Fellow un-scripted cable programming fans... it’s time! It’s time to let the world know that you did, in fact, stay up until 1 AM watching MTV’s Run’s House marathon last Tuesday. It’s time to admit you always think the well-meaning couple should have gone with house number one in HGTV’s House Hunters. It’s time to stand up and say “Yes, I’m addicted to E!’s The Girls Next Door!”

But why the sudden emphasis on the shows we’ve been watching on cable programming? With production halted on many broadcast primetime-favorites due to contract disagreements between the Writers Guild of America (WGA) and the Alliance of Motion Picture and Television Producers (AMPTP), television viewers are looking beyond the “Big 3” broadcast networks for entertaining programming options.

There was plenty of news concerning television and cable networks at CES this year, as there was a clear new emphasis on content and programming. But outside of the cable arena, there were several other trends that revealed themselves in consumer electronics. From a new focus on “green” technologies, to the electronic crusade to the car, to what may finally be the end of the war between Blu-Ray and HD DVD, CES 2008 will be one that may be remembered for influencing the electronics industry for years to come.

... a tradeshow booth with a Dish!

It's hard to ignore the TVs that are on display at CES, and until now I've been doing just that. However, there is some big news regarding television technology that debuted at CES this year. It's my final day on the show floor, and today I'm focusing on doing some technology wrap-ups.

The biggest news, literally, is the 11-foot, plasma prototype that joined Panasonic President Toshihiro Sakamoto onstage for his keynote address Monday. Later, after seeing it in the Panasonic booth, it was clear that whatever was playing on the screen was hardly suitable for such a massive display. At a resolution of 4x 1080p, it's a very stunning display. Last year, Panasonic displayed a retail 103-inch plasma display. Since, they've managed to sell over 3,000 of the 103-inchers, at a price of $51,000 each.

Panasonic isn't the only company showing off its new tru2way-capable products; a quick trip around the show floor at CES along with a little bit of searching revealed many new components that are very close to hitting store shelves.

LG and Samsung each had a couple of televisions on display, all in the 40-57" range, much like Panasonic's offerings. Finding them proved to be a bit of a challenge, however, as none of the associates in the booths seemed to know anything about tru2way or OCAP. This is not completely unexepected at a show prone to 11th-hour announcements of emerging technologies.

The TV Guide booth had a display of its j-Guide, a rich java-based display that conforms to the OCAP standard. TV Guide also seems in need of the memo, as all of their signage still referred to Open Cable, rather than the rebranded tru2way.

On hand at Microsoft was a CableCard equipped device that interfaces with Media Center PCs. No tru2way capability was on-hand, but the associates were aware of the recent announcement and said products were currently in development.

by Tony Brown, a junior at the University of Missouri

Brian Roberts, CEO and President of Comcast, took the stage yesterday in the first keynote address to the assembly from a cable company chief in the entire 41-year history of the CES. Riding on the coattails of Monday's keynote by Panasonic President Toshihiro Sakamoto in which the Roberts made a cameo to announce new tru2way devices, Roberts' Tuesday speech highlighted Comcast’s plans for implementation of DOCSIS 3.0 and delivery of more HD content.

"The age of the closed, proprietary set-top box is behind us," said Roberts, who, like others, says open source development must be a priority for the electronics industry. The new tru2way technology will allow consumers to go to a retail store, purchase a new component such as a DVR or set-top, bring it home and plug it in, "and expect it to support all cable interactive services," Roberts said. He reminded the audience that the cable industry learned a great deal about how open-source stimulates innovation and consumer adoption with the development of the cable modem, based on the old DOCSIS standards.

Yesterday morning's CES keynote with Panasonic President Toshihiro Sakamoto brought big news to the world of cable with the announcement of Panasonic's new line of HDTVs and set-top boxes integrating tru2way technology. Joined onstage by Comcast's CEO, Brian Roberts, Sakamoto said, "Panasonic will not only deliver a Panasonic Viera Plasma HDTV with tru2way technology later this year, we are also announcing the first portable DVR and digital cable set-top boxes powered by tru2way technology, all of which truly allow consumers to maximize their enjoyment of digital cable television programming.”

The Viera televisions equipped with tru2way will eliminate the need for a set-top box and will eliminate clutter and confusion that stems from multiple components. The Viera Plasma HDTV is expected to be available at retail later this year.

Also announced was a portable DVR which will allow users to record programs at home and then watch them later, acting like a portable DVD player. The tru2way device has a fold-up 8.5" screen and speakers, and docks with a set-top box. Named the AnyPlay, it is expected in Comcast markets in early 2009.

I personally like the idea of the portable DVR, though I doubt people will choose a large portable DVD player-type device over the smaller pocket-sized digital media players they most likely already own. However, it's not hard to imagine the technology spurring a new movement in bridging the gap between those smaller media players and the home DVR.

by Tony Brown, a junior at the University of Missouri

Talk of open development was a hot topic today, with everyone from Jerry Yang of Yahoo! and Rob Stoddard of NCTA to the editors of CNET calling open source development and new industry standards the keys to creating more useful and marketable consumer electronics.

Yang’s keynote address highlighted the release of Yahoo! Go 3.0, the site’s software offering for mobile phones. In it, he explained that leaving Yahoo! Go open sourced was imperative to the continued development of the software. “Having the ability for third party software to interact with Yahoo! Go makes it easier for users to receive relevant content,” Yang said.

Yahoo! Go offers widgets to perform many different tasks, including eBay, MySpace, and MTV News integration. The hope is that software developers and other websites will develop software to work with Yahoo! Go and ultimately make the Internet more efficient and useful to consumers on mobile phones.

