Who Is Cablevision?

If you are in an area where Bresnan Communications provides service, Cablevision is the name of Bresnan's new owner. In a joint press release issued today, Cablevision Systems and Bresnan announced the acquisition by "a newly-formed subsidiary of Cablevision...in a transaction valued at $1.365 billion." This represents a majority stake in the company. No word appeared to be available today on what, if anything, Comcast was going to do with its 30 percent stake in Bresnan. The Cablevision acquisition should be completed by the end of the year, or early 2011.

There is no indication from today's announcement as to the name of the "new subsidiary", or whether Bresnan's name will change as a result. Thanks to resources like Wikipedia, I thought my limited writing time would be better spent on getting to know the new owner:

• Cablevision is the 5th largest cable provider in terms of subscribers. Most of these customers reside in the five states that generally make up the New York City metroplex.
• The company is publicly traded (CVC), and is headed by Charles F. Dolan and members of his family. They, along with other investors, have unsuccessfully tried to take the company private since 2005. Ironically, another Cablevision press release issued today outlined a new $500 Million stock repurchase plan.
• The company is a major player in both media and sports holdings. These include the Madison Square Garden, its sports teams (Knicks, Rangers, etc.) and cable channels, officially spun off from Cablevision in February but chaired by James Dolan. The company, which is headquartered on Long Island, also purchased the Newsday group of newspapers in 2008.
• The company appears to be willing to engage in contentious disputes over carriage and/or retransmission consent, including a dispute with two NYC area affiliates of ABC that deprived Cablevision subscribers of portions of this year's Academy Awards telecast. The company also refuses to carry NFL Network, reportedly over the exclusive rights to NFL Sunday Ticket programming currently enjoyed by DirecTV. No word now on any changes to the continued availability of NFL Network to Bresnan subscribers.
• Having most of your customer base consist primarily of New Yorkers naturally lends itself to no shortage of creative complaints, and Cablevision has been the target of many. This includes a website derived from that seemingly ubiquitous Internet presence, "(your nemesis here)sucks.com".

I'll try to find out more about these and other aspects of the sale over the next few months. Bresnan has been a largely honorable provider of television and telecommunications services to the Grand Valley and other parts of the western slope, and I don't think there's any reason to think that will change.

I believe at first blush that the Cablevision deal is better for the local consumer for two reasons:

1. Bresnan will now be owned in toto by at least two larger providers of these services in larger marketplaces. This will continue to allow for Bresnan to leverage economies of scale in obtaining programming, upgrading technology, and optimizing customer service. A note of caution is appropriate, however, regarding the aggressive retrans negotiation posture of the new owner.
2. These companies (Cablevision and Comcast) are publicly traded, thus returning Bresnan to the purview of the public investment marketplace. A similar note of caution is warranted regarding continued attempts to take Cablevision private in the future.

Best wishes to Bresnan employees for a smooth and hopefully painless transition. We'll be watching.

Bresnan For Sale

It looks like the 'exploration' of a possible Bresnan sale that I wrote about back in April appears to be coming to fruition, albeit quietly.

From Bloomberg:

Providence Equity Partners Inc. is seeking to sell broadband provider Bresnan Communications for more than $1 billion including debt, according to two people with knowledge of the matter.

The private-equity firm, based in Providence, Rhode Island, hired Credit Suisse Group AG and UBS AG to sell Bresnan, which has attracted interest from buyout funds and strategic buyers, said the people, who asked not to be identified because the information isn’t public. Bids are due in two weeks, one of the people said.

Private-equity firms are selling holdings after returning less money to clients last year than at any time since at least 2000. Providence took cable company Kabel Deutschland Holding AG public in March, raising 759 million euros ($929 million) in Germany’s biggest initial stock sale since 2007.

Bresnan, based in Purchase, New York, provides broadband- communication services in Montana, Wyoming, Colorado and Utah and is 30 percent-owned by Comcast Corp. Bresnan would give its new owner a slice of the burgeoning market for high-speed Internet services, whose revenue is expected to rise to $210 billion globally in 2014 from $164 billion in 2009, according to ABI Research in Oyster Bay, New York.

Founder Bill Bresnan, who repurchased the company in 2003 for $525 million with backing from Providence, died last year. Bresnan has increased revenue at a 15 percent annual growth rate and cash flow at a 20 percent pace since Providence took over, according to one of the people.

Julie Fisher, a Providence spokeswoman, didn’t return a phone call seeking comment. Doug Morris, a UBS spokesman, declined to comment, as did Duncan King, a Credit Suisse spokesman, and D’Arcy Rudnay, a Comcast spokeswoman.

