TWC » Topics » Competition

This excerpt taken from the TWC 10-K filed Feb 19, 2010.
Competition
 
TWC faces intense competition for customers from a variety of alternative communications, information and entertainment delivery sources. TWC competes with incumbent local telephone companies, including AT&T Inc. (“AT&T”) and Verizon Communications Inc. (“Verizon”), across each of its primary services. Some of these telephone companies offer a broad range of services with features and functions comparable to those provided by TWC and in bundles similar to those offered by TWC, sometimes with the addition of wireless services. Each of TWC’s services also faces competition from other companies that provide services on a stand-alone basis. TWC’s video service faces competition from direct broadcast satellite (“DBS”) services, and increasingly from companies that deliver content to consumers over the Internet. TWC’s high-speed data service faces competition from wireless data providers, and competition in voice service is increasing as more homes in the United States are replacing their wireline telephone service with wireless service. Technological advances and product innovations have increased and will likely continue to increase the number of alternatives available to TWC’s customers, further intensifying competition. See “Risk Factors—Risks Related to Competition.”
 
Principal Competitors
 
Incumbent local telephone companies.  TWC’s video, high-speed data and Digital Phone services face competition from the video, digital subscriber line (“DSL”), wireless broadband and wireline and wireless phone offerings of AT&T and Verizon. In a significant number of TWC’s operating areas, AT&T and Verizon have upgraded their networks to carry two-way video, high-speed data and IP-based telephony services, each of which is similar to the corresponding service offered by TWC. Moreover, AT&T and Verizon aggressively market and sell bundles of video, high-speed data and voice services plus, in some cases, wireless services, and they market cross-platform features with their wireless services, such as remote DVR control from a wireless handset. TWC also faces competition in some areas from the DSL, wireless broadband and phone offerings of smaller incumbent local telephone companies, such as Frontier Communications Corporation (“Frontier Communications”) and Cincinnati Bell, Inc. (“Cincinnati Bell”).
 
Direct broadcast satellite.  TWC’s video service faces competition from DBS services, such as DISH Network Corporation (“Dish Network”) and DirecTV Group Inc. (“DirecTV”). Dish Network and DirecTV offer satellite-delivered pre-packaged programming services that can be received by relatively small and inexpensive receiving dishes. These providers offer aggressive promotional pricing, exclusive programming (e.g., NFL Sunday Tickettm) and video services that are comparable in many respects to TWC’s digital video service, including its DVR service and some of its interactive programming features.
 
In some areas, incumbent local telephone companies and DBS operators have entered into co-marketing arrangements that allow the telephone companies to offer synthetic bundles (i.e., video service provided principally by the DBS operator, and DSL, wireline phone service and, in some cases, wireless service provided by the telephone company). From a consumer standpoint, the synthetic bundles appear similar to TWC’s bundles.
 
Cable overbuilders.  TWC operates its cable systems under non-exclusive franchises granted by state or local authorities. The existence of more than one cable system, including municipality-owned systems, operating in the same territory is referred to as an “overbuild.” In some of TWC’s operating areas, other operators have overbuilt TWC’s systems and offer video, high-speed data and voice services in competition with TWC.
 
Other Competition and Competitive Factors
 
Aside from competing with the video, high-speed data and voice services offered by incumbent local telephone companies, DBS providers and cable overbuilders, each of TWC’s services also faces competition from other companies that provide services on a stand-alone basis.
 
Video competition.  TWC’s video service faces competition from a number of different sources, including companies that deliver movies, television shows and other video programming over broadband Internet connections, such as Hulu.com, Apple Inc.’s iTunes, Netflix Inc.’s “Watch Instantly” and YouTube. Increasingly, content owners are utilizing Internet-based delivery of content directly to consumers, some without charging a fee for access to the content. Furthermore, due to consumer electronics innovations, consumers are able to watch such Internet-delivered content on television sets. TWC also competes with online order services with mail delivery and video stores.
 
“Online” competition.  TWC’s high-speed data service faces competition from a variety of companies that offer other forms of online services, including low cost dial-up services over telephone lines and wireless broadband services, such as those offered by Verizon, AT&T, Sprint, T-Mobile USA, Inc. and Clearwire, Internet service via power lines, satellite and various other wireless services (e.g., Wi-Fi).


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Digital Phone competition.  TWC’s Digital Phone service competes with wireline, wireless and “over-the-top” phone providers. An increasing number of homes in the U.S. are replacing their traditional wireline telephone service with wireless phone service, a trend commonly referred to as “wireless substitution.” Wireless phone providers are encouraging this trend with aggressive marketing and the launch of wireless products targeted for home use. TWC also competes with “over-the-top” providers, such as Vonage, Skype, magicJack and Google Voice, and companies that sell phone cards at a cost per minute for both national and international service. The increase in wireless substitution and in the number of different technologies capable of carrying voice services has intensified the competitive environment in which TWC operates its Digital Phone service.
 