In a CNET-hosted panel titled “The Next Big Thing in CE,” Stoddard, along with George Kliavkoff of NBCU agreed that open-sourcing and creation of (and conforming to) industry standards would allow consumers to integrate different technology components with ease. In a discussion about the future of content delivery, both agreed that portable devices must be able to connect to televisions, computers, and DVR set-tops and share content without limitation. One of the major current limitations of programming that is available online is that it is unable to be transferred to mobile devices, they said.

by Tony Brown, a junior at the University of Missouri

Bill Gates officially launched CES 2008 with a Guitar Hero duel against Velvet Revolver guitarist Slash, yet attendees were most likely more impressed with the product demos in the Microsoft front man’s keynote address. In his final of eight consecutive CES introductions, Gates spoke about how content and software will define what he calls “the Next Digital Decade,” and showed off new levels of device interconnectivity and user-centric experiences that always seemed to be just over the horizon. Yet suddenly they’ve arrived.

I came into this year’s show expecting Sync, the Ford Motors and Microsoft partnership in mobile integration, to be the buzz on the floor and a major part of Gates’ address. However, the Sync demonstration was merely a thread of Microsoft’s envisioned blanket of interactive interfaces and entertainment devices. From the web-based Silverlight interface that will help NBC provide the “most most comprehensive broadband coverage of any event, ever” during the 2008 Beijing Olympics, to the continued development of the Xbox 360 platform as a central device in home entertainment and content delivery, Microsoft seems to have all bases covered.

I knew I should have paid more attention in typing class. It seems like I’m always getting "fat fingers" and typing the wrong thing in the Internet Explorer address bar. www.cox.com usually ends up www.cox.con and so on. The good thing is that my Internet service catches these mistakes and sends me in the right direction.

Cox calls this Enhanced Error Results – but not everyone likes it. Some argue that it interferes with their Internet experience. Here’s how it works: when you type in a misspelled Web address or simply a keyword in your browser bar, the network attempts to find what you’re looking for online, but if the information you typed is not resolveable to a valid URL, you see a results page with choices. More often than not, the Web site you were looking for is right there, just a click away. This option is presented along with results from sponsors who pay to have their links provided alongside the search results. This is really no different than seeing sponsor ads when you Google “new movie releases.”

Because not everyone likes this service, Cox makes it easy for you to opt out – even providing step-by-step instructions online. Personally, I’m keeping it – it keeps my fat fingers from interfering with my Internet experience.

Congrats to CableLabs! It’s another sign that collaboration truly pays off. CableLabs, the cable industry’s non-profit research and development consortium, announced this week that its awarded “qualification” status to DOCSIS 3.0. What does that mean for the customer? This opens the door to even faster Internet speeds and a broader variety of services that can be offered over cable’s broadband network.

According to CableLabs experts, DOCSIS 3.0 specifications enable “downstream data rates of 160 Mbps or higher and upstream data rates of 120 Mbps or higher.” In the CableLabs release, Cox President Pat Esser is quoted as saying, “This DOCSIS 3.0 specification is yet another example of how cable is continuing to advance the power of broadband. This technology ensures that our customers will have access to the fastest and most robust Internet service available and allows us to introduce a new generation of advanced service offerings to our customers.” Click here to read the full CableLabs announcement.

We couldn’t be prouder of our leader, Pat Esser, who is named as the first Executive of the Year by Multichannel News in this week’s issue. The caption on the caricature of Pat says it best, “Recognized for outstanding leadership and corporate management, the Executive of the Year demonstrates that success in the marketplace is achieved by putting customer satisfaction front and center and that by focusing on customer service, a company also serves its employees, investors and the overall industry.”

Pat is prone to describing himself as one of the luckiest guys in cable, but we all know that the “luck” is the sum of opportunity and preparation. While Pat entered the industry as an average communications graduate from the University of Northern Iowa, he has consistently positioned himself to meet opportunity (like when he packed up all of his belongings into the back of his car to try and get a job with Cox in Virginia). His preparedness is second to none. As detailed in the story, Pat spent his first 60 days as president interviewing Cox employees to talk about what they expected of him and the company. Pat understands that listening is an essential ingredient in leading.

Perhaps the best thing about Pat is that, at work, he’s just another member of the team with a contagious excitement for the possibilities ahead.

Have you been to a Wal-Mart lately? If so, Wal-Mart’s latest in-store adventure, “Connection Centers,” might have caught your eye. It’s a consumer-electronics experience, backed by specially trained Wal-Mart employees who are there to sell popular home electronics products like high-definition television, telephone and broadband Internet services. And there we are, Cox, inside the nation’s largest retailer, showcasing our bundle of Internet, video and phone services and making it even easier for consumers to connect their new high definition televisions, personal computers and more to Cox services. And with more than 140 million consumers nationwide visiting a Wal-Mart store every week, this translates to LOTS of HDTV’s being sold. So, yes we are elated to have our services located in the same spot that consumers make their electronics purchase. Talk about convenience. Now, Wal-Mart shoppers can go home complete: A new HDTV, an extra surge protector from aisle #7 and a bundle of Cox services to enhance their home communications experience (and save some money too). It’s the Wal-Martization of Cable and it’s long overdue!

With the number of HD channels rapidly increasing at Cox and in the spirit of anticipated benevolence bestowed upon budding home entertainment aficionados this Christmas, we decided to do a quick analysis of the most popular HDTV options in the market.

LCD (liquid crystal display) and Plasma flat screens are the most debated options, but microdisplay rear projection televisions, such as DLP (digital light processing, manufactured by Samsung, Toshiba, Mitsubishi, Panasonic, LG, RCA), LCoS (liquid crystal on silicon, manufactured by Sony, JVC and Brillian) are another great HDTV option. These TVs aren’t thin enough to hang on walls in most cases, but they have a small footprint, 15 inches deep on average and are relatively lightweight.

Cable often gets a bad rap for customer service, but recently Arizona State University’s business school recognized Cox’s customer service achievements. Over a decade ago, as Cox transitioned from a cable company to a multi-service telecommunications provider, it became clear that the best way for us to compete was to make sure all aspects of our business focus on the customer first. Cox invested in training for customer service, and training remains a key priority for our company today. So while we all can get a laugh out of the hijinks in the 1996 movie The Cable Guy, we work hard everyday to make sure that plot line remains only a work of fiction for our customers. To read more about Arizona State’s write-up on Cox’s customer service, click here.