It will be interesting to follow this as it develops, especially what Comcast might consider doing as they already own just shy of a third of Bresnan. Could GJ be "Comcastic" in the future? We'll see.

In the meantime, check out this recent story from the Durango Herald if you want a sample of how crazy the business of television can be. Hopefully the folks in Albuquerque will either acquiesce to Denver market stations in that section of their DMA, or will just go away.

Good night.

Telecom Tremors

Yesterday was a long day. I took a day trip to the Front Range, and while the drive was fairly pleasant on the way over, the ride back was snowy and difficult over the passes. It still amazes me how one can encounter such variations in weather and landscape over a three hour drive.

The landscape of telecommunications in Colorado and elsewhere has seen some unsettled, and perhaps unsettling, moments over the last few days. The first was the media reports early in the week that the private equity firms that own Bresnan Communications were exploring the sale of the company, a major provider of telecom, cable, and Internet services on the Western Slope. 

I found good reporting about this in the Billings (MT) Gazette. Bresnan has a significant technology and human resource presence in the Billings area. According to a media analyst interviewed for the story, Bresnan is “a valuable property for a couple of reasons..It has an established network to deliver services and...established customer relationships, which again is valuable for a potential acquirer."

I've written in the past, and some readers seemed to have affirmed, that Bresnan is largely dependent upon cable giant Comcast for the lion's share of their cable programming. While the aforementioned media analyst also asserted that "private equity companies are generally the buyers" of cable companies, one cannot discount the possibility that Comcast may be interested in expanding its already robust Colorado coverage area through a buyout of Bresnan.

Right now Comcast is trying to haul in a much bigger fish, NBC Universal. Should that sale not pass regulatory muster (it's encountered a lot of vocal opposition already), perhaps they'll want to revisit expansion of their core business. It's definitely worth keeping an eye on.

*******

Speaking of little fish and bigger fish, the acquisition of Qwest by CenturyLink (formerly CenturyTel) initially sounded to me like a piranha taking down a tiger shark. It seems that in telecom these days the leaner the organization, the more it is able to adapt and overcome obstacles similar to what the little ILEC (Incumbent Local Exchange Carrier) that could did today.

In truth, CenturyLink isn't so little; in their role as an ILEC they provide primary local phone service to a significant chunk of Colorado, surpassed only by Qwest in terms of area serviced. This includes the Collbran and Mesa areas of Mesa County. They swallowed up a competing ISP last year as well. Telecom analysts following the industry have taken notice of the company's growth over the last few years. 

The history of Qwest has been an interesting one, especially if you followed some of the moves that predated its creation. Philip Anschutz bought up railroads in the early 90's, so he could lay fiber optic cable along their rights of way, building a massive fiber network that Qwest was created to sell products and services over.

Along the way, they swallowed US West, became a real phone company, and perhaps bit off more than they could chew. Several consumer complaint cases and a financial scandal later, they are limping along, having been caught up with by other telecom providers who have also built out large fiber networks. 

Aside from the number of Colorado jobs that may go away as a result of the proposed merger, there is some light at the end of these cables. Less than 2 weeks ago, Qwest announced a new service initiative to link together traditional telephone networks with IP-based data networks. Yesterday, a friend on Facebook spoke briefly about a roundtable he attended in Boulder, concerning the transitioning of the state's 9-1-1 infrastructure to an IP-based platform. 

There's a lot happening out there, and CenturyLink seems to be positioning themselves to be on the cutting edge of it. Let's hope that consumer choice and competitive pricing aren't casualties of their largesse.

*******

It's pretty strange when a wireless telephone network goes completely down, even stranger (and disconcerting) when two of them have significant problems the same day. That was the case yesterday with Verizon, and to a lesser extent with AT&T.

The strange thing about AT&T's outage was that it appeared to affect only their 3G data network, but for many iPhone users (including my son) this meant that the phone woudn't work. According to anecdotal reports from social media sites like Facebook, many whose iPhones weren't working figured out that if they changed their network settings to shut off the 3G portion, the phone started to work again. This was not reported in the media like the Verizon outage, so it's impossible to tell how widespread the problem was.

*******

Telecommunications as an industry is integral to our society's ability to function. The lines between telephone, television, and data transmission are blurring to the point that all three can and do travel down one pipe. Watching how that one pipe, or set of pipes, are maintained, marketed, and mold themselves into a responsive element of the communities they serve is not only the job of the government, but also of every consumer who values choice in TV content, reliable and economical telephone service, and an uncompromised, neutral Internet.

