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Cable Technology Feature Article

June 14, 2010

Cablevision Buys Bresnan, Illustrates Industry Trend

By Gary Kim, Contributing Editor

It has been quite a long time since Cablevision owned cable systems outside its Long Island franchise area and nearby Connecticut, New Jersey and Pennsylvania. But with the acquisition of Bresnan Communications it will reverse a course adopted decades ago to focus on its core New York market and other investments, such as programming assets, then considered more strategic.
The new move may signal that, despite all those other moves, operating cable systems is seen as providing more upside than sports franchises and venues or programming networks. The other notable aspect of the transaction is that Cablevision traditionally has focused on urban and suburban markets with relatively high density.
The Bresnan properties are scattered across the intermountain West and largely consist of relatively rural and smaller town markets.
As with the CenturyLink purchase of Qwest (News - Alert), growth strategies now have firms moving out of their traditional roles. CenturyLink is a rural telco specialist that now finds itself owning metro systems. Cablevision Systems (News - Alert) Corp. is a metro markets operator now buying rural systems.
The fact that cable and telco firms seemingly are moving out of their traditional asset profiles confirms the difficulty access providers are having sustaining high growth rates within their core business realms. That may raise risk profiles to a certain extent, as firms find they must move out of their zones of greatest comfort.
A newly-formed subsidiary of Cablevision will acquire Bresnan in a transaction valued at $1.365 billion. Bresnan is the nation's thirteenth largest MSO with cable operating systems in Colorado, Montana, Wyoming and Utah that pass more than 630,000 homes and serve more than 300,000 basic subscribers.
Cablevision's Chief Operating Officer Tom Rutledge will oversee the Bresnan properties.

Gary Kim (News - Alert) is a contributing editor for TMCnet. To read more of Gary's articles, please visit his columnist page.

Edited by Alice Straight