Cablevision 2012 Annual Report Download - page 8

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Telecommunications Services
General
Cable television is a service that delivers multiple channels of video programming to subscribers who pay
a monthly fee for the services they receive. Video signals are received over-the-air, by fiber optic
transport or via satellite delivery by antennas, microwave relay stations and satellite earth stations and are
modulated, amplified and distributed over a network of coaxial and fiber optic cable to the subscribers'
television sets. Cable television systems typically are constructed and operated pursuant to non-exclusive
franchises awarded by local and state governmental authorities for specified periods of time.
Our cable television systems offer varying packages of video service. Our video service is marketed
under the Optimum brand name. Our video services may include, among other programming, local
broadcast network affiliates and independent television stations, certain other news, information, sports
and entertainment channels such as CNN, AMC, CNBC, ESPN, MTV, The NFL Network and regional
sports networks such as MSG Network, and certain premium services such as HBO, Showtime, The
Movie Channel, Starz, Encore and Cinemax. We also offer interactive video service, which enables
customers to receive video on demand and subscription video on demand services, as well as interactive
entertainment and advertising services.
Our cable television revenues are derived principally from monthly fees paid by subscribers. In addition
to recurring subscriber revenues, we derive revenues from the sales of pay-per-view movies and events,
video on demand and subscription video on demand program services, from the sale of advertising time
on advertiser supported programming and from installation and equipment charges. Certain services and
equipment provided by substantially all of our cable television systems are subject to regulation. See
"Regulation - Cable Television."
We also provide high-speed data services using our cable television broadband network. High-speed data
services are provided to residential and small business customers through a cable modem device. The
high-speed data service is marketed as "Optimum Online".
We offer VoIP technology services exclusively to our residential and small business Optimum Online
customers, marketed as "Optimum Voice".
Through Lightpath, a business broadband service provider, we provide telecommunications services, such
as Ethernet-based data, Internet, voice and video transport solutions and managed services, to the business
market in the New York metropolitan area. As of December 31, 2012, Lightpath had over 5,800
buildings connected to its fiber network. Lightpath has built an advanced fiber optic network extending
more than 5,200 route miles, which includes approximately 274,000 miles of fiber, throughout the New
York metropolitan area. Optimum Business Services provides similar products in our Optimum West
service area.
Superstorm Sandy
On October 29, 2012, Superstorm Sandy made landfall in the New York metropolitan area, resulting in
widespread power outages and service disruptions for almost 60% of our customers in this service area, as
well as damage to certain portions of our cable network. Although the majority of our impacted
customers experienced temporary power outages, in certain areas of our footprint, the damage to
customers' homes was significant. We issued service outage credits to customers who contacted us once
their power was restored. We have also recorded estimated credits for customers who we expect will
contact us. Additionally, we have incurred significantly higher salary and overtime costs, third-party
labor costs, and repair costs associated with the efforts needed to restore services. As of December 31,
2012, customer service credits and incremental costs incurred, net of programming and other cost savings,
were approximately $114.7 million, including capital expenditures of $5.6 million, for our