NEW YORK (AP) - Cable TV provider Cablevision Systems Corp. disclosed plans
Thursday to offer high-speed wireless Internet service across its coverage area
in the New York region.
The company also reported a wider deficit for its first quarter on losses
from derivative contracts, while operating earnings jumped 44 percent on gains
from premium offerings like Internet access, phone service and digital video.
Chief Operating Officer Tom Rutledge told analysts on a conference call that
with just over half the homes in its coverage area now subscribing to high-speed
Internet service, the company had the "critical mass" to begin offering a
wireless broadband service.
Rutledge said the service would be built out over the next two years or so
and offer Cablevision's existing Internet customers online access through mobile
devices such as Apple Inc.'s iPhone, BlackBerry handsets or laptop computers.
The network would use Cablevision's existing infrastructure but would cost
the company about $100 per customer, Rutledge said. Cablevision currently has
about 3.1 million cable customers on Long Island and in other areas around New
York.
Cablevision's network would use WiFi technology, the kind used by the
wireless routers commonly installed in homes. Rutledge said the service would be
free to existing customers and be available on a fee basis to non-subscribers,
and it would eventually be capable of offering phone service.
Cablevision didn't offer details on how the network would operate, and
executives declined to be interviewed for further comment.
Cable companies are looking for ways to offer wireless Internet access,
mobile phone and other premium services to customers as phone companies like
Verizon Communications Inc. move into their territory of video and high-speed
Internet.
On Wednesday a group of companies including cable industry leader Comcast
Corp., Time Warner Cable Inc., chip maker Intel Corp., Google Inc. and cell
companies Clearwire and Sprint Nextel announced a separate joint venture, to be
called Clearwire, that will offer wireless Internet access service.
That service will use a technology called WiMax, which is similar to WiFi
but promises wider ranges of service and faster speeds than the video services
currently being offered on cell phones. Most wireless access being offered today
in coffee shops and other public areas is WiFi, the same kind used in homes.
The earnings report came a day after Cablevision announced a $496 million
purchase of Robert Redford's Sundance Channel. The network will continue on as
its own brand within Cablevision's Rainbow programming subsidiary, which also
includes AMC, IFC and WE tv.
Cablevision is also bidding $650 million to acquire Newsday, a major
newspaper based on Long Island, but the company faces competing bids from Rupert
Murdoch's News Corp., which owns the New York Post in neighboring Manhattan, and
Mort Zuckerman, owner the New York Daily News. Murdoch said Wednesday he
expected to clinch a deal for Newsday within a week.
Cablevision has declined to comment on its interest in Newsday, and CEO
James Dolan declined to answer questions about it on the conference call with
analysts Thursday. Cablevision owns a local news cable channel but hasn't
operated a newspaper before.
For the first quarter, Cablevision posted a net loss of $31.6 million, or 11
cents per share, versus a net loss of $26.3 million, or 9 cents per share, in
the same period a year ago. Revenues rose to $1.72 billion from $1.56 billion.
Operating income jumped 44 percent to $245.5 million, but the bottom line
was affected by $104.9 million in losses from financial derivative contracts,
which compared with comparable gains in that category of $65.1 million in the
year-ago period.
Cablevision shares rose 36 cents or 1.5 percent to $24.11 Thursday
afternoon, remaining close to the low end of their 52-week range of $20.68 to
$39.75.
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