IP: on cable access & content control

[Dave Farber <farber () cis upenn edu>]

> From: Donald Weightman <dweightman () RADIX NET>
> Subject:      More on cable access & content control
> To: CYBERTELECOM-L () LISTSERV AOL COM
>
> Some interesting stuff (all public data) from another list (posted by John
> Schwartz. reposted with permission):
>
> High Speed Access Corp. provides turnkey high speed internet service to
> mid-sized and small cable systems.  Paul Allen's Vulcan Ventures recently
> invested in HSA .  At roughly the same time, HSA contracted with two
> Allen-owned cable companies, Charter and Marcus, to service a number of
> their systems.
>
> In the master Network Services Agreement between Charter, Marcus, and HSA,
> violation of a separate "content agreement" is listed as a cause for
> termination.  Here, from an HSA SEC filing, is a description of the content
> agreement.
>
> "Under our programming content agreement with Vulcan Ventures, Vulcan has
> the right to require us to carry, on an exclusive basis in all cable
> systems we serve, content it designates. Vulcan content may include
> start-up and related web pages, electronic programming guides, other
> multimedia information and telephony services. We will not share in any
> revenues Vulcan may earn through the content or telephony services it
> provides. We must provide all equipment necessary for the delivery of
> Vulcan content, although Vulcan will reimburse us for any costs we incur in
> excess of $3,000 per cable headend. Vulcan cannot charge us for any Vulcan
> content through November 25, 2008; after that date we will be obligated to
> pay Vulcan for this content at the lowest fee charged to any Internet
> service provider who subscribes to Vulcan content. Vulcan has the right to
> prohibit us from providing content or telephony services that compete with
> Vulcan content and can require us to remove our competing content.
> Moreover, many industry analysts believe that Internet access will become
> increasingly reliant upon revenues from content due to competitive
> pressures to provide low cost or even free Internet access. If Vulcan were
> to require us to remove our content or substitute its telephony services
> for any we might provide, we could lose a source of additional revenues and
> might not recover all related costs of providing our content or telephony
> services. Vulcan's ability to prohibit us from providing content and
> telephony services means that Vulcan's interests are not necessarily
> aligned with those of our other stockholders"
>
>
> There are quite a number of HSA SEC filings.  The document from which the
> above quotation is taken can be found online at
>
> http://www.sec.gov/Archives/edgar/data/1075244/0000950123-99-002278.txt
>
> The Network Services Agreement between the Allen cable operators and HSA
> can be found at:
>
> http://www.sec.gov/Archives/edgar/data/1075244/0001035704-99-000273.txt
>
> Don Weightman
>
>
> ------------------------------------
>
> Donald Weightman
> dweightman () radix net
> 202.544.1458