Additional competition.  In addition to multi-channel video providers, cable systems compete with all other sources of news, information and entertainment, including over-the-air television broadcast reception, live events, movie theaters and the Internet. In general, TWC also faces competition from other media for advertising dollars. To the extent that TWC’s services converge with theirs, TWC competes with the manufacturers of consumer electronics products. For instance, TWC’s DVR service competes with similar devices manufactured by consumer electronics companies.
 
Commercial competition.  TWC competes with incumbent local telephone companies, especially AT&T and Verizon, across all of its commercial services: video, high-speed data, voice, networking and transport. In addition, on a stand-alone basis, TWC’s commercial video service faces competition from DBS providers that compete with TWC primarily in the hospitality and restaurant industry, and its commercial high-speed data, voice, networking and transport services face competition from national and smaller regional competitive local exchange carriers or, “CLECs,” and from a variety of smaller incumbent local telephone companies, such as Frontier Communications and Cincinnati Bell.
 
Franchise process.  Under the Cable Television Consumer Protection and Competition Act of 1992, franchising authorities are prohibited from unreasonably refusing to award additional franchises. In December 2006, the FCC adopted an order intended to make it easier for competitors to obtain franchises, by defining when the actions of county- and municipal-level franchising authorities will be deemed to be unreasonable as part of the franchising process. Furthermore, legislation supported by regional telephone companies has been enacted in a number of states to allow these companies to enter the video distribution business under state-wide franchises and without obtaining local franchise approval. Legislation of this kind has been enacted in California, Kansas, Missouri, North Carolina, Ohio, South Carolina, Texas and Wisconsin, which include some of the Company’s largest operating areas. See “—Regulatory Matters—Video Services—Franchising” and “Risk Factors—Risks Related to Government Regulation.”
 
These excerpts taken from the TWC 10-K filed Feb 20, 2009.
Competition
 
TWC faces intense competition from a variety of alternative information and entertainment delivery sources, principally from direct-to-home satellite video providers and certain telephone companies, each of which offers a broad range of services that provide features and functions comparable to those provided by TWC. The services are also offered in bundles of video, high-speed data and voice services similar to TWC’s and, in certain cases, these offerings include wireless services. The availability of these bundled service offerings and of wireless offerings, whether as a single offering or as part of a bundle, has intensified competition. In addition, technological advances and product innovations have increased and will likely continue to increase the number of alternatives available to TWC’s customers from other providers and intensify the competitive environment. See “Risk Factors—Risks Related to Competition.”
 
Principal Competitors
 
Direct broadcast satellite.  TWC’s video services face competition from direct broadcast satellite (“DBS”) services, such as DISH Network Corporation (“Dish Network”) and DirecTV Group Inc. (“DirecTV”). Dish Network and DirecTV offer satellite-delivered pre-packaged programming services that can be received by relatively small and inexpensive receiving dishes. These providers offer aggressive promotional pricing, exclusive programming (e.g., “NFL League Pass”) and video services that are comparable in many respects to TWC’s digital video services, including its DVR service and some of its interactive programming features.
 
In some areas, incumbent local telephone companies and DBS operators have entered into co-marketing arrangements that allow both parties to offer synthetic bundles (i.e., video service provided principally by the DBS operator, and digital subscriber line (“DSL”), traditional phone service and, in some cases, wireless service provided by the telephone company). From a consumer standpoint, the synthetic bundles appear similar to TWC’s bundles and also result in a single bill.
 
Local telephone companies.  TWC’s video, high-speed data and Digital Phone services face competition from the video, DSL, wireless broadband and traditional and wireless phone offerings of AT&T Inc. (“AT&T”) and Verizon Communications Inc. (“Verizon”). In a number of TWC’s operating areas, AT&T and Verizon have upgraded portions of their networks to carry two-way video, high-speed data and IP-based telephony services, each of which is similar to the corresponding service offered by TWC. Moreover, AT&T and Verizon market and sell service bundles of video, high-speed data and voice services plus wireless services, and they market cross-platform features with their wireless services, such as remote DVR control from a wireless handset. TWC also faces competition from the DSL, wireless broadband and phone offerings of smaller incumbent local telephone companies, such as Frontier Communications Corporation and Cincinnati Bell, Inc.
 
Cable overbuilds.  TWC operates its cable systems under non-exclusive franchises granted by state or local authorities. The existence of more than one cable system, including municipality-owned systems, operating in the same territory is referred to as an “overbuild.” In some of TWC’s operating areas, other operators have overbuilt TWC’s systems and offer video, high-speed data and voice services in competition with TWC.


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Other Competition and Competitive Factors
 
Aside from competing with the video, high-speed data and voice services offered by DBS providers, local incumbent telephone companies and cable overbuilders, each of TWC’s services also faces competition from other companies that provide services on a stand-alone basis.
 
