Cox Communications, Inc. operates as a multi-service broadband communications company. The company’s service offerings primarily include analog and digital video, Internet access and local and long-distance telephone.
The company operates as a cable television provider and offers various broadband products and services to both residential and commercial customers in its markets. It serves approximately 6.7 million customers nationwide, of which approximately 0.9 million customers are subscriber...
Cox Communications, Inc. operates as a multi-service broadband communications company. The company’s service offerings primarily include analog and digital video, Internet access and local and long-distance telephone.
The company operates as a cable television provider and offers various broadband products and services to both residential and commercial customers in its markets. It serves approximately 6.7 million customers nationwide, of which approximately 0.9 million customers are subscribers of cable systems Cox has agreed to sell.
In October 2004, Cox Enterprises, Inc. (CEI), Cox Holdings, Inc. (Holdings), a wholly owned subsidiary of CEI, CEI-M Corporation, another wholly owned subsidiary of CEI, and Cox entered into an Agreement and Plan of Merger. Cox operates as an indirect, wholly owned subsidiary of CEI.
PRODUCTS AND SERVICES
Cox operates in the broadband communications segment, and offers video and Internet access in all of its markets, telephone service in a growing number of markets and new improved services in select markets.
Video
Cox offers customers various video services and packages. As of December 31, 2005, Cox’s cable systems provided video service to approximately 6.3 million customers. Cox’s video service offerings consist of:
Basic Cable: Basic cable includes, for a monthly fee, local broadcast signals available off-air, a limited number of broadcast signals from so-called ‘superstations’, and public, governmental and educational access channels.
Expanded Basic: Expanded service includes, for an additional monthly fee, satellite-delivered non-broadcast programming, such as CNN, MTV, USA, ESPN, A&E, TNT, The Discovery Channel, The Learning Channel, and Nickelodeon.
Premium Services: Premium services include, for an additional monthly fee, satellite-delivered programming that consists principally of feature motion pictures presented without commercial interruption, sports events, concerts and other entertainment programming, such as Home Box Office, Showtime, Starz, and Cinemax.
Pay-Per-View: Pay-per-view service allows customers to order, for a one-time fee, a single showing of a released movie, sporting event or music concert without commercial interruption.
Cox Digital Cable: Digital compression technology allows approximately 12 digital channels to be inserted into the space of one traditional analog channel. A set-top video terminal converts the digital signal into analog signals that can be viewed on a television set. A Cox Digital Cable customer can receive approximately 250 channels, including improved pay-per-view service, digital music channels, new networks grouped by genre and an interactive program guide. Customers pay a monthly fee for digital cable, which varies based on level of service and number of digital converters selected by the customer.
In addition, Cox has introduced new video services:
Entertainment On Demand: Entertainment On Demand (also referred to as video on demand) is an interactive service that provides access to hundreds of movies and other programming with VCR-like functionality, including the ability to pause, rewind and fast forward programs. Customers can also start a program whenever they like, stop the selection before it is completed and view a program repeatedly during the 24 hour rental period. Customers generally pay on a per-selection basis. Cox has already launched Entertainment On Demand in nine markets, and is working with technology vendors and others to make Entertainment On Demand available in additional markets.
High-Definition Television: High definition television is high-resolution digital television. A television signal has twice the color resolution, provides a picture that is six times sharper than that provided by a traditional analog television set and provides improved audio, such as Dolby Digital. Cox offers high definition television service in approximately 90% of its homes passed.
Digital Video Recorders: A digital video recorder is a device that allows customers to store television programming on a hard disk drive so that customers can access this programming at a later time. The digital video recorder functions like a VCR, except that there is no videotape and it offers recording options and playback features. Cox has deployed digital video recorders in all of its markets.
High-Speed Internet Access
Cox offers various packages of Internet access services with varying speed, features and prices. These services are marketed under the brand name of Cox High Speed Internet. These services deliver access to the Internet at speeds of approximately 170 times faster than traditional phone modems and provide online content that capitalizes on the substantial capacity of Cox’s broadband network. Additionally, Cox offers a set of free computer and Internet security software programs designed to help protect its subscriber’s online privacy and identities. Cox also offers home networking as part of its Internet product. A home network is a group of personal computers and other devices that communicate with each other through a common wired or wireless technology. Cox High Speed Internet customers can purchase a home networking product that includes the necessary wired or wireless equipment, a professional installation and 24-hour technical support. There is a one-time installation charge and a monthly fee for ongoing technical support.
