Independent cable operator Dan Ryan wanted to buy HITS from Comcast, and says he had the support of many other operators who use the service. But he could never get Comcast to negotiate and, after a year of trying, he says he’s been forced to pull his offer from the table. Ryan, CEO of Precis Communications, sent a letter to members of the National Cable Television Cooperative and the American Cable Association in February asking for support in his effort to buy HITS from Comcast, which inherited the service from AT&T Broadband in 2001. Comcast, Ryan says, was livid over the move. Gary Traver, SVP/GM of the Comcast Media Center, declined to discuss the issue saying, "We are strongly supportive of HITS, and we continue to support the platform and our customers-the cable operators. We continually talk to our customers, and we have been working with them to make sure the service is meeting their needs. We don’t want to comment on speculation or rumors about a sale." HITS-Headend in the Sky-delivers compressed satellite signals from various programmers to more than 2,000 head-ends, enabling some 300 operators to deliver more channels. A significant number of smaller Comcast systems also use the product, Traver says, but declined to say how many Comcast markets use HITS. Ryan, a longtime cable veteran whose company has 22,000 customers, wanted to form a private co-op with small cable operators who are already affiliated with HITS. He cobbled together much of the financing to pull off the purchase. But he could never get Comcast to deal. Ryan wanted to negotiate a HITS deal in light of Comcast’s intention to buy Disney, which would make the company even more enormous than it already is. In the end, he says, he had to step away. "We are obviously disappointed," he adds. "But they are ardent about keeping this facility, and won’t negotiate." In his Feb. 13 letter to independent operators, Ryan wrote: "TCI, then AT&T and now Comcast have benefited hugely from the HITS platform, which has been largely subsidized by other operators. Many changes have taken place to the HITS platform over the years and typically we, their customers, have found out about them after the fact, with absolutely no communication from them, oftentimes resulting in a mad, last-minute scramble that is both frustrating and expensive." Ryan says he went after HITS when Comcast announced last year it might move all the premium channels off the service, which would have been financially devastating to small operators. Traver says Comcast reconsidered the move after hearing comments from its affiliates. Even though he won’t be getting his hands on HITS, Ryan is still urging small cable operators to not align themselves with upstart SEC Americom, which is promoting a similar product to HITS. Ryan says the company is a fox in a henhouse. "SES Americom is promising to be a great alternative to HITS, and I know that the promises they’re making sound very appealing," Ryan says. "Understandably, given the past actions by HITS’ various owners, this new suitor’s entrance is opportunistically well timed." SES already has a strong direct-to-home presence in Europe, and has stated it wants to bring that business model to the U.S. "SES Americom has tried to woo away cable operators, but it would be bad for the industry," Ryan says. "HITS costs would go up, and SES costs would be more expensive, too. That’s not the way to solve the problem." The only choice small operators have, he believes, is to own the platform themselves. "We need to have operator control of our supply chain as it pertains to digital compression and access control," he wrote in his letter. "We should make the platform decisions, and we should have a very loud say in how our investment dollars are ultimately spent." Unfortunately, Ryan says, that won’t be happening any time soon.

The Daily


Charter-Altice Ponderings

Bernstein Research figures there are two possible reasons for the leak to Bloomberg that Charter’s kicking the tires on Altice USA.

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