Video competition.  TWC’s video services face competition from a number of different sources, including companies that deliver movies, television shows and other video programming over broadband Internet connections, such as Hulu.com, as well as online order services with mail delivery, and video stores and home video services. Increasingly, content owners are utilizing Internet-based delivery of content directly to consumers, often without charging a fee for access to the content. Furthermore, due to consumer electronics innovations, consumers will over time be more readily able to watch such Internet-delivered content on television sets.
 
“Online” competition.  TWC’s high-speed data services face or may face competition from a variety of companies that offer other forms of online services, including low cost dial-up services over ordinary telephone lines and third-generation wireless broadband services, such as those offered by Verizon, AT&T, Sprint and T-Mobile USA, Inc. (“T-Mobile”), and developing technologies, such as fourth-generation wireless services, Internet service via power lines, satellite and various other wireless services (e.g., Wi-Fi).
 
Digital Phone competition.  TWC’s Digital Phone service competes with traditional and wireless phone providers. An increasing number of homes in the U.S. are replacing their traditional telephone service with wireless phone service, a trend commonly referred to as “wireless substitution.” This trend may be sensitive to economic conditions and consumer spending trends. TWC also competes with national providers of IP-based telephony products, such as Vonage, Skype and magicJack, and companies that sell phone cards at a cost per minute for both national and international service. The increase in the number of different technologies capable of carrying voice services has intensified the competitive environment in which TWC operates its Digital Phone service.
 
Additional competition.  In addition to multi-channel video providers, cable systems compete with all other sources of news, information and entertainment, including over-the-air television broadcast reception, live events, movie theaters and the Internet. In general, TWC also faces competition from other media for advertising dollars. To the extent that TWC’s services converge with theirs, TWC competes with the manufacturers of consumer electronics products. For instance, TWC’s DVRs compete with similar devices manufactured by consumer electronics companies.
 
Commercial competition.  TWC’s commercial video, high-speed data, voice and networking and transport services face competition from local incumbent telephone companies, especially AT&T and Verizon, as well as from a variety of other national and regional business services competitors. These companies include facilities-based business service providers, such as Level 3 Communications, Inc. and tw telecom inc., which provide fiber optic services to enterprise and small- to medium-sized business customers, smaller regional competitive local exchange carriers (“CLECs”) that offer voice and high-speed data services using local access lines leased from local incumbent telephone operators, and national providers of IP-telephony products such as Vonage, which provide voice and/or high-speed data services on a residential broadband connection.
 
Franchise process.  Under the Cable Television Consumer Protection and Competition Act of 1992, franchising authorities are prohibited from unreasonably refusing to award additional franchises. In December 2006, the FCC adopted an order intended to make it easier for competitors to obtain franchises, by defining when the actions of county- and municipal-level franchising authorities will be deemed to be unreasonable as part of the franchising process. Furthermore, legislation supported by regional telephone companies has been enacted in a number of states to allow these companies to enter the video distribution business without obtaining local franchise approval. Legislation of this kind has been enacted in California, Kansas, New Jersey, North Carolina, Ohio, South Carolina, Texas and Wisconsin, which include some of the Company’s largest operating areas. See “—Regulatory Matters—Video Services—Franchising” and “Risk Factors—Risks Related to Government Regulation.”


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Table of Contents

Competition


 



TWC faces intense competition from a variety of alternative
information and entertainment delivery sources, principally from
direct-to-home satellite video providers and certain telephone
companies, each of which offers a broad range of services that
provide features and functions comparable to those provided by
TWC. The services are also offered in bundles of video,
high-speed data and voice services similar to TWC’s and, in
certain cases, these offerings include wireless services. The
availability of these bundled service offerings and of wireless
offerings, whether as a single offering or as part of a bundle,
has intensified competition. In addition, technological advances
and product innovations have increased and will likely continue
to increase the number of alternatives available to TWC’s
customers from other providers and intensify the competitive
environment. See “Risk Factors—Risks Related to
Competition.”


 




Principal
Competitors



 



Direct broadcast satellite.  TWC’s video
services face competition from direct broadcast satellite
(“DBS”) services, such as DISH Network Corporation
(“Dish Network”) and DirecTV Group Inc.
(“DirecTV”). Dish Network and DirecTV offer
satellite-delivered pre-packaged programming services that can
be received by relatively small and inexpensive receiving
dishes. These providers offer aggressive promotional pricing,
exclusive programming (e.g., “NFL League Pass”) and
video services that are comparable in many respects to
TWC’s digital video services, including its DVR service and
some of its interactive programming features.


 



In some areas, incumbent local telephone companies and DBS
operators have entered into co-marketing arrangements that allow
both parties to offer synthetic bundles (i.e., video service
provided principally by the DBS operator, and digital subscriber
line (“DSL”), traditional phone service and, in some
cases, wireless service provided by the telephone company). From
a consumer standpoint, the synthetic bundles appear similar to
TWC’s bundles and also result in a single bill.


