get direct studio feeds in order to greatly improve the quality of our pictures."
Masenheimer also reported that Blue Ridge has virtually completed the rebuild of its northeastern Pennsylvania systems.
Blue Ridge has moved telephony involvement further into its future, with work not expected to commence until 2004. It also has conservative expansion goals. Masenheimer says he'll consider "strategically positioned adjacent systems," but isn't looking further afield. Ongoing efforts educate customers and customer service representatives about company products.

24 Millennium Digital Media


"Millennium is continuing to focus on key priorities," said Kelvin Westbrook, president and CEO. "This means solid RGU growth, improved customer service and network reliability, increased penetration of new services and managing programming and other expenses." Millennium now has more than 833 miles of fiber optic lines throughout its system, and greater than 65 percent of its customers served by cable plant operating at 550Mhz or better.
Millennium's new product priorities going forward will be "high speed data, HDTV, digital and VOD/SVOD," Westbrook says, adding that he expects penetration of these new services to continue growing at a rate comparable with overall industry averages.
Millennium will also be looking for strategic acquisition opportunities, according to Westbrook.

25 Buckeye Cablevision


Buckeye Cablevision serves 135,000 homes in Toledo and Sandusky, Ohio. "Our focus this year and next is to take advantage of the technologies we've built into our 860-MHz Toledo system by rolling out high definition TV and video on demand, and continuing to nurture growth in Buckeye Express, our high-speed cable modem product, as well as in our digital programming offerings," said W.H. "Chip" Carstensen, Buckeye president and general manager.
The company is also completing an 860-MHz upgrade of its Sandusky system.
Challenges include a significant drop in premium subscribers since a year ago, an event Carstensen attributes to seasonal cancellations from University of Toledo students, aggravated by what he terms, "the worst levels of unemployment Toledo has faced in the last dozen years," and "increasingly tough competition from satellite providers." He expects to recover much of the loss once university classes resume in the fall.

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