Last week the Associated Press reported on AT&T’s 4-hour DSL outage which impacted their customers across the Southeast on December 3. We don’t usually use this forum to discuss our competitors’ network outages. An outage can happen to an telecommunications company for a variety reasons ranging from simple human error to technological failings and natural disasters.

What brings us to mention this on Digitalstraighttalk.com are reported comments made by Dave Burstein, editor of the industry newsletter DSL Prime who said that broadband outages are not unusual. He is quoted, "Broadband goes down much more often than telephone lines because they didn't build the system for the same level of reliability. We do not know how often it happens, however, because they're not obligated to report it."

Cox employees and customers in Southern California have been in the thick of things this week as the destructive wildfires have torn through communities. We can’t help but think back to our family of employees and customers in New Orleans who are still working to rebuild after the devastation that was Hurricane Katrina.

Cox teams have been incredible in maintaining and repairing the network, focused on keeping customers’ services operating and communities connected. As large a task as this might seem, especially for employees who are reporting to work while evacuated from their own homes, many are still finding time and the courage to volunteer. Many have helped their neighbors by placing temporary phone, wireless and TV services in several evacuation centers.

Thanks to those in the world of new media for taking notice, including zatznotfunny.com: “Everybody loves to hate their resident cable/telephone company, but the network operators are stepping it up in San Diego to help people where they can in the fire crisis.” As a full-service telecommunications company, our services are absolutely vital, providing connectivity to individuals, families, medical institutions and, in many communities, first responders. And when a period of crisis passes, there is nothing quite like the feeling of normalcy that comes from the simple act of kicking back and watching TV (or surfing the Internet). We take our role as service providers and neighbors seriously. Our thoughts and concern are with everyone affected by the disaster.

It’s a sad day around Cox Communications. Long-time president and CEO Jim Robbins, who retired at the end of 2005, died last night at his home in Massachusetts after a battle with cancer. Jim was known as a cable-industry pioneer who drove Cox, and in many ways the whole industry, into a new competitive era by launching telephone and high-speed Internet services over the cable TV infrastructure. He was also among the first to insist on customer care standards in the industry, stressing long before cable was a multi-service business that customer loyalty would be key to the industry’s future ability to meet customer demands.

At Cox, Jim was revered for not only his professional accomplishments, but his personal traits – his devotion to his wife, Debby, and their three daughters… his sometimes-gruff-on-the-outside-but-always-warm-and-compassionate-on-the-inside demeanor… his affinity for wearing rumpled hats and fleece vests… and his frequent use of Naval terms, even decades after serving in Vietnam. Jim was at the helm of the company when it went public in 1995 and nearly doubled in size after a big acquisition. As the company grew rapidly in number of customers and employees, Jim still insisted on knowing employees’ first names, and he related with all of us in a refreshingly rare sincere way. He will be sorely missed. [Click here for more about Jim.]

For over a decade, Cox has been delivering more than just cable TV services. A report from Vertical Systems Group demonstrates how much things have changed in that decade. The network market research firm reports that, via Cox Business, Cox is the first major cable company to reach the top tier of U.S. business Ethernet providers (notably, AT&T lost ground in this segment). Here is a Telephony article about the highly competitive Ethernet marketplace.

The secret sauce of the Internet is “IP” (short, of course, for Internet Protocol). IP is the fabric upon which the whole Internet ecosystem is based. Fortunately, as complex as the Internet Protocol is, it’s largely transparent to end users. But as network engineers are aware, the predominate version of the Internet Protocol in use today is version 4, commonly written as IPv4. However, IPv4 can only support 4.2 billion unique addresses, a painfully small number given the explosive growth of the Internet and IP connected devices. IPv6, the version to succeed IPv4, allows for a nearly infinite number of addresses.

It appears that IANA, the International Internet authority that doles out addresses to the regional registrars, will more than likely run out of IPv4 address allocations to the registries somewhere in the late '09 or early '10 timeline. However this does not imply that there won't be any space left to distribute. Most operators that we have spoken with place a realistic 'red zone' date in the 2011 time frame. Of course IPv4 is not going to just miraculously disappear or be mass converted to all v6 addresses within the next decade. We will be dealing with the support of v6-only devices, v4-only devices and dual-stack devices for a very long time. I asked one of Cox’s ace engineers, Jason Weil, to summarize what this will mean for cable operators, and here's what he told me:

Sprint Nextel has dropped out of a consortium with cable companies created to bid on wireless spectrum. A news report or two this week erroneously confused that venture with the company’s other cable JV. Be clear: Sprint’s spectrum decision has nothing to do with and does not affect Pivot, the mobile telephone service offered through a separate joint venture with several cable companies, including Cox.

Jeff Baumgartner reported (correctly) on the spectrum announcement in Light Reading’s Cable Digital News :

Sprint's involvement in SpectrumCo has been limited from the get-go. It did not participate in the auction, but did serve as a member of the bidding consortium. It held a non-voting 5 percent equity stake at the time the SpectrumCo partnership was formed. Sprint's withdrawal will allow it to recoup its investment. Sprint said it is withdrawing from the spectrum consortium so that it can focus on "primary strategic initiatives" with the cable industry, which includes the "Pivot" cellular service joint venture with Comcast, Time Warner Cable, Cox, and Bright House…. "This action has been long-planned and the withdrawal from participation in SpectrumCo does not reflect a change in strategy or focus," the company said in an emailed statement. "Sprint Nextel and its cable partners remain committed to their current initiatives, including Pivot."