 



Local telephone companies.  TWC’s video,
high-speed data and Digital Phone services face competition from
the video, DSL, wireless broadband and traditional and wireless
phone offerings of AT&T Inc. (“AT&T”) and
Verizon Communications Inc. (“Verizon”). In a number
of TWC’s operating areas, AT&T and Verizon have
upgraded portions of their networks to carry two-way video,
high-speed data and
IP-based
telephony services, each of which is similar to the
corresponding service offered by TWC. Moreover, AT&T and
Verizon market and sell service bundles of video, high-speed
data and voice services plus wireless services, and they market
cross-platform features with their wireless services, such as
remote DVR control from a wireless handset. TWC also faces
competition from the DSL, wireless broadband and phone offerings
of smaller incumbent local telephone companies, such as Frontier
Communications Corporation and Cincinnati Bell, Inc.


 



Cable overbuilds.  TWC operates its cable
systems under non-exclusive franchises granted by state or local
authorities. The existence of more than one cable system,
including municipality-owned systems, operating in the same
territory is referred to as an “overbuild.” In some of
TWC’s operating areas, other operators have overbuilt
TWC’s systems and offer video, high-speed data and voice
services in competition with TWC.





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Table of Contents







Other
Competition and Competitive Factors



 



Aside from competing with the video, high-speed data and voice
services offered by DBS providers, local incumbent telephone
companies and cable overbuilders, each of TWC’s services
also faces competition from other companies that provide
services on a stand-alone basis.


 



Video competition.  TWC’s video services
face competition from a number of different sources, including
companies that deliver movies, television shows and other video
programming over broadband Internet connections, such as
Hulu.com, as well as online order services with mail delivery,
and video stores and home video services. Increasingly, content
owners are utilizing Internet-based delivery of content directly
to consumers, often without charging a fee for access to the
content. Furthermore, due to consumer electronics innovations,
consumers will over time be more readily able to watch such
Internet-delivered content on television sets.


 



“Online” competition.  TWC’s
high-speed data services face or may face competition from a
variety of companies that offer other forms of online services,
including low cost
dial-up
services over ordinary telephone lines and third-generation
wireless broadband services, such as those offered by Verizon,
AT&T, Sprint and
T-Mobile
USA, Inc. (“T-Mobile”), and developing technologies,
such as fourth-generation wireless services, Internet service
via power lines, satellite and various other wireless services
(e.g., Wi-Fi).


 



Digital Phone competition.  TWC’s Digital
Phone service competes with traditional and wireless phone
providers. An increasing number of homes in the U.S. are
replacing their traditional telephone service with wireless
phone service, a trend commonly referred to as “wireless
substitution.” This trend may be sensitive to economic
conditions and consumer spending trends. TWC also competes with
national providers of
IP-based
telephony products, such as Vonage, Skype and magicJack, and
companies that sell phone cards at a cost per minute for both
national and international service. The increase in the number
of different technologies capable of carrying voice services has
intensified the competitive environment in which TWC operates
its Digital Phone service.


 



Additional competition.  In addition to
multi-channel video providers, cable systems compete with all
other sources of news, information and entertainment, including
over-the-air television broadcast reception, live events, movie
theaters and the Internet. In general, TWC also faces
competition from other media for advertising dollars. To the
extent that TWC’s services converge with theirs, TWC
competes with the manufacturers of consumer electronics
products. For instance, TWC’s DVRs compete with similar
devices manufactured by consumer electronics companies.


 



Commercial competition.  TWC’s commercial
video, high-speed data, voice and networking and transport
services face competition from local incumbent telephone
companies, especially AT&T and Verizon, as well as from a
variety of other national and regional business services
competitors. These companies include facilities-based business
service providers, such as Level 3 Communications, Inc. and
tw telecom inc., which provide fiber optic services to
enterprise and small- to medium-sized business customers,
smaller regional competitive local exchange carriers
(“CLECs”) that offer voice and high-speed data
services using local access lines leased from local incumbent
telephone operators, and national providers of
IP-telephony
products such as Vonage, which provide voice
and/or
high-speed data services on a residential broadband connection.


 



Franchise process.  Under the Cable Television
Consumer Protection and Competition Act of 1992, franchising
authorities are prohibited from unreasonably refusing to award
additional franchises. In December 2006, the FCC adopted an
order intended to make it easier for competitors to obtain
franchises, by defining when the actions of county- and
municipal-level franchising authorities will be deemed to be
unreasonable as part of the franchising process. Furthermore,
legislation supported by regional telephone companies has been
enacted in a number of states to allow these companies to enter
the video distribution business without obtaining local
franchise approval. Legislation of this kind has been enacted in
California, Kansas, New Jersey, North Carolina, Ohio, South
Carolina, Texas and Wisconsin, which include some of the
Company’s largest operating areas. See
“—Regulatory Matters—Video
Services—Franchising” and “Risk
Factors—Risks Related to Government Regulation.”





