Cox Playing Hardball on Sports TV

"We hit the ball out of the park," executive vice president of operations Pat Esser told analysts on a conference call Tuesday morning. "Seasonality in our business is obviously very real."

Showing strong results in additions of two other key advanced services -- telephone and digitally transmitted video -- Cox said it was having strong success in selling advanced services to people as they were signing up for basic services -- or, using the company's terminology, getting "sell-in." In the third quarter, 47% of new basic video customers also signed up for digital video, and 30% of new basic customers also took telephone service.

Hardball

Responding to an analyst's question about Cox's goals and options in sports programming negotiations, Robbins said that ideally, Cox would pay programming fees at the same level as the company currently does, or pay a "little bit of an increase." Should Cox be unable to get "reasonable terms," suggested Robbins, the company could -- alluding to the analyst's question -- drop a channel from its lineup. "We're prepared to if we have to."

In other items of interest for cable-watchers, Cox -- currently the most energetic among cable operators in offering telephone service over cable -- said it would Internet-protocol telephony in Roanoke, Va. That would make Roanoke the company's 12th telephone market and its first VoIP market.

Cox also said it would start offering tiered high-speed Internet service in addition to its $40-a-month flagship service. The company expects to offer a product in the $20 to $30 per-month range that's faster than dialup but "significantly slower" than the flagship service, which generally permits downloads at rates up to 3 megabits per second.

It also expects to offer a much faster service, with additional features, at prices up to $80 per month. The company indicated it didn't believe that the cheapest level of service would cannibalize higher-priced broadband subscriptions.

Looking ahead to the remaining months of the year, Cox raised guidance for the number of advanced-service customer additions, and said operating cash flow growth would be in the range of 18% to 19%, up from the prior range of 17% to 18%.

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