Cable Operators

PHILADELPHIA - Comcast Corp., the largest U.S. cable operator, posted a wider first-quarter loss after spending more to upgrade AT&T Broadband systems acquired last year. Revenue rose as the company reversed subscriber declines at the new unit. The net loss increased to $297 million, or 13 cents a share, from $89 million, or 9 cents a share, a year earlier. Sales climbed 9.7 percent to $5.52 billion, Comcast said. Year-earlier sales were reported as if the AT&T purchase had been completed in January 2002 instead of November.

WASHINGTON - A federal appeals court handed a huge victory to the nation's largest television networks and cable operators yesterday, ruling that the government had to reconsider sharp limits on the number of stations a network can own and striking down the regulation that had restricted cable operators from owning television stations. Unless overturned on appeal the ruling would remove significant impediments that have prevented companies such as AOL Time Warner, a big cable operator, from merging with broadcast networks that own television stations.

From her ninth-floor office in Bethesda, Judith A. McHale can gaze across a canopy of trees toward Silver Spring and point to the spot where Discovery Communications Inc.'s new headquarters is taking shape. McHale, president and chief operating officer since 1995, has steered the Discovery Channel's parent company through an expansion that now has it bursting at the seams in Bethesda. During her tenure, McHale has guided the launch of two U.S. cable networks and the acquisition of a third, led the company into the retail business with Discovery Channel stores, and pursued an international campaign that's extended its networks to more than 500 million subscribers in 152 countries.

NEW YORK - Viacom Inc. said yesterday that it will buy BET Holdings Inc. for $2.9 billion in stock and assumed debt, adding the top cable channel aimed at black people to its stable of TV networks, including CBS, and big-city radio stations. Viacom, the world's No. 3 media company, said it will issue about 40 million Class B common shares worth $2.34 billion, based on yesterday's close of $58.50. The final purchase price will be based on the share price 20 days before the tax-free transaction is completed.

If you ask Jim Cologie what the Next Big Thing in the cable television industry will be, he points to a very old piece of technology: the telephone. Cable operators big and small will begin offering local telephone services bundled with TV programming, and they'll do it sooner rather than later, thanks to the miles of fiber-optic cable being laid coast to coast, he says. "Telephony services are really where the action's going to be," predicts Cologie, president of the Pennsylvania Cable and Telecommunications Association.

SOMETIME SOON, Baltimore County residents may get their first glimpse of what deregulation in the cable television industry really means. Two companies -- Starpower and American Broadband -- want to offer service and compete with Comcast, but the competition may not solve the ills affecting current cable service. Ask the county's 210,000 cable consumers about cable service, and they'll likely grumble about escalating bills. What really bothers them, however, are the inexplicable service interruptions, the difficulty reaching service representatives and cable repairs that are not made when promised.

In today's 500-cable channel universe, the keys to success for a fledgling channel are to get brand recognition and to create a buzz that becomes so powerful that cable operators come clamoring. As ESPN Classic's new vice president and general manager, Mark Shapiro has a double shot of brand recognition, with the name of the self-proclaimed world-wide leader in sports and perception that the channel will show all the history-making games. But Shapiro, who took over the channel four weeks ago, is laboring late into each night to beef up talk about Classic as a place to see more than the 1970 Super Bowl or 1965 Masters.

NEW YORK -- General Electric Co.'s NBC television unit is close to an agreement to buy a 32 percent stake in money-losing Paxson Communications Corp. for about $400 million, a source familiar with the companies said yesterday. The purchase likely would be a first step toward NBC buying the entire company, analysts said.Paxson, owner of the largest group of U.S. TV stations, is discussing an option to have NBC boost its stake above 32 percent if federal regulators ease restrictions on ownership of TV stations, the source said.

Comcast Corp. unveiled a plan yesterday that would double its stake in another cable television company, Jones Intercable Inc. Philadelphia-based Comcast, which has emerged as the dominant cable firm in Baltimore and through much of the mid-Atlantic region, is offering $840 million in its stock for 16.5 million Jones shares.If Jones' shareholders accept the offer, Comcast's ownership stake in Jones would rise from 39 percent to 79 percent.Comcast is offering the equivalent of $50.31 a share -- a premium of 12.7 percent over the common shares' Friday close and a 9.1 percent premium for the Class A shares.

WASHINGTON -- The Supreme Court agreed yesterday to clarify Congress' power to require cable TV systems to keep sexually explicit programs out of the easy reach of children.At issue is a 1996 federal law that requires cable operators either to block out all sexually explicit programming for customers who do not want it or to put such programs on the air only during hours that children would probably not be watching.A federal court in Wilmington, Del., struck down that law in December as an unconstitutional violation of cable operators' free speech rights.