A Quebec-based cable company is the target of a hostile takeover by a pair of larger American and Canadian cable operators that would like to divide up the assets for themselves, but have met strong resistance from the family that controls Cogeco and Quebec politicians worried about job losses in the province.

Altice USA, which owns Cablevision/Optimum and Suddenlink in the United States, made an uninvited bid of $7.8US billion on Wednesday to take control of Cogeco, a Canadian cable operator that offers service in parts of Ontario and Quebec, and also owns American subsidiary Atlantic Broadband. If the takeover is successful, Altice has agreed to sell Cogeco’s Canadian assets to telecom giant Rogers, Canada’s largest cable operator.

Louis AUDET, head of Cogeco

The Audet family, which holds 69% of Cogeco’s voting rights and 82.9% of the voting rights at Cogeco Communications through subsidiary Gestion Audem, Inc., quickly rejected the offer.

“Members of the Audet family unanimously reiterated that they are not interested in selling their shares. The family takes pride in its stewardship role in both companies, offering high-quality services to its customers, enriching the communities in which they operate and creating superior returns for shareholders through sound growth strategies,” said Louis Audet, who serves as president of Gestion Audem, Inc.

Cogeco has been a frequently rumored target for an imminent corporate takeover, much like America’s Cablevision was when it was controlled by the Dolan family. Ongoing consolidation among telecom companies in Canada and the United States have disfavored medium-sized cable and phone companies, making them ripe for takeover bids. Cogeco’s unique position in territories where much larger Rogers Cable operates in Ontario and Videotron in Quebec has inspired near-constant rumors that Rogers would acquire Cogeco to complete cable consolidation in Ontario and gain entry into parts of Quebec. Rogers already owns 41% of the subordinate shares of Cogeco and 33% of those of Cogeco Communications, which gives them a minority stake and voice in the company. Partnering with Altice USA to do a deal would spare Rogers from having to arrange a sale of Cogeco’s American operations.

In addition to strong resistance from the Audet family, the transaction immediately was ensnared in the cultural and economic hornet’s nest involving Ontario and Quebec provincial politics. Quebec politicians are highly sensitive to takeovers involving Quebec-based companies, especially those coming from Ontario. In 2000, Rogers’ attempt to acquire Videotron stirred controversy over moving the cable company’s headquarters out of Quebec in favor of Ontario. The fact Rogers is based in English-speaking Canada also did it no favors. French Quebec’s Quebecor acquired Videotron instead.

Once again, political differences between anglophone Ontario and francophone Quebec quickly re-emerged after news of the offer went public.

In an interview with Quebec City radio station CJMF, Quebec’s Premier François Legault immediately dismissed the takeover bid.

“It is out of the question to let this Quebec company move its head office to Ontario,” Legault said. “We talked this morning with Louis Audet […] and we’ll do whatever it takes to keep the head office here.”

Pierre Karl Péladeau, president and CEO of Quebecor, which owns Videotron, also slammed the deal on Twitter, claiming Rogers would eliminate Cogeco’s major corporate presence in Montréal Place Ville Marie, and move everything to Toronto. Péladeau noted Cogeco’s most valuable and experienced employees are not “flying whales” prepared to uproot their lives and relocate to Ontario.

The sensitivity of watching job losses in Quebec in return for job gains in Ontario is not likely to be missed by Quebec’s politicians and could bring significant opposition to a deal if Altice USA sweetens its offer to a level deemed acceptable enough by the Audet family to sell.

Charter Spectrum has introduced a new budget-priced internet plan for households with students, offering a 50/5 Mbps internet connection for $29.99 a month.

Spectrum’s unusual discounted internet plan bypasses the usual paperwork verification that low-cost internet options usually require by contracting directly with area schools that would offer the plan to their existing students. The service is managed by Spectrum Enterprise, a commercial services division at Charter Spectrum.

Connie Lack, a Charter representative who briefed members (sub. req’d.) of Cleveland City Council’s Finance Committee this week about the plan, explained that at least 50 connections per school would be required to offer “Stay Connected K-12” to students. The plan is available to students, teachers, and staff of public, charter and parochial schools.

The plan includes free Wi-Fi service and equipment and offers unlimited access with no data caps or speed throttling. Anyone can access the service, but there must be at least one qualified student in the home to keep the plan.

The plan appears to be Charter’s answer to students that lack quality internet connections at home to take advantage of in-home schooling during the COVID-19 pandemic. But unlike other plans, Spectrum closely partners with educational institutions to market, manage, and maintain the service.

