Time Warner Cable 2008 Annual Report Download - page 18

Road Runner. TWC offers four tiers of its Road Runner
TM
high-speed data service in all of its systems:
Turbo
TM
, Standard, Basic and Lite and, in New York City, it also offers Extreme. Generally, each tier offers different
speeds at a different monthly fee, although TWC is testing consumption-based pricing in one of its operating areas.
In TWC’s more advanced operating areas, Turbo offers subscribers speeds of up to 20 mbps downstream and 2 mbps
upstream. In addition, in the majority of its systems, TWC provides Turbo subscribers with Powerboost
TM
, which
allows users to initiate brief download speed bursts when TWC’s network capacity permits, and it is in the process
of rolling Powerboost out to its Standard subscribers.
TWC’s Road Runner service provides communication tools and personalized services, including e-mail, PC
security, parental controls, news groups and online radio, without any additional charge. The Road Runner portal
provides access to content and media from local, national and international providers and topic-specific channels,
including entertainment, games, news, sports, travel, music, movie listings and shopping sites. In addition, in 2008,
TWC launched the Road Runner Video Store, which permits subscribers to rent or purchase television shows and
movies for online viewing.
TWC provides high-speed data service over its hybrid fiber coax (“HFC”) network using Data Over Cable
Service Interface Specification (“DOCSIS”). In the majority of its systems, TWC has deployed DOCSIS 2.0, and it
plans to deploy DOCSIS 3.0 selectively in its systems during 2009, which will enable TWC to deliver speeds
significantly faster than currently achievable.
In addition to Road Runner, most of TWC’s cable systems provide their high-speed data subscribers with
access to the services of certain other on-line providers, including Earthlink.
Voice Services
Digital Phone. TWC offered its Digital Phone service to nearly all of its homes passed as of December 31,
2008. Most Digital Phone customers receive unlimited local, in-state and U.S., Canada and Puerto Rico calling and
a number of calling features, including call waiting, caller ID and Enhanced 911 (“E911”) services, for a fixed
monthly fee. TWC also offers additional calling plans with a variety of options that are designed to meet customers’
particular needs, including a local-only calling plan, an unlimited in-state calling plan and an international calling
plan.
The following table presents selected statistical data regarding TWC’s residential Digital Phone subscribers:
2008 2007 2006
December 31,
(in thousands, except percentages)
Homes passed
(a)
............................................... 25,941 24,611 16,623
Residential Digital Phone subscribers
(b)(c)
............................ 3,747 2,890 1,860
Residential Digital Phone penetration
(d)
............................. 14.4% 11.7% 11.2%
(a)
Homes passed represent the estimated number of Digital Phone service-ready single residence homes, apartment and condominium units
and commercial establishments passed by TWC’s cable systems without further extending the transmission lines.
(b)
Residential Digital Phone subscriber numbers reflect billable subscribers who receive a residential internet protocol (“IP”)-based telephony
service. Residential Digital Phone subscriber numbers as of December 31, 2007 and 2006 exclude 9,000 and 106,000 subscribers,
respectively, who received traditional, circuit-switched telephone service.
(c)
The determination of whether a Digital Phone subscriber is categorized as commercial or residential is generally based upon the type of
service provided to the subscriber. For example, if the Company provides a commercial service, the subscriber is classified as commercial.
(d)
Residential Digital Phone penetration represents residential Digital Phone subscribers as a percentage of Digital Phone service-ready homes
passed.
Commercial Services
TWC has provided video, high-speed data and network and transport services to commercial customers for
over a decade. During 2007, TWC began selling Business Class Phone to small- and medium-sized businesses in the
majority of its operating areas and substantially completed the roll-out in the remainder of its operating areas during
2008. The introduction of Business Class Phone enables TWC to offer its commercial customers a bundle of video,
high-speed data and voice services and to compete against bundled services from its competitors.
8