Let's hope that things settle down a bit from this week, and all that's left is increased diligence and resolve on the part of all of us to assure that these services are provided in a manner that enables all of us to communicate, collaborate, and thrive.

Have a great weekend.

On the Cusp of Comcast

Several stories in the national and regional media of late have brought attention to the changing operations of Comcast, the cable and media conglomerate currently providing cable TV service to over 23 million households nationwide.

Comcast enjoys a significant presence in the Denver metro area, providing high speed Internet services to homes and businesses, as well as digital telephone service, in much the same fashion as Bresnan Communications does in many areas of the Western Slope. A story one week ago in the Denver Post got my attention, and had me asking questions:

Comcast plans to stop providing more than 40 cable channels in analog format by year's end, including ESPN and MTV, a change that will allow the cable giant to add high-definition content but could force hundreds of thousands of Colorado customers to install new equipment.

Subscribers to Comcast's extended basic cable tier and above will need a digital set-top box to view the channels that are being switched to all-digital signals.

Customers who want to watch those channels on more than one television will have to install digital adapters on each additional set. Comcast will provide a set-top box and two adapters free of charge. Additional adapters will cost $1.99 per month.

I am a Bresnan subscriber. I have one TV with a digital set-top box and DVR; the rest of the TVs in the house are hooked directly to cable, and use their analog tuners to tune to the desired channel. I started noticing several channels disappear into static on these TVs last year; Hallmark Channel and Ion are a couple of examples. They are only available through the digital tuner that's part of the set-top box.

The move by Comcast in Denver removes many more cable networks, including some of the most popular ones, from the realm of analog transmission over a cable system. Aside from using a set-top box or digital adapter, the only way to watch these is through the digital tuner of an HDTV.

This is the wave of the future, and not entirely unexpected. Since analog over-the-air TV broadcasting went away last June, the cable industry has begun to address those analog transmissions of digital signals that are eating up bandwidth, and preventing the industry from putting more channels, choices, and potential revenue sources along that same bandwidth.

If you would like a compressed version of this, look at the last 25 years since wireless mobile telephones hit the market. At its infancy, these systems used the "brick" analog radios that used one channel per conversation, making for a comparatively inefficient use of spectrum. Now all conversations are digitized, and through digital signaling and routing schemes several conversations can simultaneously share the same radio channel.

Digital television does the same thing; multiple channels of content can be transmitted over the same digital signal. KKCO has used this capability to broadcast uninterrupted coverage of major news events, such as visits by President Obama. By moving most channels in a cable system to a digital format, the available space to put more content down the pipeline increases significantly.

I've known for some time that Bresnan enjoys a business relationship with Comcast on more than one front. Comcast Spotlight, the advertising sales arm of the company, handles cable advertising for Bresnan, and for a while had an office here. It looks like they're handling everything from one office in Denver now. When you see those commercials for Comcast channels that you can't get here, or ads to help support an animal sanctuary in the Grand Junction "suburb" of Brighton, that's Spotlight at work.

In trying to confirm what I remembered about other Bresnan/Comcast collaborations, I contacted Shawn Beqaj, Bresnan VP for Public Affairs. Shawn takes the time to answer questions from an otherwise inconsequential amateur, and I greatly appreciate his time.
Mr. Beqaj had this to say to my question about their relationship with Comcast:

You are correct in that Bresnan has a relationship whereby we get much of our programming under an umbrella agreement with Comcast. As you can imagine those agreements preclude me from discussing specifics but I can say that they are predominantly for traditional cable networks and not local broadcasters. Bresnan has migrated some of our markets to an all digital format but there are no immediate plans to do so in GJ (emphasis mine).

He also added the following about the migration to all-digital technology:

The driving issue is efficiency whereby a customer can receive many more channels of higher quality over the same bandwidth in digital format than analog. Much like tube than transistor radios were displaced by digital sets, the migration to digitally tuned TV sets is progressing and the consumer electronics marketplace is progressing with television set technology that will allow users to have true two way functionality with a TV and no set (top) box.

Having had experience with Comcast in both the Pittsburgh area and New England, I am familiar with the cost of their services and the capabilities they offer. I like the additional channel choices, especially the local access channels, which while as much a responsibility of local government to provide for in franchise agreements are nonetheless well-supported by the cable provider in many cases. Comcast also has many detractors. If you Google "Comcast Sucks", you'll see what I mean.