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Table of Contents







These excerpts taken from the TWC 10-K filed Feb 22, 2008.
Competition
 
TWC faces intense competition from a variety of alternative information and entertainment delivery sources, principally from direct-to-home satellite video providers and certain telephone companies, each of which offers a broad range of services through increasingly varied technologies that provide features and functions comparable to those provided by TWC. The services are also offered in bundles of video, high-speed data and voice services similar to TWC’s and, in certain cases, these offerings include wireless services. The availability of these bundled service offerings has intensified competition. In addition, technological advances will likely increase the number of alternatives available to TWC’s customers from other providers and intensify the competitive environment. See “Risk Factors—Risks Related to Competition.”
 
Principal Competitors
 
Direct broadcast satellite.  TWC’s video services face competition from direct broadcast satellite (“DBS”) services, such as DISH Network Corporation (“Dish Network”) and DirecTV Group Inc. (“DirecTV”). Dish Network and DirecTV offer satellite-delivered pre-packaged programming services that can be received by relatively small and inexpensive receiving dishes. These providers offer aggressive promotional pricing, exclusive programming (e.g., “NFL Sunday Ticket,” which is available only to DirecTV) and video services that are comparable in many respects to TWC’s analog and digital video services, including TWC’s DVR service and some of its interactive programming features. These providers are also working to increase the number of HDTV channels they offer in order to differentiate their service from the services offered by cable operators.
 
In some areas, incumbent local telephone companies and DBS operators have entered into co-marketing arrangements that allow both parties to offer synthetic bundles (i.e., video service provided principally by the DBS operator, and digital subscriber line (“DSL”), traditional phone service and, in some cases, wireless service provided by the telephone company). From a consumer standpoint, the synthetic bundles appear similar to TWC’s bundles and also result in a single bill. For example, AT&T Inc. (“AT&T”) is offering a service in some areas that utilizes DBS video but in an integrated package with AT&T’s DSL product, which enables an Internet-based return path that allows the customer to order a video-on-demand-like product and other services that TWC provides using its two-way network.
 
Local telephone companies.  TWC’s high-speed data and Digital Phone services face competition from the DSL, wireless broadband and traditional and wireless phone offerings of incumbent local telephone companies, especially AT&T and Verizon Communications Inc. (“Verizon”), and also smaller local telephone companies, such as Cincinnati Bell, Inc. and Citizens Communications Company. AT&T and Verizon have undertaken fiber-optic upgrades of their networks, and the technologies they are using, such as “fiber-to-the-node” (“FTTN”) and “fiber-to-the-home” (“FTTH”), are capable of carrying two-way video, high-speed data with substantial bandwidth and IP-based telephony services, each of which is similar to the corresponding services TWC offers. In addition, these telephone companies can market and sell service bundles of video, high-speed data and voice services plus wireless services provided by the telephone companies’ owned or affiliated companies.
 
Cable overbuilds.  TWC operates its cable systems under non-exclusive franchises granted by state or local authorities. The existence of more than one cable system, including municipality-owned systems, operating in the same territory is referred to as an “overbuild.” In some of TWC’s operating areas, other operators have overbuilt TWC’s systems and/or offer video, data and voice services in competition with TWC.
 
Satellite Master Antenna Television (“SMATV”).  Additional competition comes from private cable television systems servicing condominiums, apartment complexes and certain other multiple dwelling units with local broadcast signals and many of the same satellite-delivered program services offered by franchised cable systems. Some SMATV operators now offer voice and high-speed data services as well.
 
Other Competition and Competitive Factors
 
Aside from competing with the video, high-speed data and voice services offered by DBS providers, local incumbent telephone companies, cable overbuilders and SMATVs, each of TWC’s services also faces competition from other companies that provide services on a stand-alone basis.


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Table of Contents

Video competition.  TWC’s video services face competition on a stand-alone basis from a number of different sources, including:
 
  •   local television broadcast stations that provide free over-the-air programming which can be received using an antenna and a television set;
 
  •   local television broadcasters, which in selected markets sell digital subscription services; and
 
  •   video programming delivered over broadband Internet connections.
 
TWC’s VOD services compete with online movie and other services, which are delivered over broadband Internet connections, online order services with mail delivery, and with video stores and home video services.
 
“Online” competition.  TWC’s high-speed data services face or may face competition from a variety of companies that offer other forms of online services, including low cost dial-up services over ordinary telephone lines, and developing technologies, such as Internet service via power lines, satellite and various wireless services (e.g., Wi-Fi), including those of local municipalities.
 
Digital Phone competition.  TWC’s Digital Phone service also competes with wireless phone providers and national providers of IP-based telephony products such as Vonage. The increase in the number of different technologies capable of carrying voice services has intensified the competitive environment in which TWC operates its Digital Phone service.
 
