Gov. Jim Hunt

INFORMATION HIGHWAYS ANNOUNCEMENT
Governor Jim Hunt

May 10, 1993

Today North Carolina takes a giant step forward into our future.

This Fall, North Carolina will link up the most advanced telecommunications network of its kind in the world — a network that will ensure that the state will be a leader in the 21st century.

The network will reach into every corner of our great state. It will connect our cities with our towns, our schoolhouses and our courthouses, our hospitals and clinics — our people all across the state.

Early in this century, North Carolina came to be known as the “Good Roads State.” We discovered a new technology — and started paving roads. Those roads began moving people and products in ways never before possible.

Today we reach out for a new technology — a new kind of highway. The North Carolina Information Highway.

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I was unable to attend this morning’s meeting of the Senate Commerce Committee, but just received a text message from Senator Don Vaughn, who represents me, indicating they sent SB 1004 to the “study committee.”

It has been a wild ride the last two days.  There was an estimated 150 people in the House Committee meeting yesterday.  Everyone from ordinary consumers like us, mayors of cities interested in our fight, to the pro-business/cable “Americans for Prosperity” who showed up wearing anti-communism buttons.

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It’s back again.  For at least the last decade, the trade press has speculated about whether Cablevision would survive as an independent cable operator in an increasingly concentrated industry, where the big players get bigger, and the smaller operators exit the cable business.

Charles Dolan, Cablevision CEO

The Dolan family, which has owned Cablevision since its founding on Long Island, is routinely said to be cash crunched, looking for a healthy cash bonanza on the way out the door, or dealing with internal family dramas which pit those advocating a sell off against those who wish to keep the business running.  When Cablevision launched its Voom HD satellite service, which turned out to be a disaster and money pit, the intensity of speculation achieved a fever pitch, and that was several years ago.  The Dolan family still runs Cablevision.

The New York Times sports page, of all places, is the latest home of pondering a sell off of Cablevision’s remaining cable systems to Time Warner Cable to raise cash for the Dolan family’s sports ventures, including ownership of the Rangers, Knicks, and Madison Square Garden.  It was all borne from a single line in the latest earnings report from Cablevision, which indicated the company intended to “explore the spinoff of its Madison Square Garden business.”

Cablevision's Service Area in Northeastern US

Cablevision’s bread-and-butter business is supplying cable television, broadband lines and Internet phone service to 3.1 million subscribers in the New York metropolitan area. The company, based in Bethpage, N.Y., has faced stiff competition from Verizon, which has spent heavily to build a fiber-optic network that competes with it and Time Warner Cable.

Industry analysts have speculated that Cablevision may eventually sell the entire company to Time Warner Cable, or sell its sports entertainment group to raise cash to compete in the cable business.

“Cablevision watchers [and we’d put ourselves in that category] have long pondered possible endgames, and the notion that the Dolans would retain ownership of MSG and the New York sports teams long after the rest of the assets had been divested has always been viewed as among the most likely outcomes,” Craig Moffett, a senior analyst at Bernstein Research wrote in a report after Cablevision’s earnings release Thursday morning.

People have grown old pondering questions like this.  Cablevision is positioned to compete just fine with Verizon FiOS after completing an aggressive rollout of DOCSIS 3.  Cablevision does not compete with Time Warner Cable at all.  Industry boosters have traditionally cheered on consolidation efforts, so it’s no surprise even the smallest tidbit will restart the Spec-U-Plex all over again.  Should Cablevision decide to sell, Time Warner Cable would almost certainly be the buyer, because their largest cluster of systems are adjacent to existing Time Warner franchise areas.  But I wouldn’t be in a hurry to shove the Dolan family out the door.

The companion bill in the North Carolina Senate that would have effectively killed municipal networks across the state has gone the way of the House bill HB 1252 — into the black hole of the “study committee.”  While the issue may yet re-emerge after it “has been studied,” it’s dead for now.  Thank you to everyone in North Carolina who responded with an outpouring of calls and e-mails to elected officials in the Senate after big cable tried a sneak attack to ram this through this morning.

This is your third victory for consumer rights in less than a month.  We’re on a roll!

Sneaking in the backdoor - the Senate companion bill scheduled for tomorrow morning!

[12:40am ET Thursday Morning – Added More Contact Information, Expanded Article] I have just been informed big cable and their lobbying friends are going to try to pull a fast one on us in North Carolina.  Sometimes you successfully defeat them at the front door while they sneak in the back.  That is precisely what they are going to try tomorrow morning.

Brian Bowman, Public Affairs Manager for the city of Wilson, just informed us that Senate Bill 1004, the companion hit-piece on consumers to HB 1252, has been moved up for consideration in a Senate committee tomorrow morning bright and early.

In a sneak attack, the industry hopes to breeze through the approval process on the Senate side after failing in the North Carolina House of Representatives.  So unless you get on the phone right now and make those calls, today’s victory could become tomorrow’s defeat.  Allowing big cable and telco lobbies to get their foot jammed in the back door is a consumer catastrophe.

It’s clear the industry people have already camped out in several offices and have brought the pizza and coffee.  When Bowman called one of the chairperson’s offices to confirm the time, the administrative assistant literally handed the phone to a cable company employee to explain the bill! How nice of them.

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