Cox’s 2nd quarter highlights included the lowest customer churn (2.5%) in company history. (Here’s some media coverage of the announcement and here’s the official Cox release.) It’s a testament to the power of a “bundle” of services, even in the face of increasing competition. Another highlight is that, by selling multiple services into single homes, the company’s subscriber gains in the past year have more than made up for the loss of customers due to the company sale of cable operations representing about a million subscribers to Cebridge Connections last year. Overall, more than 60% of Cox’s roughly 6 million customers subscribe to at least two of the three major services, and bundled customers increased 11.9% over 2006. Speaking of the bundle, Cox will celebrate a full decade of delivering the bundle of cable, phone and high-speed Internet next month. It was September 1997 when Cox launched telephone in Orange County, Calif., completing the bundle and becoming the first major provider to commercially deliver cable, phone and high-speed Internet over a single broadband network.

The U.S. Senate Commerce Committee addressed Internet safety in a hearing today about protecting children online. In opening remarks Committee Chairman Daniel Inouye (D-HI) referred to the “distinguished and lovely panel” – apparently directed in particular to one of the five panelists, Miss America 2007 Lauren Nelson. The central thrust of testimony was the importance of educating parents, students, teachers and school administrators on encouraging safe online use, rather than relying only on technology tools. Sen. Mark Pryor (D-AR) asked if parental controls and filtering tools are the answer. Panelists agreed they play a role in protecting children online, but aren’t the silver bullet. Sen. Jay Rockefeller (D-WV) seemed more dismissive of parental control tools, remarking earlier in the two-hour hearing that “blocking doesn’t seem to work.”

What would seem to work, the witnesses and Senators generally agreed, is making Internet safety education a mandatory part of computer education for all children. Cited as a model is a Virginia program incorporating Internet safety into the school curriculum. Lan Neugent, Assistant Superintendent for Technology and Human Resources with the Virginia Department of Education, remarked that “Internet safety cannot be covered in a single lesson or unit or by using a single program or resource…. It must be integrated into the curriculum as part of a teacher’s daily practice.” He also cited several other elements that must be in place for Internet safety programs to operate effectively: technical assistance, professional development for teachers, and implementation monitoring. Clearly understanding the direction of the hearing, Sen. Bill Nelson (D-FL) announced his intention to offer legislation establishing a grant program to fund the development of online safety courses.

This Los Angeles Times editorial takes a swipe at the telcos for hiking fees on custom calling features:

AT&T and Verizon wasted little time taking advantage of the freedom that the California Public Utilities Commission granted them in August. Unleashed from regulations that limited how they priced many of their services, California's largest telcos quickly hiked the fees they charged for many of their custom calling services, such as caller ID and call waiting. The phone companies had argued for unlimited "pricing flexibility" by pointing to the many phone lines they were losing to rivals, such as cable TV operators. They also said allowing them to respond quickly to competitors' promotional offers would (in AT&T's words) ensure that "customers reap the full benefits of competition."

Cable companies rank highest in telephone customer satisfaction in all six U.S. regions, according to J.D. Power and Associates’ latest study. Cable completely beat out the traditional telcos for the first time. Cox Communications is again tops in three of six regions, while Bright House, Cablevision and WOW! each top a region. Verizon, AT&T and Qwest were shut out at the top of all regions.

The study measures telephone customers’ satisfaction with their local and long distance providers in six major areas: performance and reliability, customer service, billing , image, cost of service, and offerings and promotions. The findings underscore the critical importance of bundling for service providers.

How safe are teens online? The delegates at Cox Communications' 2nd Annual National Teen Summit on Internet Safety, held yesterday in Washington, D.C, addressed that and many other questions regarding how teens use the Internet. Judging from the discussion at the Summit and in the delegates' meetings with several lawmakers, including Senate Majority Leader Harry Reid (D-NV), these 14 teens are a safe and Internet savvy group, although most of them expressed that they have peers whose online behavior is potentially risky. They added that parents should be particularly concerned about younger kids’ Internet use and that it’s never too early to discuss the importance of Internet safety with youngsters. Hosted by children’s advocate and TV host John Walsh and Miss America 2007 Lauren Nelson, the Summit will air on Cox Cable channels starting later this summer. The eye-opening dialogue also included the teens’ parents, who participated in their own discussions and in Internet safety and media literacy training conducted by Netsmartz and Common Sense Media. Afterward, at a press briefing in the National Press Club, Walsh and Nelson were joined at the podium by one of the teen participants, Christina Johnson (above, with Nelson), who represented her fellow delegates in answering questions from the media and other guests and advising the adults on Internet safety from a teen's perspective. For more on the Summit, click here.

Multichannel News reported that a bill has been introduced on Capitol Hill that would force cable operators to create a family-friendly programming tier, comply with existing federal indecency rules for broadcast stations and/or rebate customers who have blocked channels in a tier. This legislation would seem to force a version of a-la-carte and a view of indecency rules on the cable industry and consumers, but do consumers really want this?

Consider this. Most of the major cable operators reported outstanding first quarter 2007 performance, including significant success with digital cable which features dynamic parental control features. Cox even saw an up tick in basic analog cable. Cable TV is performing well in the face of ongoing stiff competition from satellite and new telco competitors. Cox customers are showing increased satisfaction with their services thanks to new programming choices as well as high definition, On DEMAND and DVR innovations which are increasing the value of their video service and the convenience associated with its use. Consumers direct the free market with their wallets. Americans clearly love their cable TV, and Government intervention threatens this love affair by threatening private investment and further innovation.

Cox Communications and ABC recently announced a trial of advanced video on demand, through which four of the network’s top primetime shows and select sports programs from ABC and ESPN will be available on Cox’s On DEMAND service. Starting this fall, “Desperate Housewives,” “Grey’s Anatomy,” “Lost” and “Ugly Betty” will be available to Cox’s On DEMAND customers in Orange County, Calif., the day after their broadcast premiers. The trial, and the fact that fast-forward capability will be disabled for these shows, has generated a lot of attention and questions. Here, Cox’s Senior VP of Programming Bob Wilson, responds to questions about the ABC venture and its implications.

1. Bob, what’s driving the VOD deal with ABC?

This is a step in the direction of taking VOD to the next level. It will put some of ABC’s most popular and valued shows, which are some of the highest rated in all of television, on Cox’s On DEMAND service the day after the programs first air. For Cox, it gives our customers enhanced access to free, over-the-air, premium broadcast content without either Cox or the customer paying incrementally more for it, and for ABC it will enhance the return on programming investment by providing extended program access in a way that protects and potentially enhances advertising value.