Additional competition.  In addition to multi-channel video providers, cable systems compete with all other sources of news, information and entertainment, including over-the-air television broadcast reception, live events, movie theaters and the Internet. In general, TWC also faces competition from other media for advertising dollars. To the extent that TWC’s products and services converge with theirs, TWC competes with the manufacturers of consumer electronics products. For instance, TWC’s DVRs compete with similar devices manufactured by consumer electronics companies.
 
Commercial competition.  TWC’s commercial video, high-speed data, voice and networking and transport services face competition from local incumbent telephone companies, especially AT&T and Verizon, as well as from a variety of other national and regional business services competitors. These companies include facilities-based business service providers, such as Level 3 Communications, Inc., Time Warner Telecom Inc. and XO Communications, LLC, which provide fiber optic services to enterprise and small- to medium-sized business customers, smaller regional competitive local exchange carriers (“CLECs”) that offer voice and data services using local access lines leased from local incumbent telephone operators, and national providers of IP-telephony products such as Vonage, which provide voice and/or data services on a residential broadband connection.
 
Franchise process.  Under the Cable Television Consumer Protection and Competition Act of 1992, franchising authorities are prohibited from unreasonably refusing to award additional franchises. In December 2006, the FCC adopted an order intended to make it easier for competitors to obtain franchises, by defining when the actions of county- and municipal-level franchising authorities will be deemed to be unreasonable as part of the franchising process. Furthermore, legislation supported by regional telephone companies has been proposed at the state and federal level and enacted in a number of states to allow these companies to enter the video distribution business without obtaining local franchise approval and often on substantially more favorable terms than those afforded TWC and other existing cable operators. Legislation of this kind has been enacted in California, New Jersey, North Carolina, South Carolina and Texas. See “Regulatory Matters—State and Local Regulation” and “Risk Factors—Risks Related to Government Regulation.”
 
Competition


 



TWC faces intense competition from a variety of alternative
information and entertainment delivery sources, principally from
direct-to-home satellite video providers and certain telephone
companies, each of which offers a broad range of services
through increasingly varied technologies that provide features
and functions comparable to those provided by TWC. The services
are also offered in bundles of video, high-speed data and voice
services similar to TWC’s and, in certain cases, these
offerings include wireless services. The availability of these
bundled service offerings has intensified competition. In
addition, technological advances will likely increase the number
of alternatives available to TWC’s customers from other
providers and intensify the competitive environment. See
“Risk Factors—Risks Related to Competition.”


 




Principal
Competitors



 



Direct broadcast satellite.  TWC’s video
services face competition from direct broadcast satellite
(“DBS”) services, such as DISH Network Corporation
(“Dish Network”) and DirecTV Group Inc.
(“DirecTV”). Dish Network and DirecTV offer
satellite-delivered pre-packaged programming services that can
be received by relatively small and inexpensive receiving
dishes. These providers offer aggressive promotional pricing,
exclusive programming (e.g., “NFL Sunday Ticket,”
which is available only to DirecTV) and video services that are
comparable in many respects to TWC’s analog and digital
video services, including TWC’s DVR service and some of its
interactive programming features. These providers are also
working to increase the number of HDTV channels they offer in
order to differentiate their service from the services offered
by cable operators.


 



In some areas, incumbent local telephone companies and DBS
operators have entered into co-marketing arrangements that allow
both parties to offer synthetic bundles (i.e., video service
provided principally by the DBS operator, and digital subscriber
line (“DSL”), traditional phone service and, in some
cases, wireless service provided by the telephone company). From
a consumer standpoint, the synthetic bundles appear similar to
TWC’s bundles and also result in a single bill. For
example, AT&T Inc. (“AT&T”) is offering a
service in some areas that utilizes DBS video but in an
integrated package with AT&T’s DSL product, which
enables an Internet-based return path that allows the customer
to order a
video-on-demand-like
product and other services that TWC provides using its two-way
network.


 



Local telephone companies.  TWC’s
high-speed data and Digital Phone services face competition from
the DSL, wireless broadband and traditional and wireless phone
offerings of incumbent local telephone companies, especially
AT&T and Verizon Communications Inc. (“Verizon”),
and also smaller local telephone companies, such as Cincinnati
Bell, Inc. and Citizens Communications Company. AT&T and
Verizon have undertaken fiber-optic upgrades of their networks,
and the technologies they are using, such as
“fiber-to-the-node” (“FTTN”) and
“fiber-to-the-home” (“FTTH”), are capable of
carrying two-way video, high-speed data with substantial
bandwidth and
IP-based
telephony services, each of which is similar to the
corresponding services TWC offers. In addition, these telephone
companies can market and sell service bundles of video,
high-speed data and voice services plus wireless services
provided by the telephone companies’ owned or affiliated
companies.