Last week also marked congressional hearings into Comcast's purchase of NBC Universal, which has raised the hackles of consumer organizations and media watchdogs. Senator Al Franken leveraged his knowledge of the business through his previous employment with NBC into quite the watchable program.

The company is sensitive to both criticism over the merger and damage to their brand by the numerous customer service complaints that both originate from and are strengthened by consumer word-of-mouth. In what could be called taking a page from Blackwater's playbook, Comcast recently announced the creation of a new brand name for the bulk of its digital services.

Regardless of what side you may find yourself when it comes to the subject of media consolidation (I think it's a problem), if you are a media consumer anywhere in this country and elsewhere, Comcast will be in your living room in some capacity if the NBC deal goes through.

The revolution of digital transmission will inevitably continue to make its way through the various ways that all information is sent between two points, be it data, video, or audio. In the near future, I'll be outlining another significant change coming to the Grand Junction area, how it affects citizens, and how to prepare for it.

Have a good week ahead.

Bresnan Outage - Update

Over the course of the last week I had the opportunity to speak twice with Shawn Beqaj, Vice President of Public Affairs for Bresnan Communications, about last Thursday and Friday's outage that affected every Bresnan Internet and phone service customer. Every single one.

Mr. Beqaj is a very good P.R. person. He is accessible, gracious under pressure, exceedingly competent in the nature of his company's activities, and sufficiently vague when he feels he needs to be.

We spoke first about the stated root cause of the outage last week; the corruption of DNS routing tables on one of their servers that in turn sent that corrupt table to all other routing servers, resulting in what is called a broadcast storm that crippled the network.

Mr. Beqaj stated that this problem was not the result of any hacker activity.

I then asked about the relationship between Internet routing and the provision of phone service, and my concerns that the Internet was not as stable and secure as more traditional methods of telephone system connectivity.

Mr. Beqaj replied that Bresnan uses what is called a soft switch to provide dial tone and other services to its telephone customers. These switches are the bridges between what is the essential core elements of legacy circuit switched telephone networks, which use dedicated circuits for each connection made on the network, and packet switched networks, which leverage multi-modal transmission capabilities to send call traffic, along with data and other media, as packets of data that are assembled and disassembled at the server level, before being sent to their respective destinations.

Boy, was that a techie mouthful or what?

Having a basic understanding of these types of switches, I understood where Mr. Beqaj was coming from. He said that Bresnan holds itself up to any Incumbent Local Exchange Carrier, such as Qwest, with regard to the serviceability and reliability of the products and services they provide. Mr. Beqaj also stated that it was "inarguable..that redundancies in place didn't operate as anticipated" last week.

With regard to the notification of 9-1-1 centers about outages, Mr. Beqaj said that different states have different notification requirements, and that he was unaware of the exact requirements or the varying nature from state to state. He did say that Colorado has the most stringent requirements of the states that they serve. These requirements are available here.
I did verify with the PUC that the outage was reported to them as required.

I also received several e-mails regarding the earlier post about this outage, at least two from people who seem to have a greater degree of knowledge about these systems than the average person. Like so many that are already out on the web at places like DSL Reports, these posts put forth ideas about allegedly reliable backups for DNS routing and 9-1-1 availability, none of which I can independently verify or confirm based on my own knowledge, so they're not appearing here.

Mr. Beqaj displayed little patience for some of these assertions, stating in an e-mail that "..it isn’t productive to enter into a public debate on network architecture among laypeople". He also asserted:

"Bresnan’s engineering team are among the best in the business and what’s more, the more than $1.3 billion we have spent in the infrastructure of our Rocky Mountain footprint is proof positive that this person’s insinuations are not only wrong but offensive as well."

I've worked long enough around technology to know that the most expensive systems are not necessarily the most reliable, especially if they were built for any other purpose than to optimize service to the end user. I've seen expensive trunked radio systems go up to fulfill the ego of a system administrator and the sales quota of an account executive, only to see the system scrapped well short of its intended life because it couldn't serve the needs of the public safety professionals on the other end.

This isn't to say that the Bresnan network is a boondoggle; on the contrary, the company is normally very professional and reliable, with products and services that are responsive to the customer's needs and/or desires, to the extent that applicable law and competent business practices will allow.

I do think that I pay too much, and that services should be provided with more choice available to the subscriber, For example, please deliver me from HSN, QVC, and the Jewelry Channel. I'll take Free Speech TV instead.

I'm expecting that service delivery and reliability will improve significantly in the wake of this incident, but to quote Mr. Beqaj, "the smartest, best system engineers never speak in absolutes". I'm hoping that makes them Jedi Knights, while the bean counters, who know that 2+2 = 4, are the Sith Lords.

