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TWC CEO: Aereo TV Case Could Head to U.S. Supreme Court

25 Apr, 2013 By: Erik Gruenwedel

No. 2 cable operator loses 119,000 video subs in Q1 as video base dips below 12 million

Time Warner Cable chief executive Glenn Britt said legalization of Aereo TV, the subscription service that enables users to stream broadcast television programming via mini antennae to portable devices, would be a boon to cable operators while delivering a death knell to retransmission fees generated by media companies.

Manhattan-based Aereo TV has been sued by broadcasters claiming copyright infringement and other charges.

In an April 25 fiscal call with analysts, Britt said conflicting circuit court decisions in California and New York on Aereo don’t diminish the reality that it will ultimately be adjudicated — but not before possibly being heard by the U.S. Supreme Court.

“If it is found to be legal, then I think it has very interesting implications for the whole broadcast and broadcast network ecosystem and for the future of retransmissions,” Britt said. “Obviously, it would give people a route to receive the signals that are otherwise free through the air without paying retransmission fees.”

Chase Carey, COO of 21st Century Fox and News Corp., has said that if Aereo become legal, he would turn Fox TV into a subscription-based cable network.

“I think this is all speculative at this point, and all the various people who run the PR machines try to read tea leaves of each and every judicial decision.,” Britt said. But I think it's going to go on for quite a while.”

Separately, the CEO characterized Google’s rollout of a fiber optic network in Kansas City, and future launches in Austin, Tex., and Provo, Utah, as PR spin by the search behemoth. He said Google Fiber is nothing more than a “over build” on existing Internet channels offering basic tiered service for free.

“We’ll see where that goes,” Britt said. “I think the imagery painting is very effective but maybe not reality.”

CFO Robert Marcus said Google Fiber had “passed” about 2,000 of its residential customers with “de minimis” defections to date.

“We're talking about in the neighborhood of 2.5% of our [high-speed data] and video customers,” Marcus said.

Meanwhile, TWC reported a loss of 119,000 video subscribers during the first quarter ended March 31. The No. 2 cable operator ended the period with 11.9 million subs.

The loss was partially offset by a gain of 135,000 high-speed broadband subscribers — underscoring cable operators’ migration to Internet service providers (ISPs) as well as multichannel video distributors. Some of the data gains were due to TWC’s recent acquisition of Insight Communications. It ended the period with more than 11 million high-speed data subscribers.

Indeed, as cable operators increasingly market themselves as conduits to over-the-top video services such as Netflix, Amazon Prime Instant Video and Hulu Plus, they also are rolling out apps designed to retain and lure subscribers by offering access to content on demand.

Britt said the company is in discussions with consumer electronics companies about following up to the app it recently launched on Roku streaming players.

“Just last week we began to deliver on … TV Everywhere, launching out-of-home access to select content on our iPad and iPhone apps,” Britt said. “And together with other MSOs, we now have more than 100,000 Wi-Fi access points available to our broadband customers at no extra charge.”



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