 



Cable overbuilds.  TWC operates its cable
systems under non-exclusive franchises granted by state or local
authorities. The existence of more than one cable system,
including municipality-owned systems, operating in the same
territory is referred to as an “overbuild.” In some of
TWC’s operating areas, other operators have overbuilt
TWC’s systems
and/or offer
video, data and voice services in competition with TWC.


 



Satellite Master Antenna Television
(“SMATV”).
  Additional competition comes
from private cable television systems servicing condominiums,
apartment complexes and certain other multiple dwelling units
with local broadcast signals and many of the same
satellite-delivered program services offered by franchised cable
systems. Some SMATV operators now offer voice and high-speed
data services as well.


 




Other
Competition and Competitive Factors



 



Aside from competing with the video, high-speed data and voice
services offered by DBS providers, local incumbent telephone
companies, cable overbuilders and SMATVs, each of TWC’s
services also faces competition from other companies that
provide services on a stand-alone basis.





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Video competition.  TWC’s video services
face competition on a stand-alone basis from a number of
different sources, including:


 




































  •  

local television broadcast stations that provide free
over-the-air programming which can be received using an antenna
and a television set;
 
  •  

local television broadcasters, which in selected markets sell
digital subscription services; and
 
  •  

video programming delivered over broadband Internet connections.


 



TWC’s VOD services compete with online movie and other
services, which are delivered over broadband Internet
connections, online order services with mail delivery, and with
video stores and home video services.


 



“Online” competition.  TWC’s
high-speed data services face or may face competition from a
variety of companies that offer other forms of online services,
including low cost
dial-up
services over ordinary telephone lines, and developing
technologies, such as Internet service via power lines,
satellite and various wireless services (e.g., Wi-Fi), including
those of local municipalities.


 



Digital Phone competition.  TWC’s Digital
Phone service also competes with wireless phone providers and
national providers of
IP-based
telephony products such as Vonage. The increase in the number of
different technologies capable of carrying voice services has
intensified the competitive environment in which TWC operates
its Digital Phone service.


 



Additional competition.  In addition to
multi-channel video providers, cable systems compete with all
other sources of news, information and entertainment, including
over-the-air television broadcast reception, live events, movie
theaters and the Internet. In general, TWC also faces
competition from other media for advertising dollars. To the
extent that TWC’s products and services converge with
theirs, TWC competes with the manufacturers of consumer
electronics products. For instance, TWC’s DVRs compete with
similar devices manufactured by consumer electronics companies.


 



Commercial competition.  TWC’s commercial
video, high-speed data, voice and networking and transport
services face competition from local incumbent telephone
companies, especially AT&T and Verizon, as well as from a
variety of other national and regional business services
competitors. These companies include facilities-based business
service providers, such as Level 3 Communications, Inc.,
Time Warner Telecom Inc. and XO Communications, LLC, which
provide fiber optic services to enterprise and small- to
medium-sized business customers, smaller regional competitive
local exchange carriers (“CLECs”) that offer voice and
data services using local access lines leased from local
incumbent telephone operators, and national providers of
IP-telephony
products such as Vonage, which provide voice
and/or data
services on a residential broadband connection.


 



Franchise process.  Under the Cable Television
Consumer Protection and Competition Act of 1992, franchising
authorities are prohibited from unreasonably refusing to award
additional franchises. In December 2006, the FCC adopted an
order intended to make it easier for competitors to obtain
franchises, by defining when the actions of county- and
municipal-level franchising authorities will be deemed to be
unreasonable as part of the franchising process. Furthermore,
legislation supported by regional telephone companies has been
proposed at the state and federal level and enacted in a number
of states to allow these companies to enter the video
distribution business without obtaining local franchise approval
and often on substantially more favorable terms than those
afforded TWC and other existing cable operators. Legislation of
this kind has been enacted in California, New Jersey, North
Carolina, South Carolina and Texas. See “Regulatory
Matters—State and Local Regulation” and “Risk
Factors—Risks Related to Government Regulation.”


 




This excerpt taken from the TWC 10-K filed Feb 23, 2007.
Competition
 
TWC faces intense competition from a variety of alternative information and entertainment delivery sources, principally from direct-to-home satellite video providers and certain regional telephone companies, each of which offers or will shortly be able to offer a broad range of services through increasingly varied technologies. In addition, technological advances will likely increase the number of alternatives available to TWC’s customers from other providers and intensify the competitive environment. See Item 1A, “Risk Factors — Risks Related to Competition.”
 
