By Shalini Ramachandran And Michael Calia
Cablevision Systems Corp. Chief Executive James Dolan on
Wednesday played down the potential business effect of the Federal
Communications Commission chairman's proposal to impose
utility-style regulations on broadband service.
Speaking on a fourth-quarter earnings conference call, Mr. Dolan
said "the idea of more regulation is never great for us, but to be
honest, we don't see at least what the Chairman has been discussing
as having any real effect on our business."
Mr. Dolan's comments are notable, since other major cable and
telecom chief executives have come out strongly against the
proposal, which would regulate broadband service under Title II of
the Communications Act. The agency wouldn't enforce certain
provisions, such as price regulation.
The cable industry as a whole is relying more on broadband
services to power growth as video subscribers continue to decline.
Mr. Dolan has said he can envision a future when Cablevision may
not offer TV service, but focus solely on broadband. Mr. Dolan
often refers to Cablevision as a "connectivity" company.
Comcast Corp. Chief Executive Brian Roberts said Tuesday that he
believed Title II regulation is "antiquated and has real
downsides." AT&T Inc. and Verizon Communications Inc. have
warned that the FCC's move would result in lower investment in
their networks and lead to legal challenges and prolonged
uncertainty for telecom companies.
Among other industry players, Cablevision joins only wireless
carriers Sprint Corp. and T-Mobile US Inc. in having a more neutral
stance. Those companies have said they don't believe the
regulation, as proposed by the chairman, would impede their
businesses.
To be sure, no one has seen the actual details of the full "net
neutrality" order yet. The FCC will vote on final rules on
Thursday, and the full order will only be released in the coming
weeks.
Mr. Dolan's comments came as Cablevision posted more subscriber
declines, although its revenue increased on higher revenue per
customer and growth in advertising. In the quarter, Cablevision
lost 34,000 video customers and 11,000 voice customers, though it
added 4,000 subscribers to its high-speed Internet service.
Cablevision on Wednesday said its total customers--businesses or
households that subscribe to at least one service--fell by 2.2%
year over year to 3.1 million as of Dec. 31. Video and high-speed
data customer numbers both declined for the year.
For the quarter ended Dec. 31, Cablevision posted earnings of
$56 million, or 20 cents a share, up from $51.8 million, or 19
cents a share, a year earlier. Overall revenue rose 3% to $1.63
billion.
Mr. Dolan continued to emphasize the broadband business over
television. "The consumer values the connectivity product more than
they do the video product at this point," he said, which is a
"pretty big shift."
Cablevision recently became the first major U.S. cable operator
to launch a mobile phone service that uses its network of Wi-Fi hot
spots. Mr. Dolan said early indications are that "customers are
finding the product to do what we said it was going to do and that
they are enjoying it." Mr. Dolan says that Cablevision still has no
plans to lease airwaves from wireless carriers to cover areas where
Wi-Fi isn't available.
Write to Shalini Ramachandran at shalini.ramachandran@wsj.com
and Michael Calia at michael.calia@wsj.com
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