Okay, this one may scream self-promotion, but we simply couldn’t ignore an article in the current BusinessWeek, “A Cable Company People Don't Hate – How Cox is keeping customers happy and stealing business from the phone giants.” Yes, we cringe a bit at digs like the one in the headline, but, then again, we have to admit it’s a fair dig since Cable’s customer service record hasn’t always been sterling. But back to the present: the article addresses not only Cox Communications', but the industry’s, successful entry into the phone biz and our push into wireless. Here’s a snippet:

There's a ton of money to be made in phone service--about $60 billion of yearly revenue just on voice plans for U.S. consumers. And don't cable companies know it. For years they have been laying miles of new fiber-optic cable and doing everything they can to steal chunks of that business from the phone giants. So far they've managed to pull away about $4.6 billion in phone revenues, according to Sanford C. Bernstein & Co.

In the scramble for every customer, one cable outfit seems to have hit upon a formula that works: beating the phone companies at customer service. In recent surveys conducted by J.D. Power & Associates Inc., owned by Business Week parent The McGraw-Hill Companies, Atlanta-based Cox Communications outscores traditional phone providers such as AT&T, Verizon Communications, and Sprint Nextel. On a variety of metrics, from network performance and reliability to billing and cost, customers in several regions describe Cox as their preferred provider.

Techdirt has a post about the BusinessWeek article, here.

There are some intriguing findings in new research on teen Internet use that Cox and the National Center for Missing & Exploited Children (NCMEC) released today. Generally, it seems parents are talking to their teens more and more about Internet Safety. And, generally, teens are listening and are curbing their risky online behavior – although some poor choices continue. John Walsh, Cox’s partner in the Take Charge program and well-known fighter for children’s safety, will talk about the findings in a webcast today that’s open to everyone – to register, just click here ). Afterward, the replay will be available here.

The full findings are here. Some highlights:
• Nearly seven of 10 teens regularly receive personal messages online from people they don’t know.
• Teens readily post personal info online – in fact, 64% post photos or videos of themselves. Far more females than males post personal photos or videos of themselves.

Things are in full Vegas swing as the Cable Show kicks off. In one of yesterday's more interesting panels, Turner’s Coleman Breland offered an apt analogy for the dynamics of the cable industry. Keeping things interesting and lighthearted in a potentially tense session on programming which touched on new platforms, the threat and opportunity of the Internet, and challenges to traditional revenue models for content, Breland compared cable companies (programmers and operators) to members of a rock band who find themselves struggling to get along after reaching uber-success.

He explained how musicians in a rock band start out creating music together, working together to achieve success, and also partying together. In the beginning, the members of the band aren’t necessarily that good at what they do individually, but together they do something that resonates. They achieve success, and over time they become better at their craft. With success comes the pressure of expectations for continued success, and individual members become restless and want to try new things. He suggested the importance of the band members allowing their colleagues the room to grow. The point, he said, was that the members of the cable industry had been very successful together and could continue to be so. He pointed to the Stones and the Beatles and noted that the Stones were the model since they were still making lots of money together.

Cox’s Greater Louisiana operation hosted a Teen Summit on Internet Safety this week in Baton Rouge with more than 200 parents and teens from around the state. The students attended workshops to learn Internet safety tips and discussed reasons why teens take risks online by sharing personal information. Following the summit, the teen delegates met with lawmakers to advocate for Internet safety education.

Miss America 2007 Lauren Nelson, Cox's Internet safety partner, participated in the Summit and shared that when she was 13, she and her friends provided personal info online to someone who ended up being an online predator. (Fortunately, the situation was defused without incident.) She also gave the audience tips on how to be safer on the Web. This week, it was erroneously reported that Miss America would not testify against online predators that she helped catch during a recent sting broadcast on “America’s Most Wanted” (FOX). During interviews with local media in Baton Rouge, she set the record straight that she would testify and had always planned to testify.

One of the most powerful aspects of the Summit was hearing many of the kids commit to making changes in their Internet activities, after learning more about the potential risks. The Summit is part of Cox's companywide Take Charge initiative that helps parents understand how to use parental controls for the TV and Internet and encourages teens to be safer online.

New Orleans is definitely back in business, and Cable is helping spread the word. Today, 12 cable companies announced a donation of more than $12 million in airtime to promote New Orleans tourism. The Cox-led program will place tourism commercials on cable channels nationwide. The spots feature stars like John Goodman and Wynton Marsalis sharing what they love about New Orleans and directing viewers to www.NewOrleansOnline.com for travel info. The New Orleans Tourism Marketing Corporation (NOTMC) estimates the donation alone will deliver $1.3 billion in economic impact to the area. Mayor Ray Nagin, himself a former cable guy (he was General Manager of Cox’s New Orleans operation), certainly understands the power of the in-kind donation. “On behalf of everyone who calls New Orleans home, even those who remain relocated, I give heartfelt thanks to Cox and their cable peers for this incredible gift,” he said.

Last week, Cox Communications signed a letter of intent to exchange our 25% stake in Discovery Communications for the stock of a company that owns the Travel Channel business, Discovery’s Antenna Audio business and cash. We thought this would be the perfect time to start a new feature on Digital Straight Talk called Five (or so) Tough Questions For…. The first person in the hot seat is Cox’s President, Pat Esser.

1. Pat, Cox is a cable distributor. Why in the world are you interested in owning and operating a cable network like Travel Channel?