Principal Competitors
 
Direct broadcast satellite.  TWC’s video services face competition from direct broadcast satellite services, such as the Dish Network and DirecTV. DirecTV and Dish Network offer satellite-delivered pre-packaged programming services that can be received by relatively small and inexpensive receiving dishes. The video services provided by these satellite providers are comparable, in many respects, to TWC’s analog and digital video services, and direct broadcast satellite subscribers can obtain satellite receivers with integrated digital video recorders from those providers as well. Both major direct broadcast satellite providers have entered into co-


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marketing arrangements with regional telephone companies that allow these telephone companies to offer customers a bundle of video, telephone and DSL services, which competes with TWC’s “Triple Play” of video, high-speed data and Digital Phone services.
 
Incumbent local telephone companies.  TWC’s high-speed data and Digital Phone services face competition from the DSL and traditional phone offerings of incumbent local telephone companies in most TWC operating areas. In some cases, DSL providers have partnered with ISPs such as AOL, which may enhance DSL’s competitive position. In addition, some incumbent local telephone companies, such as AT&T Inc. (“AT&T”) and Verizon, have undertaken fiber-optic upgrades of their networks. The technologies they are using, such as fiber-to-the-node (“FTTN”) and fiber-to-the-home (“FTTH”), are capable of carrying two-way video, high-speed data with substantial bandwidth and IP-based telephony services, each of which is similar to the comparable services TWC offers. These networks allow for the marketing of service bundles of video, data and voice services and these companies also have the ability to include wireless services provided by owned or affiliated companies in bundles that they may offer.
 
Cable overbuilds.  TWC operates its cable systems under non-exclusive franchises granted by state or local authorities. The existence of more than one cable system, including municipality-owned systems, operating in the same territory is referred to as an “overbuild.” In some of TWC’s operating areas, other operators have overbuilt TWC’s systems and/or offer video, data and voice services in competition with TWC.
 
Satellite Master Antenna Television (“SMATV”).  Additional competition comes from private cable television systems servicing condominiums, apartment complexes and certain other multiple dwelling units, often on an exclusive basis, with local broadcast signals and many of the same satellite-delivered program services offered by franchised cable systems. Some SMATV operators now offer voice and high-speed data services as well.
 
Wireless Cable/Multi-channel Microwave Distribution Services (“MMDS”).  TWC faces competition from wireless cable operators, including digital wireless operators, who use terrestrial microwave technology to distribute video programming and some of which now offer voice and high-speed data services.
 
Other Competition and Competitive Factors
 
Aside from competing with the video, data and voice services offered by direct broadcast satellite providers, local incumbent telephone companies, cable overbuilders and some SMATVs and MMDSs, each of TWC’s services also faces competition from other companies that provide services on a stand-alone basis.
 
Video competition.  TWC’s video services face competition on a stand-alone basis from a number of different sources, including:
 
  •  local television broadcast stations that provide free over-the-air programming which can be received using an antenna and a television set;
 
  •  local television broadcasters, which in selected markets sell digital subscription services; and
 
  •  video programming delivered over broadband Internet connections.
 
TWC’s VOD services compete with online movie services, which are delivered over broadband Internet connections, and with video stores and home video products.
 
“Online” competition.  TWC’s high-speed data services face or may face competition from a variety of companies that offer other forms of online services, including low cost dial-up services over ordinary telephone lines, and developing technologies, such as Internet service via power lines, satellite and various wireless services (e.g., Wi-Fi), including those of local municipalities.
 
Digital Phone competition.  TWC’s Digital Phone service also competes with wireless phone providers and national providers of Internet-based phone products such as Vonage. The increase in the number of different technologies capable of carrying voice services has intensified the competitive environment in which TWC’s Digital Phone service operates.


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Additional competition.  In addition to multi-channel video providers, cable systems compete with all other sources of news, information and entertainment, including over-the-air television broadcast reception, live events, movie theaters and the Internet. In general, TWC also faces competition from other media for advertising dollars. To the extent that TWC’s products and services converge with theirs, TWC competes with the manufacturers of consumer electronics products. For instance, TWC’s digital video recorders compete with similar devices manufactured by consumer electronics companies.
 
Franchise process.  Under the Cable Television Consumer Protection and Competition Act of 1992, franchising authorities are prohibited from unreasonably refusing to award additional franchises. In December 2006, the FCC adopted an order intended to make it easier for competitors to obtain franchises, by defining when the actions of county- and municipal-level franchising authorities will be deemed to be unreasonable as part of the franchising process. The order, among other things, establishes deadlines for franchising authorities to act on competitive franchise applications; prohibits franchising authorities from placing unreasonable build-out demands on competitive applicants; and prohibits franchising authorities from requiring competitive applicants to undertake certain obligations concerning the provision of public, educational, and governmental access programming. Furthermore, legislation supported by regional telephone companies has been proposed at the state and federal level and enacted in a number of states to allow these companies to enter the video distribution business without obtaining local franchise approval and often on substantially more favorable terms than those afforded TWC and other existing cable operators. Legislation of this kind has been enacted in California, New Jersey, North Carolina, South Carolina and Texas. See Item 1A, “Risk Factors — Risks Related to Government Regulation.”
 
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