Mediacom Wants Old Subscribers Back

Mediacom Communications reported its best third-quarter results since 2002, with revenue up 11% to $305.6 million and cash flow up 10.3% to $110.8 million.

But subscriber metrics were mixed. While Mediacom continued to pare basic-subscriber declines -- it lost 6,000 basic customers in the period versus a loss of 17,000 in the same period last year -- digital and high-speed-data additions appeared to slow.

Mediacom added 18,000 digital customers in the quarter compared with 22,000 last year, and high-speed-Internet additions, at 28,000 in the period, were only slightly better than the 27,000 the MSO added during the same period in 2005.

The Middletown, N.Y.-based cable company also added about 17,000 telephone customers in the period, down from 20,000 additions in the second quarter. However, if adjusted for bad-debt disconnects of 3,000-4,000 telephone customers in the period, third-quarter growth would have been even with the previous period.

Mediacom ended the period with about 83,000 telephone customers and said the service is available in about 65% of its total footprint. That should expand to 80% by the end of the year.

Executive vice president of operations John Pascarelli said on a conference call with analysts that one of the company’s goals is to win back customers who have left Mediacom for satellite service or for telephone companies offering a package of video (through satellite), voice and digital-subscriber-line high-speed-Internet service.

He added that Mediacom is investigating offering triple-play packages to those former customers.

“We’re going to come up with a little more aggressive offers to those households,” Pascarelli said. “We’ll give them some long-term commitments on pricing for our bundled products, and it will probably be below, on a targeted basis, the $99 [per month] offer. We’re testing some things right now that we’re planning on using. We’ll be using probably more direct sales next year to hit every home.”

Mediacom chairman Rocco Commisso also addressed the company’s recent battle with Sinclair Broadcast Group over retransmission consent ( Commisso said that on Sept. 28 “at exactly 3:48 p.m.,” Sinclair broke off negotiations with Mediacom and pulled the plug on its broadcast stations in Mediacom territories.

Mediacom filed an antitrust suit against Sinclair in federal court in Iowa last month, and it filed a compliant with the Federal Communications Commission Tuesday to force Sinclair back to the negotiating table and to allow Mediacom to carry the stations while it works out the dispute.

“We are ready to sit down with Sinclair at any time or any place to negotiate a fair market-driven deal,” Commisso said on the conference call. “We have already told Sinclair that we’re asking for nothing better or nothing worse than the deals they have already claimed to have negotiated with Comcast or Insight [Communications]. Alternatively, they can have any deals we have negotiated with any of the other 475 stations in our markets.”

Later, Commisso said the dispute primarily revolves around pricing and bundling, although he would not reveal what price Sinclair is asking for. According to Mediacom, Sinclair desired to bundle its major network-affiliate stations -- ABC, NBC, CBS and Fox -- with stations affiliated with fledgling broadcasters MyNetworkTV and The CW.

“We told them we were not interested in carrying those stations because they are unproven and not worth the price they were asking for. Their strategy was it’s all or nothing,” Commisso added.