“‘Stay Connected K-12’ allows schools to offer high-speed, cable broadband Internet access direct to students, educators and staff in their homes so learning, teaching and working are uninterrupted,” a brochure about the service explains. “It offers schools and districts flexibility to add locations where access is needed and remove locations when it is no longer required. Schools and districts can simply provide the details of residences in need of access and Spectrum Enterprise takes care of the rest.”

Signing up for service must be handled through a participating school, not Charter Spectrum. Once signed up, Spectrum will send a self-install kit with all necessary equipment and instructions. If your school is currently not enrolled in this program and needs more information, you can share this phone number with school officials so they can get more information: (866) 850-5136.

Just five years after buying DirecTV for $49 billion, AT&T is looking to sell the satellite TV service after losing over 10 million customers because of repeated price hikes, network blackouts, and the ongoing shift to streaming online video.

The Wall Street Journal reported Friday that AT&T was in talks with private equity firms, potentially including Apollo Global Management and Platinum Equity about the possibility of acquiring DirecTV and taking the service private.

Regardless of who buys the service, AT&T might lose $30 billion on the five-year-old venture, buying high and selling low at a price that could drop below $20 billion. AT&T is rapidly losing its television customers. More than six million people have dropped TV packages from AT&T’s U-verse TV and satellite provider DirecTV in the last two years. Craig Moffett, an analyst with MoffettNathanson, told the New York Post even at a rumored discount sale price of $20 billion, AT&T may have “overvalued” the “albatross.”

Moffett is skeptical buyers will close a deal, considering AT&T’s remaining 17.7 million television customers are still in the mood to cancel, with an “astounding” 18% of customers leaving each year.

But even with the customer losses, DirecTV moves a lot of money through its operations, making it at least look attractive on certain buyers’ books. DirecTV’s cash flow helped AT&T’s own unimpressive earnings, adding $22 billion to AT&T’s balance sheet since buying the satellite company. A buyout by a private equity firm could further slowly drain DirecTV by saddling it with debt, secured in part by its still healthy cash flow. A buyer could also attract investors by borrowing even more to pay out handsome dividend bonuses. That could leave DirecTV hopelessly hobbled in debt, leaving DirecTV in an “inevitable” position of having to merge with its chief competitor, Dish Network, or face eventual bankruptcy. If that were to happen, rural Americans could face a satellite TV monopoly as their only choice for live video entertainment.

DirecTV customers report innovation at the satellite service seems to have disappeared since AT&T took over. Very little has changed with the service in the past few years, except for AT&T raising prices and getting stingier with promotions. Many rural DirecTV customers still depend on satellite television because of a lack of over the air reception or broadband service. For these customers, saving money on television service means having to bounce back and forth between Dish Network and DirecTV, trying to keep a discounted promotion active on their account. If the two satellite services eventually merge, that will cease.

After AT&T acquired Time Warner (Entertainment), insiders report many of AT&T’s legacy businesses, including DirecTV and U-verse, have become afterthoughts. AT&T’s bigger priorities now lie with its new 5G wireless service and HBO Max, its new online video service. But the company’s most profitable businesses continue to be cell phone service and selling wired broadband internet access, which together now earns the company over $180 billion annually.

The standard is ready, but cable operators looking to cut costs and network investments are not.

Although major cable operators will gradually begin buying more advanced DOCSIS 4.0-compatible equipment to power their hybrid fiber-coaxial cable networks, some cable engineers are predicting no big hurry for the next cable broadband upgrade, suggesting the existing DOCSIS 3.1 standard is probably good enough for most of this decade.

A favorable regulatory climate under the Trump Administration has given cable companies a reprieve from pressure from Washington regulators and politicians pushing for more upgrades and competition. Cable operators have successfully slowed investment and upgrade schedules, convinced they are likely not going to face traffic congestion or serious threats from new competitors anytime soon.

DOCSIS 4.0 would double the maximum internet speed available from current cable broadband platforms to 10,000 Mbps download and 5,000 Mbps upload speed. The new standard would also dramatically cut network latency, an important factor for applications like video games. But equipment manufacturers and some cable operators don’t see a big hurry for upgrades on the horizon.

Tom Cloonan, chief technology officer of network solutions at CommScope told an audience at the Light Reading-hosted two-day virtual event: Cable Next-Gen Technologies & Strategies, DOCSIS 3.1 is adequate enough for cable operators to stick with through most of this decade, but “it will eventually run out of gas.”

Jeff Finkelstein, executive director of advanced technologies at Cox Communications, agreed, claiming DOCSIS 3.1’s useful life at Cox is at least five to seven years — up to a decade on certain more advanced cable systems equipped to devote more spectrum for upstream traffic.

