Time Warner Cable 2009 Annual Report Download - page 16

(“Dedicated Internet Access”). The downstream and upstream speeds for Dedicated Internet Access service are generally up to 1 Gbps.
Customers may add to their Shared Internet Access or Dedicated Internet Access certain additional services, including managed storage,
web hosting and personal and managed data security. In addition, TWC expects to begin offering its wireless mobile broadband service,
Time Warner Cable Business Class Mobile, to commercial customers in certain of its service areas during 2010.
Commercial subscribers pay a fixed monthly fee based on the services received. Due to their different characteristics, commercial
subscribers are charged at different rates than residential subscribers. As of December 31, 2009, TWC had 295,000 commercial
high-speed data subscribers.
Commercial networking and transport services. TWC offers Metro Ethernet service that provides high capacity connections to the
Internet for commercial customers with geographically dispersed locations with speeds ranging from up to sub-T1 to up to 10 Gbps.
TWC’s Metro Ethernet service can also extend the reach of the customer’s local area network or “LAN” within and between metropolitan
areas.
In addition, TWC offers point-to-point transport services to wireless telephone providers, Internet services providers and
competitive carriers on a wholesale basis.
Voice Services
TWC offers its commercial voice service, Business Class Phone, to a broad range of businesses. Business Class Phone is a multi-line
voice service developed for small businesses, which provides unlimited local, intrastate and long distance calling, along with other key
business features, such as call restrictions, non-verified account codes and three-way call transfer. During 2009, TWC also began offering
Business Class PRI, which is designed for medium-sized businesses and supports up to twenty-three simultaneous voice calls on each
two-way trunk line.
Due to their different characteristics, commercial Business Class Phone subscribers are charged at different rates than residential
Digital Phone subscribers. At December 31, 2009, TWC had 67,000 commercial voice subscribers.
Advertising
TWC earns revenues by selling advertising to national, regional and local customers. As part of the agreements under which it
acquires video programming, TWC typically receives an allocation of scheduled advertising time in such programming, generally two or
three minutes per hour, into which its systems can insert commercials, subject, in some instances, to certain subject matter limitations.
The clustering of TWC’s systems expands the share of viewers that TWC reaches within a local designated market area, which helps its
local advertising sales business to compete more effectively with broadcast and other media. In addition, TWC has a strong presence in
the country’s two largest advertising market areas, New York, NY, and Los Angeles, CA.
In many locations, TWC has formed advertising “interconnects” or entered into representation agreements with contiguous cable
system operators to deliver locally inserted commercials across wider geographic areas, replicating the reach of the local broadcast
stations as much as possible. TWC also sells the video advertising inventory of certain regional sports programming networks. In
addition, TWC’s local cable news channels, VOD offerings and online services, such as Roadrunner.com, provide it with opportunities to
generate advertising revenue.
Advanced Advertising
TWC is exploring various means to use its VOD and other advanced capabilities to deliver to television advertisers the same kind of
advanced advertising offerings and measurement data currently available to Internet advertisers, as well as to attract advertising that
would otherwise be placed with other media, such as print and direct mail. For example, in several geographic areas, TWC provides
overlays that enable video subscribers with a TWC-provided digital set-top box to request additional information regarding certain
advertised products using the remote control, to “telescope” from a traditional advertisement to a long-form VOD segment regarding the
advertised product, to vote on a relevant topic or to receive more specific additional information. In addition, in 2009, TWC launched
certain digital offerings, such as Promotions on Demand, which enable video subscribers to use their remote control to request that
coupons, samples and/or brochures be sent to their home. These tools are used to provide advertisers with important feedback about the
impact of their advertising efforts and the value of enhancing the video experience with interactive features. TWC also currently provides
anonymized VOD and enhanced TV viewing data to its programming partners.
In 2008, TWC and certain other cable operators formed Canoe Ventures LLC (“Canoe”), a joint venture focused on developing a
common technology platform among cable operators for the delivery of advanced advertising products and services to be offered to
programmers and advertisers. One component of Canoe’s strategy is to enable TWC and the industry as a whole to expand their
measurement capabilities in order to provide anonymized viewing data to marketers and strategic partners to serve as the foundation of its
advanced advertising platform.
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