Time Warner Cable 2014 Annual Report Download - page 14

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Regional Sports Networks and Local Sports, News and Lifestyle Channels
In October 2012, TWC launched the Lakers’ RSNs that carry the Los Angeles Lakers’ basketball games as well as
other regional sports programming. TWC has a long-term agreement with the Los Angeles Lakers for rights to distribute
all locally available pre-season, regular season and post-season Los Angeles Lakers’ games. As of December 31, 2014,
the Lakers’ RSNs were distributed by the majority of major video distributors to approximately 5.1 million subscribers.
TWC also manages 31 local news channels, including Time Warner Cable News NY1, a 24-hour news channel focused
on New York City, 16 local sports channels and four local lifestyle channels, and it owns 26.8% of Sterling Entertainment
Enterprises, LLC (doing business as SportsNet New York), a New York City-based regional sports network that carries
New York Mets’ baseball games as well as other regional sports programming.
In February 2014, American Media Productions, an unaffiliated third party, launched SportsNet LA, a regional sports
network carrying the Los Angeles Dodgers’ baseball games and other sports programming. In accordance with long-term
agreements with American Media Productions, TWC acts as the network’s exclusive advertising and affiliate sales agent
and has certain branding and programming rights with respect to the network. In addition, TWC provides certain
production and technical services to American Media Productions. The Company continues to seek distribution
agreements for the carriage of SportsNet LA by major distributors.
Distribution of Services
TWC delivers video, data and voice services over a network that includes a nationwide fiber backbone, fiber-rich
regional and metro rings, and “last mile” connections to customers’ homes and businesses. The national backbone delivers
nationally centralized content and services to regional origination points or “headends.” The regional and metro rings
provide connectivity among the headends within a specific geographic area. TWC transmits signals via fiber optic cable
from these headends to a group of distribution “nodes” and uses coaxial cable to deliver the signals from the individual
nodes to the homes and businesses they serve (an architecture known as “hybrid fiber coaxial cable” or “HFC”). TWC
also continues to increase the number of businesses directly connected by fiber to its network.
During 2014, TWC invested in its network and products to improve reliability and customer satisfaction. TWC
increased internet speeds to up to 300 Mbps in New York, New York, Los Angeles, California and Austin, Texas during
2014. It also ceased delivering analog signals (going “all digital”) in New York City and Los Angeles during 2014 and is
in the process of going “all digital” in Austin. The conversion to “all digital” allows TWC to reclaim spectrum currently
dedicated to the delivery of analog video signals, thereby freeing additional capacity for faster high-speed data service as
well as other services. During 2014, TWC also continued to deploy new and improved set-top boxes, digital-to-analog
converters and advanced modems in customers’ homes throughout its operating areas and to increase the availability of
WiFi to its high-speed data subscribers.
TWC also introduced rigorous new performance standards for its operating plant in order to improve the reliability
and performance of its services. As part of the initiative, the Company monitors and assesses plant health under a
proprietary scoring system, allowing it to promptly identify and remediate sub-par performance.
Sources of Supply
TWC contracts with third parties for goods and services related to the delivery of its video, high-speed data and voice
services.
Video programming. TWC carries local broadcast stations generally pursuant to the compulsory copyright
provisions of the Copyright Act of 1976, as amended, as well as under either the Federal Communications Commission
(the “FCC”) “must carry” rules or a written retransmission consent agreement with the relevant station owner. TWC has
multi-year retransmission consent agreements in place with most of the television stations that it carries that have elected
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