Nevertheless, I'm making sure that the Colorado PUC is informed of my experience with this outage, and what I would like to see happen in the future. This includes:

• Complete disclosure of the nature and cause of the failure, the corrective actions taken to address it, and what preventative measures that are planned or underway.
• The nature of contingency plans to allow for the protection of critical infrastructure and provision of 9-1-1 service, as well as telephone access to customer service and network operations personnel.

Thanks to Shawn Beqaj for his accessibility. Have a good weekend ahead.

Bresnan Outage - It's Personal

I'll try not to get too deep into the massive outage that deprived Bresnan Communications subscribers of Telephone and Internet service for the better part of 16 hours (at least in Grand Junction) on Thursday and Friday.

Shawn Beqaj, Bresnan's Vice President for Public Affairs, was a very busy man Friday, fielding comment requests from media outlets all over the Mountain West. From speaking with him previously, I know that his company is very concerned with providing efficient and reliable service, and I appreciated his candor when he detailed the root cause behind this week's problem, which related to a "corrupt routing table" on one server that cascaded to others.

I'm no IT or networking professional, but I would be interested to know if this outage was the result of hacker activity, or something else. Is it coincidental that the outage affected two of the three areas where the President is scheduled to visit? How's THAT for a conspiracy theory? Perhaps I should start making signs and listening to KNZZ. Scary...

Seriously, when dealing with a problem like this, the process surrounding the mitigation and resolution of the problem, especially as it relates to the people affected, is as equally important as any technology component that may need to be repaired. With that, I was concerned that NO local broadcast media were apparently aware of the outage when it started, or didn't think it worth mentioning as part of their Thursday evening reporting.

A friend on Facebook brought the lack of phone service, but the availability of cable TV, into real perspective on Friday morning:

Only the most life-and-death commodity they offer. If I have a medical emergency, I will die slowly, but be able to watch "Housewives of Atlanta" as I go.

I believe that any interruption of phone service is a serious matter, especially given the number of Bresnan phone service subscribers who have bought into the "reliability" message as put forward by Bresnan in their advertising. I've caught Bresnan in the past doing late night "scheduled maintenance" on their Internet and phone systems, and have let their customer service have it for not making subscribers aware in advance.

Considering the duration and scope of this particular outage, and the seeming lack of notification through the media or other means, I contacted Kate Porras, PIO for the Grand Junction Police, which also operates the county 9-1-1 center. I was curious if they had received any formal notification from Bresnan of a major outage, and if so when that notification was made.

Kate responded that the 9-1-1 center was advised on Thursday evening, but couldn't elaborate on the manner in which the notification was received, i.e. from a citizen or via a Bresnan network operations person. At about the same time as Kate spoke with me, the GJPD issued a press release that provided some rudimentary instructions for people who had no phone service and needed help.

Yes, many of us had backup in the form of cell phones, neighbors, etc. should the unthinkable have occurred during the outage. Nevertheless, I am concerned about the seemingly cavalier attitude taken by Bresnan regarding a service that is largely perceived by the public as reliable and available in the vast majority of circumstances. The same might be said for our local emergency services, who while aware of the interruption took no apparent action to inform the public until asked about it.

I'm curious as to why a corrupt routing table for a DNS (Domain Name System) routing server would compromise a telephone switch, supposedly located here in Grand Junction, which is connected through what is known as a CLEC (Competitive Local Exchange Carrier) to the PSTN (Public Switched Telephone Network). That's about as techie as I am willing or able to get about it, but if I find that my landline phone service is in any way dependent upon the Internet to establish connectivity, I'm going to get serious about a service change.

I think that Bresnan is going to need to do some serious follow-up with its customers. Some in the social networking cloud are calling for a credit to their bill, and I think that's reasonable. I'm hoping to hear back from Bresnan regarding some of my questions and concerns, and I'll post an update when I get it.

I'm also going to do some research through the Colorado Public Utility Commission on what resources are available through the state agency that is responsible for regulating and monitoring the activities of Telecommunications services providers doing business in Colorado.

I would have done this before posting, but as luck (?) would have it, the PUC's servers are down.

Looking forward to the President's visit this afternoon. Have a great weekend.

ADDENDUM, Sat. 8/15 10:30 AM - The PUC website is back up this morning, and has a comment and complaint page with an associated form. These pages include telephone numbers to contact the commission as well.

According to the PUC website, their jurisdiction in a matter such as this is limited to the provision of basic telephone service.