Yes, Cox is a cable distributor, and distribution will remain our core business. But I’m always interested in opportunities that can make our business even stronger. We’ve been very pleased with our interest in Discovery, but it's a financial asset that doesn’t hit our bottom line. Converting it into an operating asset like Travel Channel on our balance sheet that will generate revenue and cash flow is a good move for Cox. But beyond that, Travel Channel is a phenomenal brand with powerful content that I’m confident can be leveraged in multiple ways across the businesses and services of Cox Communications and our parent company, Cox Enterprises. That would include our wireless service, as well as newspapers and broadcast stations. There seem to be unlimited opportunities to make the most of Travel’s amazing content. I’m extremely impressed by Pat Younge (general manager of Travel Channel) and his team. My plan is to provide them all of the support they need from me and my team to continuing growing the Travel Channel brand, and to let them do their jobs.

Cox Communications today signed a letter of intent to exchange our 25% ownership interest in Discovery Communications for $1.275 billion in cash and ownership of Travel Channel and related businesses. Cox was an original investor in Discovery in 1986 and we’ve been delighted with the investment as Discovery has grown into one of the strongest content brands in the world. While we’ve been very pleased with the financial asset, we’re excited about the opportunity to convert it into an operational asset that generates revenues and cash flow, and to continue paying down debt with the cash proceeds.

Travel Channel, now available in nearly 90 million homes, is an impressive, growing network, and we’re excited about owning and operating it and exploring ways to leverage its unique content with other Cox businesses, including wireless ventures and Cox Enterprises’ broadcasting and newspaper businesses. When the transaction is complete, Cox would own Travel Channel, travelchannel.com and Antenna Audio, which produces audio and multimedia content used at museums and other attractions worldwide. Here’s the press release issued this morning by Discovery, announcing the letter of intent. The deal is expected to close by mid-May.

In “Consumers finally get a grip on VoIP,” USA Today highlights the rapid growth of residential telephone service delivered via Voice over Internet Protocol technology. According to the article, there were about 8.6 million VoIP users at the end of 2006, with 22.5 million predicted by 2010. As the article points out, those customers are attracted mainly by the robust phone features and lower prices enabled by VoIP. But the article also illustrates the continuing confusion between the two methods of VoIP delivery. One is Internet telephony, in which calls are routed over the World Wide Web and are therefore subject to the speed limitations of the user’s Internet connection and traffic on the public Internet. The other method is managed VoIP, in which calls are routed over private, managed backbone networks and are therefore not dependent on broadband connections or the vagaries of the public Internet. The millions of customers who get their phone service from cable companies (including Cox Communications) experience the managed method. Today’s article—indeed, most pieces about VoIP—didn’t make a clear distinction between the two delivery methods. But while customers ultimately don’t care how their calls are routed, the difference between the two is critical—as it’s ultimately a matter of quality and reliability.

This year at Cox Communications, we’re celebrating 10 years of delivering a bundle of cable, telephone and high-speed Internet services. As our 2006 accomplishments demonstrate, the benefits of bundling continue to make a huge positive impact. Some highlights: The number of new cable customers who also subscribe to Cox’s phone and/or Internet services is 60%, a record high. Customer churn (i.e., disconnects) is at an all-time low. In all, as of the end of 2006, Cox had 3.4 million “bundled” customers, representing an increase of about 15% over 2005. The bundle will soon grow larger with the addition of a fourth service, wireless. In related bundling news, Verizon said this week that, in an effort to compete with the cable bundle, it will integrate its wireless service, previously offered separate from landline and other services, into its bundle. Verizon also said its FiOS service added 89,000 TV customers in the quarter, although the company's profits declined 38% due to its aggressive fiber roll-out. Meanwhile, AT&T’s U-verse TV service added zero customers in the fourth quarter.

Pat Esser
President, Cox Communications

It took a little while to decompress following the overwhelming spectacle of CES, but with the benefit of a couple of days of calm, here’s some reflection on the highlights and themes that resonated with me during and after last week’s show:

 For me CES began, surreally, in Barry Manilow’s green room at the Las Vegas Hilton Theater, site of the “Pipelines Power” session. The area is adorned with seemingly hundreds of photos of the star with other stars, which provided some light escapism and mood-calming before we were ushered onto the stage and into the spotlight before a large crowd wanting to hear how cable, telco and satellite execs view convergence. As I stated then, as service providers, we must deliver the benefits of convergence minus the “hassle factor” for our customers. Throughout the week, as I viewed thousands of gizmos, gadgets and random awe-inspiring products—most of which likely will never make it to market—I was even more convinced that while consumers may welcome “wow,” above all they just want it to work. It won’t matter how amazing these converged products are if they don’t interact properly.

CES is a swirling mass of sensory overload this year, as it has always been. We spent 10 hours on the floor visiting with 26 different companies yesterday. As has also become customary, HDTV was everywhere, and large displays dominate many of the large consumer electronics companies’ booths. Displays are more stunning, and on-screen navigation appears crisper and easier to read and use. I noticed examples of companies capitalizing on the buzz of High Definition, offering other Hi Def capabilities such as Hi Def voice. If there’s any overarching theme that I could detect thus far, it’s that companies are struggling to figure out more and diverse ways to get content to the home and then to “sling” it around the home once there. Of course, the Internet and IP are central to most mechanisms for shuttling content to the home. Many companies announced ways to do direct downloads to their devices off the Internet, Sony being one of the most notable.

The FCC voted along party lines, 3-2, to treat service providers differently in video franchising. The Commission didn’t release an order, and likely won’t for several weeks, so we can’t comment on all of the details. But based on what has been reported, it’s a disappointment that the FCC appears determined to create an uneven, unfair playing field slanted decidedly in the telcos’ favor. Of course, it’s far from a done deal, with lawmakers questioning the FCC’s authority on the matter and cities likely to sue. (Here’s the official NCTA response.)