Until cable operators decide customers need more broadband capacity and faster speeds, many will stick with DOCSIS 3.1 while they gradually upgrade portions of their network to be DOCSIS 4.0 ready. The key factor that will eventually push most operators to upgrade to DOCSIS 4.0 is internet traffic demand. If providers continue to see exponential traffic growth similar to the early months of the COVID-19 pandemic, upgrades will have to come in the next few years. If internet traffic growth can be slowed down, operators can stall upgrades until after 2025. Slowing upgrades will save operators money and DOCSIS 4.0 is designed to be launched at a relatively low cost, especially if network prerequisites can be gradually put into place.

It is also clear most major cable operators with the exception of Altice USA see at least a decade or more of useful life left in their existing hybrid fiber-copper coaxial cable networks. After that, some may elect to begin a move towards fiber to the home service.

The forthcoming conversion of digital over-the-air TV stations from ATSC 1 to ATSC 3.0 will open up space for a new pay TV service that will bundle dozens of local and national channels with a video on demand service selling for as little as $20 a month.

Evoca is launching a consumer trial of its new service in Boise, Ida. in September, with plans to gradually expand service to small and medium-sized communities around the country.

Parent company Edge Networks is still negotiating with programmers, but will eventually sell a package of over 80 channels at a price it claims will be “less than half the cost of cable” TV. New customers will be offered a temporary promotional rate of $20 a month, but the service will eventually cost $49.95 a month. How can it afford to charge less? By offering customers a receiver that combines free, over the air local channels with a lineup of pay cable networks and, eventually, streaming services like Netflix and Hulu. Evoca won’t have to pay local station retransmission fees since customers will be watching those channels directly over the air.

About half of Evoca’s lineup will be delivered over two existing ATSC 3.0 low power TV stations owned by Cocola Broadcasting and leased to Evoca in Boise, compressing 20 encrypted digital channels on each station (KBSE-LD on Channel 33 and KCBB-LD on Channel 34). Boise is located in the Treasure Valley, an optimal place to receive unobstructed low power television signals. Evoca’s set-top box has a connection for a UHF-TV antenna. A basic indoor antenna is offered by the service. ATSC 3.0 signals are expected to be more reliable in fringe reception zones than the existing ATSC 1 standard, which gives Evoca confidence it can supply quality reception. Evoca will also carefully identify which zip codes are likely to receive good reception from the two stations and will not sell the service in areas that cannot get good reception.

The rest of Evoca’s lineup will be delivered over the customer’s home internet connection (at least 5 Mbps recommended). An included set-top box integrates everything together, so customers won’t know or care if they are watching a standard over the air signal, one of Evoca’s compressed and encrypted ATSC 3.0 channels, or a video stream from the internet.  Evoca claims to support both HD and 4K video, where available.

Evoca’s launch market of Boise was not chosen randomly. The company is based in Boise. It will seek to offer the service in cities where cable companies have either given up on selling television packages or charges above average rates for a below average lineup. Most Boise residents are currently served by Sparklight, formerly Cable One, which was among the first to deprioritize selling television service. Sparklight’s still available TV package is costly and many subscribers have dropped it.

Evoca also has an edge attracting older viewers because it will bundle dozens of digital networks like Cozi and Me-TV that favor classic TV shows and movies. These digital over the air channels are often not included on cable lineups.

Evoca TV Trial for Boise Residents

If you live in Boise, you could be among the 200 customers selected for “early access” to Evoca when it launches September 1. Early adopters will receive a free receiver (a $100 value), free antenna, an Evoca t-shirt, and a preview package of 60+ channels for $20 a month until the end of 2021. On January 1, 2022 the price will increase to $49/month. For more information, visit the Evoca website. At the moment, the most compelling channels are those already provided over the air for free, and there are a handful of on-demand services to fill some sizeable gaps in the current lineup. Evoca claims it is close to reaching deals with more familiar cable networks and will bring those to the lineup in the coming months. A cloud based DVR service is also planned for sometime in the future.

Assuming the service achieves success in Boise, expect it to expand to other cities in Idaho and Montana first, then Nevada and Utah, and finally parts of Texas and Oklahoma. The company claims it is interested in providing nationwide service, but that will highly depend on its ability to lease at least two low power television stations in each market it intends to serve. Considering the fact many low power stations are owned by hedge funds or other investors that have parked home shopping or other free-to-air networks on their stations hoping to monetize them later (or offer to close them down so the spectrum can be used by cell phone companies), Evoca may not have too much trouble finding other partners to support an expansion. But reception of low power signals can vary widely, especially in difficult terrain areas.

Evoca produced this video demonstrating how to set up the service. (1:30)