Cablevision 2014 Annual Report Download - page 11

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Bundled Offers
We offer several promotional packages with discounted pricing to existing and new customers who subscribe to two 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 at
a reduced rate for a specified period, when purchased together. We also offer promotional and other pricing discounts as part of
our competitive and retention strategies.
Eligible residential subscribers to all three of our services are entitled to "Optimum Rewards", which provide subscribers with
exclusive discounts and offers for shopping, dining, and other benefits. Additionally, a triple multi-product monthly discount is
available to eligible residential customers not already on certain promotional or discounted pricing plans.
System Capacity
Our cable plant network uses state of the art hybrid fiber/coax architecture with an average of 300 homes per fiber node. The
network is a two-way interactive system with a minimum of 750 MHz offering HD digital channels, high-speed data and voice
services.
Programming
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, on the number of customers 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, and Connecticut 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, service quality, cable service to schools and other public institutions, insurance and
indemnity. 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. We have never lost a franchise for an area in which we
operate. When a franchise agreement reaches expiration, a franchising authority may seek to impose new requirements, including
requirements to upgrade facilities, to increase channel capacity and to provide additional support for local public, education and
government access programming. Negotiations can be protracted, and franchise agreements sometimes expire before a renewal
is negotiated and finalized. New York and New Jersey state laws provide that pre-existing franchise terms continue in force during
the renewal negotiations until agreement is reached or one or both parties seek to pursue "formal" franchise remedies under federal
law. As of December 31, 2014, our ten largest franchise areas comprised approximately 57% of our total video customers and of
those, two franchises, Newark, New Jersey and the Town of Hempstead, New York, comprising an aggregate of approximately
136,000 video customers, were expired. The Newark, New Jersey franchise agreement was renewed in January 2015. We are
currently lawfully operating in the Town of Hempstead, New York franchise area under temporary authority recognized by the
State of New York. Federal law provides significant substantive and procedural protections for cable operators seeking renewal
of their franchises. See "Regulation - Cable Television". Despite our efforts and the protections of federal law, it is possible that
one or more of our franchises may be subject to termination or non-renewal or we may be required to make significant additional
investments in response to requirements imposed in the course of the franchise renewal process.