Cablevision 2011 Annual Report Download - page 13

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Bundled Offers
We offer several promotional packages with discounted pricing to existing and new customers who
subscribe to one or more of our products as compared to the à la carte prices for each individual product.
We also offer other pricing discounts for certain products that are added to existing services. For
example, we offer an "Optimum Triple Play" package that is a special promotion for new customers or
eligible current customers where our three products, video, high-speed data and voice, are each available
for a flat fee per month, generally $29.95, for a year, when purchased together. For a total additional fee
of $9.95 per month, the Ultimate Triple Play, available in our New York metropolitan service area,
includes Optimum Online Boost Plus and a free router for new customers. We have from time to time
also offered promotional and other pricing discounts as part of our competitive strategy.
Subscribers to all three of our service offerings who are not on a promotional pricing plan are eligible for
"Optimum Rewards", which provides subscribers with a monthly discount on their bill, exclusive
discounts and offers for shopping, dining, movie tickets and other benefits.
System Capacity
Our cable plant network in the New York metropolitan service area uses state of the art technology
including fiber optic cable. The network is a minimum of 750 MHz two-way interactive system offering
a combination of analog and digital channels, high-speed data and voice services. Our cable plant
network in the Optimum West service area is on a state of the art hybrid fiber coaxial platform of which
90% of the plant is two-way with a minimum of 750 MHz capacity.
Programming
Adequate programming is available to the cable television systems from a variety of sources. Program
suppliers' compensation is typically a fixed, per subscriber monthly fee (subject to contractual
escalations) based, in most cases, either on the total number of video subscribers of the cable television
systems, or on the number of subscribers subscribing to the particular service. The programming
contracts are generally for a fixed period of time and are subject to negotiated renewal. Cable
programming costs have increased in recent years and are expected to continue to increase due to
additional programming being provided to most subscribers, increased costs to produce or purchase cable
programming and other factors.
Franchises
Our cable television systems are operated in New York, New Jersey, Connecticut, Montana, Wyoming,
Colorado and Utah under non-exclusive franchise agreements, where required by the franchising
authority, with state and/or municipal or county franchising authorities. Although the terms of franchise
agreements differ from jurisdiction to jurisdiction, they typically require payment of franchise fees and
contain regulatory provisions addressing, among other things, upgrades, service quality, cable service to
schools and other public institutions, insurance and indemnity bonds. The terms and conditions of cable
franchises vary from jurisdiction to jurisdiction. Franchise authorities generally charge a franchise fee of
not more than 5% of certain of our cable service revenues that are derived from the operation of the
system within such locality. We generally pass the franchise fee on to our subscribers.
Franchise agreements are usually for a term of 5 to 15 years from the date of grant; most are 10 years.
Franchises usually are terminable only if the cable operator fails to comply with material provisions, and
then only after complying with substantive and procedural protections afforded by the franchise and
federal and state law. As of December 31, 2011, our ten largest franchise areas comprised approximately
44% of our total video customers and of those, two franchises comprising approximately 110,000 video
customers, are expired. We are currently operating in these franchise areas under temporary authority.
The Company has never lost a franchise for an area in which it operates. When a franchise agreement