A century after Dayton, Ohio-based bicycle shop owners Wilbur and Orville Wright put the city on the map as the birthplace of aviation, Time Warner Cable is giving its residents new wings to make history in this century. With technological advances including faster-than-ever high-speed Internet, movies-on-demand, digital video recording and wireless home networking, residents in the nation’s 58th largest DMA now have the cable-delivered technology to fly even when they’re firmly on the ground. Time Warner Cable spent an estimated $200 million to upgrade its Western Ohio division, where Dayton is the largest metro among the 379 communities that make up its 430,000-customer base. With the city’s upgrade from 450 to 750 MHz completed early this year, Western Ohio division president Jerry DeGrazia and his staff have been busy making the most out of their hybrid fiber/coax network. The team continues to focus on three areas: delivering innovative products and services through cutting-edge digital technology; backing it up with exceptional customer care whether on the phone, online or in person at 26 local customer service centers; and demonstrating its commitment to improving customers’ lives through public affairs and community involvement. “The major priority here is very much education,” says Dick Hutchinson, who as VP of government and public affairs handles everything from system franchise renewals to statewide regulatory matters such as helping convince Ohio’s general assembly to vote in June against Governor Bob Taft’s proposed state sales tax on cable TV services. But the most rewarding part of his job, he says, is managing the division’s many education-enhancing initiatives such as its Crystal Apple award, a local offshoot of a Time Warner Cable corporate program that recognizes innovative educators who creatively use cable technology or programming to support their teaching goals. “We try to be strategic and weigh up each program to ask if it addresses any educational aspect or need of the community,” he says. “It also has to be scalable [across the division], which is why we got on board with Court TV’s Choices and Consequences to address student violence, which is an issue wherever you go.” Besides its longstanding partnership with Court TV and being an ardent supporter of Cable in the Classroom — with nearly 700 schools throughout the division receiving complimentary cable drops or service — Hutchinson and his team, including public affairs director Karen Baxter, administer grants and manage other programs including establishing Time Warner Cable ArtZones across Western Ohio to provide youths with free creative workshops and art exhibitions. That commitment comes from the top, where DeGrazia, a former teacher himself, frees up funds and his staff to support the goals and growth of the communities TWC Western Ohio serves. “When we were building this division we purposely went a little bit heavy on public and government affairs,” DeGrazia explains. “We had over 200 miles north to south of geography to cover, including a lot of schools and universities. So education was a natural and great fit for us, and it continues to be a very key and important area for us to concentrate on. The habits that students are forming, the information that they’re taking in and processing…all that informs their value system and helps form future study habits and their potential. So I’m really proud of the way Dick and Karen keep our commitment to education thriving in our communities.” DeGrazia himself works closely with local organizations including the Dayton Development Coalition, the K-12 Gallery for Young People, Miami Valley Reads, Dayton Society of Natural History, the Better Business Bureau and the Dayton Area Chamber of Commerce. That latter organization provides a snapshot of the tough economic environment facing Time Warner Cable and other businesses servicing metro Dayton, which is located in Montgomery, the region’s largest county. The chamber estimates that Dayton’s median household income in 2002 was $25,517, which was less than the Montgomery County median of $36,664 last year. The greatest percentage of Dayton’s households (27%) earned between $20,000 and $34,999 last year, while the bulk of the county’s homes (31.5%) fell in the $50,000 and higher income bracket. The local economy has felt the impact of layoffs at NCR and Wright Patterson Air Force Base, among other major employers, last year. While the chamber projects “there will be some improvements” across the metroplex by the end of this year, it is guardedly optimistic in its outlook for 2003. Those factors may make Dayton residents more fiscally cautious than their suburban counterparts, particularly when it comes to investing in new technologies. Residents might also be more grateful for TWC’s commitment to local volunteerism and partnering with schools and colleges, including the University of Dayton, to bring valuable support such as broadband to libraries and community centers. Between 2000 and 2003, the Dayton region population (now estimated at 1.55 million residents by the