Cox Digital Telephone
Cox utilizes the capacity and reliability of its improved broadband network by providing local telephone services and long-distance services. In 2005, Cox launched telephone service in five new markets and serves twenty-two markets in total, representing 73% of its total footprint. In ten of these markets, Cox provides telephone service using VOIP technology. In the remaining twelve markets, Cox has deployed traditional circuit-based technology. In all locations, the service is marketed as primary line phone service under the brand, Cox Digital Telephone.
Cox Business Services
The company, through its fiber optic networks and its hybrid fiber coaxial cable networks, provides business services, such as improved communications services, including Internet access, local and long distance telephone and improved voice and data transport solutions for companies of all sizes.
Cox Media
Cox also sells advertising time on cable networks and digital networks through its advertising sales division, Cox Media. Cox inserts advertising on approximately 73 channels in each of its cable systems. In addition to advertising sales in Cox markets, Cox Media represents the advertising sales efforts of other cable operators. In addition, Cox participates in the national cable advertising market through its investment in National Cable Communications, L.L.C., a partnership that represents cable companies in connection with the sale of advertising space to advertisers.
Investments
Cox has made investments in businesses focused on cable programming, telecommunications and technology.
Discovery Communications, Inc.: Discovery provides nature, science and technology, exploration and adventure programming, and is distributed to customers in virtually all homes receiving cable television in the U.S. The principal businesses of Discovery are the advertiser-supported networks: The Discovery Channel, The Learning Channel, Animal Planet Network, The Travel Channel and Discovery Europe, and the retail businesses of Discovery.com. In addition, Discovery is building a documentary programming library. As of December 31, 2005, Cox had 25.0% ownership interest in Discovery.
TV Works: TV Works (formerly known as Double C Technologies) provides software for digital cable systems. During 2005, Cox holds 33% ownership interest and which is majority owned and controlled by Comcast Corporation. TV Works has acquired substantially all of the North American assets of Liberate Technologies, as well as assets from other strategic companies.
Other: As of December 31, 2005, Cox had ownership interests in ‘In Demand, L.L.C.’ and National Cable Communications, L.L.C., as well as certain other public and private companies in the cable programming, telecommunications and technology businesses.
Franchises
Cable systems are constructed and operated under non-exclusive franchises granted by local governmental authorities that choose to award additional franchises. Franchise agreements typically contain many requirements, such as time limitations on commencement and completion of system construction, service standards, including number of channels, types of programming and the provision of free service to schools and certain other public institutions, and the maintenance of insurance and indemnity bonds. As of December 31, 2005, Cox held approximately 749 cable television franchises.
Significant Events
Cox Communications, Inc. and three other cable television companies have formed a joint venture with Sprint Nextel Corp. that would allow them to offer the quadruple play bundle of telecommunications services. Through this joint venture, Cox and its cable counterparts could offer customers cable television, high-speed Internet, wireline telephone and wireless telephone services. Other cable operators in the joint venture are Comcast Corp., Time Warner Cable and Advance/Newhouse Communications, Inc.
In October 2005, Cox and Cebridge Acquisition Co. LLC (Cebridge) entered into a definitive asset purchase agreement, pursuant to which Cox has agreed to sell cable television systems with approximately 940,000 basic cable subscribers. The cable television systems being sold include certain of Middle America Cox systems (Sale MAC), all of Cox’s West Texas systems, all of Cox’s North Carolina systems, all of Cox’s Greater Oklahoma systems and all of Cox’s Humboldt and Bakersfield, California systems.
In November 2005, Cox entered into a strategic relationship with Comcast Corporation, Time Warner Cable Inc., Advance/Newhouse Partnership and Sprint Nextel Corporation for the purpose of jointly developing, marketing and selling bundled offerings that include Sprint Nextel wireless services and the wireline services of the cable companies (including Cox) to residential and business customers in the respective franchise territories of the cable companies.
In January 2006, Cox announced the signing of a definitive agreement to acquire the Arizona operations of Cable America Corporation serving approximately 35,000 basic subscribers. The sale is expected to be completed by mid-2006. The cable systems are contiguous to Cox’s Arizona cable operation, which services approximately two million customer relationships in 37 communities in Phoenix and Southern Arizona. The agreement provides for the acquisition of cable television systems in Mesa, Florence, Wickenburg, Queen Creek, Coolidge and Gila Bend, as well as Maricopa and Pinal Counties.
Competition
The company’s major competitors include Comcast Corporation; DirecTV; Time Warner; and Echostar Communications Corporation.
History
Cox Communications, Inc. was founded in 1964.
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