A new wave of industry consolidation has begun to pick off smaller independent cable operators who find profits squeezed by increased programming costs and dwindling subscriber numbers.

This month, the private equity firms that back Atlantic Broadband have put the company up for sale. ABRY Partners, which controls the cable venture as well as much larger RCN and Grande Communications, is ready to ditch the Atlantic venture and its 255,000 subscribers in Pennsylvania, New York, West Virginia, Florida, Maryland, Delaware, and South Carolina. Most of the cable systems controlled by Atlantic Broadband were considered “non-strategic assets” by former owner Charter Communications, which sold them to the Atlantic Broadband start-up in 2004.

Although profitable, Atlantic has been losing customers — 4 percent last year alone — and that worries investors. Acquiring television programming continues to grow more difficult for smaller operators who do not receive the volume discounts larger players do. As programming costs rise, pressure on profit margin results.

Atlantic Broadband was the 14th largest cable operator in the country. The sale could bring $1.4 billion to the equity firms, and industry analysts predict another equity firm will likely emerge as the buyer. Most of Atlantic’s systems are outside of the the areas where large cable operators create enormous regional clusters of operations. Time Warner Cable dominates in New York, Comcast in Pennsylvania, Maryland, and Delaware, and Suddenlink in West Virginia.

Atlantic Broadband is not the first smaller cable venture to find itself for sale.

• Time Warner Cable acquired Insight Communications last August;
• WideOpenWest announced plans to buy Knology for $750 million in April;
• WaveDivision Holdings LLC, which serves more than 325,000 residential and business customers in Washington, Oregon and California, also is exploring a sale.

Time Warner Cable and Viacom have ended their dispute over whether the cable company had the right to stream Viacom-owned cable networks over its lineup of streaming apps for portable devices and home computers.

This means the cable company will be restoring streams of Comedy Central, MTV, VH1 and other Viacom networks over the coming weeks.  In return, Time Warner Cable has agreed to carry/continue Viacom’s Country Music Television on its cable systems.

From the official statement:

Viacom and Time Warner Cable have agreed to resolve their pending litigations. All of Viacom’s programming will now be available to Time Warner Cable subscribers for in-home viewing via internet protocol-enabled devices such as iPads and Time Warner Cable will continue to carry Viacom’s Country Music Television (CMT) programming. In reaching the settlement agreement, Time Warner Cable and Viacom were also able to resolve other unrelated business matters to their mutual satisfaction. Neither side is conceding its original legal position or will have further comment.

The dispute had no effect on traditional cable carriage of these networks. Only online streaming was impacted.

Shaw Cable has pulled the plug on its complimentary cable radio service on Vancouver Island, which used to provide enhanced FM reception of radio services from across the province and from the United States.

Listeners in the Vancouver area never received notification the service was being terminated, and a Shaw spokesman said the company did not bother because it was a free service delivered to cable customers.

Some listeners called the loss of more than 20 FM stations devastating, leaving them with as few as three clear stations, and no reception of CBC Radio 2 from Canada’s public radio network.

Kerry Hunt, Shaw’s regional manager for Vancouver Island, said the company is phasing out the FM radio service in order to increase Internet speeds and make room for additional digital cable channels.

“Nobody is installing FM anymore,” Hunt told Canada.com. “It’s just a service that is very rarely even being used.”

Gone for some B.C. listeners

Hunt called cable radio anachronistic in the digital and Internet age, and those customers who value the service are now being pushed to use Internet streaming services, offered by many of the stations listeners lost. But those streams count against the company’s Internet Overcharging usage caps, and with many of cable radio’s fans among the less-computer-savvy elderly, the expense to add broadband service to continue listening to radio stations they used to receive for free is a hardship.

Cable radio service is a legacy service, originally introduced in the 1970s and 1980s to provide enhanced radio service to cable-TV subscribers over cable-wired FM receivers. Some cable systems delivered national radio superstations, college stations not available over the air, or distant regional radio signals not well received by cable subscribers.

The Canadian Radio-television and Telecommunications Commission used to require all Canadian cable operators provide the service, converting all area AM signals for FM reception. Those rules have been considerably relaxed, and today most cable operators deliver the bare minimum, including one CBC Radio service, over its set top cable boxes.

Shaw says it plans to gradually discontinue cable radio service across its entire coverage area.

Former Comcast customers throughout southern Illinois and north/central Indiana are saying goodbye to Comcast’s 250GB monthly usage cap now that a new service provider has arrived.  NewWave Communications acquired Comcast properties in the lesser-populated parts of the two states and is upgrading service to areas Comcast ignored for years.

For customers in Olney, DuQuoin, Pickneyville, Mt. Carmel and Benton, Ill., cable system upgrades will soon allow NewWave to provide cap-free 50/5Mbps speeds to homes and businesses.  The upgrades are long overdue.  NewWave often copes with customer criticism regarding the deteriorating cable systems it inherited from other providers.  Customers have previously accused the company of overselling their broadband service and for service outages.  Upgrades generally quiet the complaints.

NewWave Communications, headquartered in Sikeston, Mo. serves over 80,000 customers in the midwest and southeast United States, specializing in smaller communities larger providers typically ignore.  Comcast has spent most of its money and attention in larger cities in Indiana and northern Illinois, and although the company sometimes provide a range of services in more rural communities, upgrades typically came much later.

NewWave’s plan for success involves bringing advanced services to its mid-sized city service areas with the hope it will attract more service bundling and a bigger revenue stream.  NewWave will offer triple play packages of phone, cable, and broadband service and is introducing digital video recorders to a larger share of its customers.

The company has shown no signs of fearing the word “unlimited,” touting it in their literature for phone and broadband service.

One of the country’s smallest cable operations grew a little bigger this month with the acquisition of 113 US Cable-owned systems in rural Wisconsin and Minnesota.

Approximately 33,000 customers in communities like Brewster, Heron Lake, Okabena, and Round Lake will be transitioned from New Jersey-based US Cable to Midcontinent this fall.

They will join over 275,000 Midcontinent customers in North and South Dakota, Minnesota, and Wisconsin.  US Cable sold the cable systems as the company continues to unwind its partnership with Comcast.

Midcontinent intends to beef up its customer service operations by opening a new call center in West Fargo, N.D.

Eventually, US Cable subscribers will find their Internet services transitioned to Midcontinent, which delivers service over a reasonably advanced hybrid fiber-coaxial network.