chamber) increased by an estimated 21,654 or 1.41%. As of the 2000 Census, metro Dayton was approximately 82% white, 14% African-American, 1% Asian and less than 1% other minority populations. However, the greatest surge in total population was the 11.04% uptick in Warren County, which increased more than 39% between 1990 and 2000. Montgomery County’s ranks decreased by 2.57% in that decade. Unlike greater Dayton, the majority of the Western Ohio division’s customers live in small towns in Ohio and parts of Indiana and Michigan. Stretching from Springboro, just south of Dayton, up to Bowling Green and the shores of Lake Erie, the sprawling system across 34 counties requires the Time Warner Cable team to run the division almost like a state-wide organization. “The last major upgrade for this division was our Dayton metropolitan area, and we completed that in early 2003,” says DeGrazia. “It took approximately two years to complete that, and we’re pretty much done now except for some very small systems in Michigan and Indiana, less than 1,500 customers in total.” The first step was introducing digital video and high-speed Internet service featuring multiple Internet service providers from the company’s own Road Runner and AOL for Broadband services in addition to EarthLink and regional ISPs BigNet and WCOIL Express. Video-on-demand — including movies, subscription premiums on demand and free on-demand content from networks such as Golf Channel, Comedy Central and BBC America — launched in April. “We are very happy with how that’s performing, particularly on the SVOD side of things,” says DeGrazia. “People feel it’s really adding value and we’re hearing a lot of satisfaction from customers.” Having also introduced digital video recording service (a product DeGrazia says is also exceeding his expectations) in April, he is pleased to have the company’s Answers on Demand channel at the ready to field questions and educate customers about these new services. “We are going to expand Answers on Demand in other types of on-demand videos not only for our customers but for associates, so they can view training videos in their homes,” he says. “Digital channel 500 launched in February as our secure channel for associates. I do a monthly call-in show so our folks can call in and ask me questions about anything from major training initiatives to new campaigns.” Home networking was launched late last year with a wired and wireless product, “but we quickly found that the wireless product was not only greatly preferred by our customers, it was easier to install. So we are now only offering a wireless home networking product, and customers are taking it as a value add-on to our high-speed product.” HDTV has also been available in the division since last September. HD deals have been inked with nearly all the local broadcasters — ABC, CBS, NBC, Fox, WB, PBS and independent station WKOI — that transmit hi-def over-the-air feeds in Dayton. “We also offer HBO and Showtime in HD, and we are in the process of adding Discovery’s HD product, which we will have by the fall,” DeGrazia adds. DeGrazia also enjoys the lineup of products at home. A Friday night in June saw him enjoy Barbershop on VOD while nursing a cold at home; pausing the movie, he could check his e-mail on his laptop via his wireless home network while his wife, a teacher, checked her e-mail on the family’s main computer. The technology fan now looks forward to bringing even more advanced digital services to his customers such as digital phone, online game playing and interactive television. “We’re first looking at a voice over IP [telephony] product, and we’re working with our corporate office right now on the timing and implementation of that product,” DeGrazia says. Using the Passport IPG and a mixture of Motorola and Pioneer platforms throughout the division, DeGrazia’s team also helped the company test price points for its faster cable modem service tier (dubbed Road Runner Xtreme) in April. The $89.95/month product — also tested in Lincoln, Neb. ($79.95/month) and Greensboro, N.C. ($99.95/month) — offers downstream speeds up to 3 Mbps and 512 kbps upstream, versus Road Runner’s typical 2 Mbps/384 kbps download/upload speeds, to heavy broadband users who consume more than 15 GB per month. “Once you get the networks upgraded it allows you to rapidly introduce new products. The challenge is to continue to retrain [our trainers] and newly train our associates, so that’s our biggest internal focus right now. We have six full-time trainers, not including our director of training, and we’re finding that as we introduce more and more products, we’re having a hard time keeping our trainers up to date too.” The division’s solution, not surprisingly, is employee education. “We’re doing a lot of retraining [of] our trainers as we go,” says DeGrazia. “Training is definitely the all-out mantra here these days. An employee survey last fall identified their No. 1 desire not to be increased pay, but more training and product knowledge. Some of our partners and vendors are also helping us, in a ‘train the trainer’ fashion, keep everyone here up to speed.” The division’s intranet is key to keeping that training more consistent, providing information to staff such as new products, channel lineups and pricing (which is standardized across the division) for all products and services. Helping keep customers up to speed on the expanding array of services is the division’s two call centers: a 240-associate staffed center in Kettering, the division’s headquarters, and a 45-associate center 90 miles away in Allen County. “In effect, the two call centers function as one,” notes DeGrazia. “We have built an internal network which serves the whole division that links together all our major and minor offices. So all our internal voice and data traffic for the division is on our network, which enables us to take a call in one office and automatically transfer it. The software looks for the CSR who has been idle the longest, and we have full IVR [interactive voice-response] services for all our customers, no matter where they are located within the division.” Subscribers can choose from a range of packages that bundle and discount analog and digital video services with the option to add on high-speed Internet. “Our objective is to get customers into the right package that meets their needs, which has been very successful in keeping our basic customer churn rate low,” says DeGrazia. “It’s been averaging less than 2%, so we’re very pleased. Because they’re satisfied with the package, they tend to not be attracted by offers from DBS or DTH. We also spend a lot of time in our outbound telemarketing group with follow-up quality surveys after a product has been installed to see if a customer has any questions or issues in accessing VOD or what have you.” Now inserting local advertising on 42 channels, the division’s director of ad sales Norm Pytel also works closely with his clients to educate them about local cable’s expanding range of networks, research tools and capabilities such as more precise geo-targeting. “We look at the premium programming available on the networks and package that with other inventory that reaches those same demos, and more and more of our customers are starting to buy us that way,” says Pytel. “Time Warner TV, our local origination channel, is now available across our whole division, and its robust local programming also serves to strengthen our offering.” DeGrazia has worked for TWC and its predecessor companies for 17 years. He started in the industry as a telecom coordinator for the City of Dearborn, Mich., and has taught for six years in middle and high schools. DeGrazia has a degree in economics and secondary education from the University of Michigan and an M.B.A. from the University of Detroit. Hutchinson joined TWC in 1999 and started his cable career in 1980 with Continental Cablevision, where he held positions in operations, advertising sales and corporate affairs. The local GM of the Dayton system in 1985, he earned a degree in marketing and economics from the University of Toledo. Beiswenger’s career with TWC spans more than 21 years. He moved to Ohio in 2001 from the TWC division in Syracuse, N.Y., where he served as VP of marketing, customer service and training. He earned a bachelor’s in business management and a master’s in personnel administration and industrial relations from St. Francis University, Pa. Cannon has been with TWC since 1995. Before moving to Ohio in 2001, she served as VP of marketing and public affairs at the company’s Portland, Maine, division. She began her cable industry career in 1987 with Susquehanna Broadcasting, and has a bachelor’s in English and communications from Marist University, Poughkeepsie, N.Y. Kersnowski joined the Western Ohio division in 2002, moving from TWC’s Portland, Maine, division. He has been with TWC since 1991, and began his cable career in 1972 as chief engineer for Long Island Cablevision. Kersnowski has a degree in data processing from the State University of New York. Pytel’s career in cable ad sales began in 1989 with Continental Cablevision, and he joined TWC in 1999. He earned his degree in marketing and advertising from Bowling Green State University. EMPLOYEES: 970 HOMES PASSED: 705,500 MILES OF PLANT: 9,776 PERCENT UPGRADED: 97% to 750 MHz BASIC SUBSCRIBERS: 430,700 in Western Ohio BASIC PENETRATION: 61% LIMITED BASIC RATE: $9.70 for 23 channels EXPANDED BASIC RATE: $40.95 for 75 channels DIGITAL SUBSCRIBERS: 129,100 in Western Ohio DIGITAL PENETRATION: 30% DIGITAL RATES: $47.90 to $123.95; digital movie and sports tiers are $6.95 each HSD SUBSCRIBERS: 77,200 in Western Ohio HSD PENETRATION: 18% HSD RATE: From $44.95 (depends on ISP) DVR RATE: $4.95 or $9.95 (depends on level of service) VOD RATE: Movies: $3.95 new releases, $9.95 adult, SVOD $6.95 with premium channel subscription HOME NETWORKING RATE: $14.95 for wireless network (up to four computers) HDTV BOXES: $6.95/month AD INSERTIONS: 42 channels SOURCE: TIME WARNER CABLE Comparison of consumers in Time Warner Cable’s Dayton service area to the top 75 market average.

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