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CoBridge to buy 36 systems from Charter

Mon, 10/04/2010 - 8:35am
Mike Robuck

CoBridge Communications CEO Scott Widham said this morning that his company would close on its deal to purchase 36 systems from Charter Communications in about two weeks.

The 36 systems are located in seven states, but Widham said he wasn't able to provide the number of subscribers in the systems or the price CoBridge is paying until the purchase is finalized.

Scott WidhamWhile the deal is under a nondisclosure agreement with Charter, CoBridge has been in discussions with government officials in the cities it plans to serve. CoBridge Communications currently serves 65,000 subscribers in Arkansas, Alabama, Texas, Missouri, Georgia, Louisiana and Ohio.

In August, Charter confirmed it had 10,000 to 11,000 subscribers in the suburbs around Benton, Ark., in a system that is being sold to CoBridge. Other systems that are included in the deal include the suburbs of Little Rock, Ark., and Corpus Christi, Texas, as well as the Alabama cities of Ozark and Troy. With the exception of butting heads with Troy Cablevision in Troy, Widham said CoBridge's strategy wasn't to be an over-builder.

"We're very close," Widham said of the deal with Charter. "The smaller systems are our focus and what we'll be really good at. It looks like there's a lot of inventory coming on the market right now. We've heard of a lot of deals that are either on the market or about to come on the market, so this is a good time for us to get in and do this roll up."

CoBridge's stated goal "is to purchase under-managed and under-marketed cable television communities that can be improved over time." With the 36 Charter systems, Widham said CoBridge will upgrade the triple-play service offerings to customers, as well as add business-class VoIP and Ethernet-based services.

CoBridge will convert the remaining one-way systems to two-way systems and increase bandwidth through the use of digital terminal adapters for analog-to-digital conversions.

"Our strategy is to use existing housings for amplifiers and just do drop-in modules to increase bandwidth, or look at other strategies like MPEG-4 delivery codecs," Widham said. "We don't want to go in and completely rebuild systems unless they're absolutely at the end of their lives and that's the last resort."

On the DTA front, Widham mentioned that he liked Evolution Digital's offering, which would also seem to dovetail with his interest in using TiVo's platform for a whole-home DVR service. RCN and Suddenlink are both using the TiVo Premiere platform for their multi-room DVR services, while Evolution and TiVo have a partnership in place.

"We really like Evolution's platform because they have a low-cost DTA solution," Widham said. "There are also the usual suspects out there, including Motorola, Cisco, Pace, Drake and Huawei, but we like Evolution from the price standpoint and quality standpoint.

"We really like the wholesale product that TiVo has for the cable industry. The price point has come way down on those DVRs – depending on how much hardware space you want – and they offer a whole-home solution with less-expensive boxes that you can hang off of the main DVR."

CoBridge will use American Support, which was formerly known as Element Customer Core until a name change in July, to provision some of its services to the various systems.

"American Support is kind of an aggregator for smaller systems, and they use CSG Systems' platform," Widham said. "They'll do the call center and provisioning for us for video, and we'll use another provider to provision our high-speed data."

Some Charter techs part of deal
In order to implement and design its planned upgrades and new service offerings, Widham said CoBridge will be using a combination of former Charter employees, its own staff and third-party vendors.

"We are inheriting a number of technicians, chief techs, warehouse people and line techs from Charter, so they'll come over with the deal and we'll augment that with our own staff," Widham said. "We will outsource some of the design work and construction work to third parties, so it's really a combination of all three."

While CoBridge is a relatively new name in the cable industry, Widham is no stranger. He was formerly co-CEO of Broadwing Communications, which was acquired by Level 3 in 2007. Prior to joining Broadwing, Widham was the founder and CEO of Capital Cable, an MSO that owned cable systems across the U.S. and in Latin America before it was acquired by Charter.

The deal with Charter looks like a jumping off point for more deals down the road for CoBridge.

"The question now is how big do we want to be?" Widham asked. "We're backed by The Gores Group, and they really like this space. They're looking to build a good-size company over time. We're expecting to do multiple deals over the next 18 months and grow to a pretty good size."

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