The other matter on the FCC’s meeting agenda was release of the 2005 cable pricing survey. No surprise there, since details had been leaked for months. NCTA head Kyle McSlarrow on Tuesday called the study “almost entirely useless as a foundation for any policy decision.” Although we haven’t seen the full report, based on the data that have been released, the conclusions of the study just aren’t true for Cox Communications. The FCC’s chief contention is that speeding the entry of AT&T, Verizon and other large telcos into the cable business will reduce prices. Truth is, Verizon and AT&T’s video services are already priced well above $35.94, which is the FCC-reported average price of cable in markets with at least two wireline competitors. Verizon’s FiOS service is $47.98 ($42.99 + $4.99 for a required converter) and AT&T’s U-Verse starts at $59. The FCC’s report claims that cable prices in markets with video competition from the telcos are about 20% lower (or $7) than in markets without telco video. Again, in Cox markets at least, that’s just not the case. Our prices in competitive markets aren’t distinctly different – only about 3% lower than in other markets. So, our prices are essentially the same whether we’re competing directly against satellite or telco video.

Not surprisingly, we love the current cover story in Telephony magazine, “The Best Phone Company in America?” Of course we love that it implies (without explicitly answering the question posed in its title) that Cox Communications is that phone company. But beyond the obvious self-serving, self-congratulatory reasons for us to love reporter Carol Wilson’s article, we above all respect and admire its painstakingly thorough review of the dozens of steps and components required to successfully launch and deliver cable telephony. In what is essentially a tutorial for new entrants in the telecom space, the article addresses basically every gory detail of the telephony biz—network redundancy, powering, billing and provisioning, customer care, knowledge management, training, research, etc.—in a surprisingly readable way. Granted, we admit that, other than Cox employees, it likely will be the rare reader who will stick with every one of the more than 3,500 words in the thing. But for those who like their business news unabridged, it definitely provides some enlightening historical context to the current hyper-competitive telecom marketplace.

We were pleased to see that this Wall Street Journal article touched on a few key issues of relevance in their discussion of cable’s price increases. First, they referenced the price increases of our satellite competitors, which have been more frequent and larger than the price increases implemented by many cable operators in recent years. This clearly supports something that we at Cox have been saying for years—that programming is the single biggest driver in the retail price we charge for cable TV. In the article, Cox was the only cable operator to highlight rising costs of our wholesale product as a driver in our retail prices.

The fact is that the universe of programming content is not infinite and often not competitive in nature. All video service providers buy content from the same providers, and in many cases the retailers have interests on the wholesale side as well. Several cable and satellite video distributors own programming networks (or have ownership stakes in them) which they distribute themselves, and sell to their peers and competitors. (Cox Communications, for example, holds about a 24% stake in Discovery. )

A major premise of this story is that competition from DBS and more recently the telcos has already slowed the rate of cable price increases. While we agree wholeheartedly that competition is always good for consumers, we still suggest that telco competition in the video space will not be the panacea suggested by policy-makers and the media. There is much additional room for studying the food chain in television; it’s nice to see the Journal taking some initial steps toward that end.

David Zaslav’s ascension to President and CEO of Discovery Communications is getting a lot of attention today. He’s the second NBC executive to exit this week, following TV group President and COO Randy Falco’s move to AOL. At Discovery, Zaslav will work for Founder and Chairman John S. Hendricks, whom Zaslav calls a mentor and credits for helping him join the cable industry in the ’80s. Discovery board member Pat Esser, President of Cox Communications, one of Discovery’s owners, said of Zaslav: “His unique understanding of strategic development, programming and operations will absolutely be a huge asset to Discovery’s continued success and long-range outlook.” A sampling of today’s media coverage about Zaslav: The New York Times, The Washington Post, Multichannel News, Broadcasting & Cable.

In covering Cox Communications’ announcement of a great third quarter for commercial sales, CableFAX Daily inserted an editorial comment referencing a certain statement last week from Verizon chairman and CEO Ivan Seidenberg.

Cox Business Services announced a 28% increase in 3Q commercial subs, due largely to greater availability of telephone service to business customers (Can you hear me now Verizon?). The MSO said 55% of new data customers in its legacy voice markets also subscribe to its VoIP service.

From CableFAX Daily’s coverage of Verizon’s earnings announcement yesterday:

“Also notable was (chairman/CEO Ivan) Seidenberg’s take on cable targeting small businesses. While the industry has made a lot of noise in this area, ‘I would say outside the Cablevision territory, I don’t think it is something that we are seeing a lot of at the moment.’”

Over the past several years, cable companies have made the transition to multi-service providers of more than just cable—a journey that started for Cox Communications with the launch of high speed Internet in 1996 and digital telephone in 1997. Cox has led the industry in “bundling” services. Yesterday, Cox announced that 57% of its nearly 6 million residential customers subscribe to more than one service—a 16% increase in bundled customers over the past year. But reflecting the ongoing transition away from just cable, Cox also has made a concerted effort recently to ensure a “line into every home” and pursue business out of every home passed by its network, even if that home has no interest in cable. Yesterday Cox announced success with that strategy, reporting an industry-leading number of non-video customers (432,000 of them) who choose Cox for high speed Internet and/or telephone, but not cable. Cox President Pat Esser described the rationale of Cox's "line in every home" strategy this way: “Our world is changing, and we needed to change our marketing strategies too.” Even so, Cox also saw strong video growth in the third quarter, growing basic cable subscriptions by 1.6%. Click here for Multichannel News' coverage of Cox's announcement.

The high cost of cable programming (particularly sports) is one of the biggest economic pressures affecting cable distributors and, whether they realize it or not, cable customers. It’s safe to say most customers don’t realize or care that their cable providers have to purchase the channels delivered into their homes. They just want to turn on their TVs and watch The Closer, Project Runway and SportsCenter. However, behind-the-scenes negotiations about how much cable providers pay to carry networks does directly affect cable customers—smack dab in the wallet. So we applaud pieces like Richard Sandomir’s column in today’s New York Times (“Network is Counting on Fans to Pay a Lot for a Little”) that reveal the direct link between the prices cable networks charge for distribution and the price cable customers in turn pay.

Sports programming is by far the most expensive of all categories of programming. And, as Sandomir points out, the NFL Network’s determination to extract hundreds of millions of dollars from cable operators and cable customers for eight NFL games illustrates how the aggressive demands of some networks directly impact consumers: "...the league wants cable operators to swallow a large fee, which would inevitably find its way to consumers."

