Efforts by The Weather Channel — thrown off DirecTV over a fee dispute — to suggest its replacement is inadequate may have taken a hit this morning when WeatherNation announced a significant expansion of its weather network.

WeatherNation is largely unknown outside of the 20 million DirecTV subscribers that found the Colorado-based weather network on their lineup instead of The Weather Channel in mid-January. Now the weather network has announced expanded weather services for DirecTV subscribers:

• Local Weather Now: Access customized local weather information at the zip code level. DirecTV subscribers can tune to Ch. 362, press the red button on their remote, and access local weather and forecasts. Local weather information will also be inserted into the live WeatherNation broadcast and run every 10 minutes;
• Severe Weather Mix: In early March, WeatherNation will activate Severe Weather Mix during major weather events showing up to six concurrent feeds of weather information, including coverage from local broadcast stations, where available, live remotes from meteorologists in affected areas, live radar with storm tracking information, NOAA weather alerts, and live coverage from top cable news channels including CNN and Fox News.

With the Canadian cable business locked up by Shaw, Rogers, and Vidéotron, Ltd., suburban Ontario and Quebec cable operator Cogeco announced intentions to acquire at least one small U.S. cable company later this year after it pays down more debt.

CEO Louis Audet told shareholders that cable operators in Canada are large, very profitable, and absolutely not for sale. That leaves few growth opportunities for the fourth largest cable operator in Canada. Instead of spending money to expand its current footprint into unserved areas, the company will look south of the border for buying opportunities.

Audet

“What you see is pretty much what you get unless something really special comes out of left field,” Audet said. “The potential exists in the U.S. where it doesn’t in Canada.”

Cogeco’s financial resources are too limited to challenge the three largest cable operators in the country, and Audet said Cogeco has no intention of selling its own business. In eastern Canada where Cogeco provides service, Rogers Communications would be the most likely to buy Cogeco. Rogers tried, and failed, to acquire Quebec-based Vidéotron in 2000 — losing out to media conglomerate Quebecor. But Rogers did succeed in picking up Shaw’s Ontario-based Mountain Cablevision, Ltd. last January.

Cogeco has pursued other cable companies outside of Canada in the past. Its acquisition of Portugal’s Cabovisao in 2006 was widely panned, and after Portugal’s economy crashed in the Great Recession, Cogeco ended up writing off its net investment, taking a $56.7 million loss. Cogeco acquired Cabovisao for $660 million and sold it to ALTICE six years later for the fire sale price of $59.3 million.

In 2012, Cogeco acquired rural and small city cable operator Atlantic Broadband for $1.36 billion. Atlantic offers service in Pennsylvania, Florida, Maryland, Delaware, and South Carolina — mostly in communities ignored by Comcast and Time Warner Cable.

Possible Cogeco acquisition targets include Cable ONE, WOW!, Wave Broadband, SureWest/Consolidated Communications, Midcontinent Communications, Buckeye Cable, and/or Blue Ridge Communications, to name a few.

In the meantime, Cogeco is following the lead of U.S. cable operators by intensifying service expansion in commercial areas, particularly industrial parks and office complexes. Selling larger businesses cable broadband could net Cogeco $600-1,200 a month per account.

While cable companies continue to point to growing subscriber numbers for premium movie channels as evidence cable cord-cutting is not taking its toll, the owner of the country’s largest pay movie channel has undercut their argument.

Time Warner (Entertainment), owner of HBO, disclosed to investors recently that although the network picked up nearly two million new subscriber in the United States, most of those were watching the network for free through temporary promotional offers.

Free or discounted offers for premium movie networks are not uncommon. Time Warner Cable frequently bundles a one-year subscription to Showtime/The Movie Channel in its promotions. HBO and Cinemax are often offered for 3-6 months at no charge by other pay television providers.

Many viewers drop the network(s) (or negotiate another free viewing promotion) when charges start appearing on their bill. For years, premium movie channels cost around $13 a month, and many cable operators sold extra premium channels at a discounted $7 a month. But prices have risen dramatically over the last five years. Time Warner Cable, for example, now charges $15.95/mo for HBO, Cinemax, Showtime, and/or Starz.

Because of higher prices, HBO’s subscription revenue of $1.3 billion during the fourth quarter was up 8% year over year.

Federico Consulting has the Kansas Cable Lobby as a paying client and works behind the scenes in the state legislature to push their agenda.

A cable industry lobbying group wrote the bill introduced last week in the Kansas Senate that could dramatically restrict municipal broadband networks from launching and hamper Google Fiber from expanding its gigabit broadband network outside of Kansas City.

A Kansas Senate employee told Ars Technica the proposed bill – SB 304 was submitted for introduction in the state legislature by John Federico, president of Topeka-based lobbying firm Federico Consulting, on behalf of the Kansas Cable Telecommunications Association (KCTA). The cable industry trade association counts among its members: Cable ONE, Comcast, Cox Communications, and Time Warner Cable — the largest cable operators in the state.

Joshua Montgomery, a Kansan directly affected by the possible passage of SB 304, notes the legislation could also impact Google’s efforts to expand its gigabit broadband network outside of Kansas City, Kan., because the project relies on a close working relationship between local city officials and Google that would be prohibited under the bill.

“Even joint partnerships like the one between Google and Kansas City would be illegal under this bill.” Google Fiber, he pointed out, came to Kansas City after Google received what the Competitive Enterprise Institute called “stunning regulatory concessions and incentives from local governments, including free access to virtually everything the city owns or controls: rights of way, central office space, power, interconnections with anchor institutions, marketing and direct mail, and office space for Google employees.”

Federico denied the proposed legislation has anything to do with Google, telling Ars Technica Google never came up during KCTA board meetings. But Federico did admit the current bill’s definition of “unserved” is “overly broad.”

Federico evidently had enough sway with the Kansas Senate Committee to postpone a hearing on the bill scheduled for Tuesday until the bill can be “tweaked.”

“I don’t know about you, but I think we should all be concerned that the cable lobby is writing our telecommunications policy,” Montgomery said on his group’s Facebook page now organizing to oppose the bill.

[flv]http://www.phillipdampier.com/video/Bloomberg Anatomy of a Deal 1-29-14.flv[/flv]

Bloomberg News’ Alex Sherman and Porter Bibb, managing partner at Mediatech, break down the background and potential moves in the cable industry involving Comcast, Charter Communications and Time Warner Cable and the regulatory hurdles in their way on Bloomberg Television’s “Market Makers.” One interesting development will be the future of Cablevision, which will be an obvious takeover target for Comcast should Time Warner Cable be sold and split up. (9:14)