Yet another new research report underscores the growing popularity of bundling up on multiple communications services. According to consumer research firm Telephia, nearly 43% of online households subscribe to a bundle of at least two services (among Internet, phone and TV) from a single provider. The company’s research revealed that price was the leader in driving consumers to bundle, along with customer service and convenience. While we certainly love reading more and more about the business and consumer benefits of bundling, we can hardly resist the urge to respond (oh so maturely) “duh.” From the time Cox Communications launched high-speed Internet in 1996 and digital telephone shortly thereafter, we’ve experienced first-hand that customers love the convenience and value of getting multiple services from a single source. However, for a long while, it was pretty lonely in the bundling camp; only recently have most other major providers woken up to the benefits of bundling. Meanwhile, Cox remains the best bundler, and more than 50% of the company’s nearly 6 million customers subscribe to at least two of Cox’s major residential services (cable TV, phone and high-speed Internet services).

It was nice to see recognition of the great strides Cable has made in the business services market, in a Reuters article this week:

After winning over many consumers by packaging phone, Internet and TV services into attractive bundles, cable is planning to attack the estimated $100 billion corporate market....Telecommunications analysts said companies like Verizon and AT&T Inc. have become complacent in serving small and medium businesses because they have not faced the same competitive or regulatory pressures as in residential markets.

Cox Communications tops the new Cable World list of best employers in the industry:

When we solicited nominations for this survey, most companies sent the obligatory pitch from their corporate PR departments. But when it came to Atlanta-based Cox, we also received a flurry of e-mails from employees around the country telling us why Cox is such a darned great place to work. Were they prompted to contact us? Probably, but the sheer number of responses convinced us to dig deeper. Once we did, we knew Cox should be ranked No. 1.

We have to point out what we could best phrase as “curious interpretation of the facts” in a Multichannel News article—“Satellite Rules J.D. Power Survey”—about the market research firm’s latest cable TV/satellite TV customer satisfaction study. To start with, the lead is baffling: "DirecTV and EchoStar Communications once again dominated J.D. Power & Associates’ annual customer-satisfaction survey...."

The fact is that Cable took home the trophy for highest customer satisfaction in three of the four regions. Satellite provider DirecTV got the top honors in one region, and, despite the performance credited to it by Multichannel, EchoStar’s Dish Network didn’t place first in a single region. Cox Communications had the highest score in the West, Bright House Networks in the South, and over-builder WOW! in the North Central region. And here’s another baffling declaration: "J.D. ranked DirecTV as the best pay TV company overall, with the direct-broadcast satellite provider receiving the top rankings in overall satisfaction; performance and reliability; cost of service; billing; image; offerings and promotions; and customer service." Actually, after poring through J.D. Power’s exhaustive 469-page report, we couldn’t find a single place where the firm declared an “overall” winner. Curious, indeed.

Cox Communications President Pat Esser’s headlining of the UBS conference call yesterday raised some eyebrows in the industry. The headline of a Multichannel News article, “Cox Holds Call; Not Going Public,” answered a question apparently on the minds of many investors when they saw Esser would be featured in securities firm’s periodic “Frontline” series of conference calls. Cox going public again? No, Esser emphasized. His reason for accepting analyst Aryeh Bourkoff’s invitation to participate in the conference call: “We haven’t done one of these in two years, but I thought so much was going on in the business and so many questions were being asked of us, this is a good way to get answers out into the market to do that.” Esser added, “We think that our success over the last decade, and particularly over the last couple of years, proves the power of our network and offerings, and validates the business strategy we’ve been following for more than a decade. So, even though we’re private, we think our recent results are a model for what Cable can achieve.”

In other coverage of Esser's address, the satellite industry’s SkyREPORT took note of Cox’s success in signing up former satellite TV customers in an article entitled “Cable Poaching Satellite Subs Like 1-2-3.” And CableFAX Daily opined that Cable’s publicly traded companies should be grateful to Esser:

An unexpected drop in wholesale prices undoubtedly helped drive cable operator stocks higher Tues—but MSOs might also want to send a thank-you note to Cox pres Pat Esser. Despite heading a private company, Esser held a conference call Tues with UBS analyst Aryeh Bourkoff to tout subscriber metrics and the power of the bundle.

Cable ranks highest in customer satisfaction in three of four regions in the J.D. Power and Associates 2006 Residential Cable/Satellite Study out today (click here for the press release). Cable companies Cox Communications, Bright House Networks and WOW! each took a region. DirecTV took the remaining one. One of the most interesting stats released by J.D. Power is that Cable’s average price is now lower than satellite TV, robbing the satellite companies of a message point they’ve touted aggressively for years. According to J.D. Power, cable customers spend an average of $58 a month, while satellite customers spend $61.

J.D. Power noted that satellite providers maintain a customer satisfaction gap over Cable, although it has narrowed. This is the first year the group has split the cable/satellite study by regions. Last year, WOW! ranked highest overall, ending satellite’s three consecutive years atop the survey. For Cox, the West region honor is the fifth J.D. Power award the company has received in 2006, following highest satisfaction honors in three regions in the telephone customer satisfaction study and highest customer satisfaction among small/midsize business data service providers nationwide.

The number of customers ditching satellite TV and choosing Cable has nearly doubled in the past two years, at least for Cox Communications. Company President Pat Esser will deliver that nugget in a teleconference today sponsored by UBS analyst Aryeh Bourkoff. This year, Esser will report, 11% of the company’s basic-cable connects are former satellite customers, up from 6% in 2004. The defecting satellite customers are big buyers of Cox’s full three-product bundle of cable, phone and high-speed Internet, with 40% of them choosing the triple play. Speaking of the bundle, Esser notes that delivering multiple products has greatly reduced Cox’s own customer defections. Cox’s bundled customers are 41% less likely to churn than single-product customers. Esser notes that Cox is America’s leading bundler, given that the company has delivered multiple services for a full decade, a distinction reinforced by the number of customers the company is taking away from both satellite and telephone companies.