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July 17, 2008
Cablevision system sold
SUPERIOR, Nebraska (STPNS) -- Monday evening members of the Superior City Council approved the transfer of the Time-Warner Cable's franchise to provide cable television service to the residents of Superior to a start-up company, Windjammer Communications.
Earlier this year Time Warner Cable said it planned to sell a group of small cable systems covering approximately 80,000 basic video subscribers and 120,000 revenue generating units in areas away from its main geographic clusters, to Windjammer Communications. The sale is expected to close in November or December.
Superior's cable system was installed by the local telephone company, Lincoln Telephone and Telegraph, in the 1960s. The phone company maintained a local office and service technicians. However, in the l970s the federal government decided the phone company was monopolizing communications opportunities and required it to sell the cable systems it had installed in southeast Nebraska.
The cable system has since been owned by various companies and service technicians have come from outside the community.
Time-Warner said it expected to post a $45 million loss on the sale. Time Warner Cable has systems located mainly in New York State, the Carolinas, Ohio, southern California and Texas. As of March 31, Time Warner Cable served around 14.7 million customers and was the nation's second largest cable television company.
The systems sold to Windjammer had been on the auction block since spring.
Windjammer apparently was created specifically for the deal and consists of Boston private-equity concern MAST Capital Management and Jupiter, Fla.-based small cable operator Communications Construction Services. According to Time Warner Cable, CCS specializes in providing voice, video and data services to military personnel and supplies service to more than 200 military facilities in the continental U.S. and Hawaii.
The price of the deal was not disclosed.
In a research note, Miller Tabak analyst David Joyce estimated the systems could have fetched between $160 million and $280 million, based on valuations of $2,000 to $3,500 per subscriber. But the valuations could vary widely given the differing conditions of the systems.
According to a national press release, the systems are located on 125 headends in 25 different states. With 80,000 subscribers, that means that each headend has roughly 640 subscribers, indicating the systems are probably rural in nature and probably in need of upgrading.
The company has not commented on its local volume but based upon the franchise payments received by the City of Superior, the number of local customers has been declining in the face of increased competition from satellite service providers.
The cable system maintains its own cable which is hung on utility poles owned by the City of Superior and the local telephone company, Windstream Communications.
In other action Monday night, Cliff Vogler updated the council on plans for the Fourth Street Junction.
Vogler reported he had purchased a fire escape which previously served the Edgar school house and planned with council approval to install it near the southeast corner of the restaurant.
The council was also updated on the restaurant's latest improvement plans.
Plans are to expand to the second floor and have at least four exits from the what was the lodge hall on the second floor. In addition, the owners are planning to install, again subject to city approval, a balcony along the east side of the building. The balcony will provide an outside service and smoking area. This replaces an earlier proposal to provide a service area at the sidewalk level.
The addition of the fire escape and balcony will require the approval of the police chief, utility department manager and the council. No objections surfaced at Monday's meeting and it expected the approvals will be given.
Because of this year's frequent thunderstorms, plans for a grand opening street dance have been cancelled. Instead the grand opening will be delayed until the second floor is ready for use. Work on preparing that level is now underway.
In other action Monday night, the council approved the addition of Jason Poppe to the water department crew. Poppe recently moved to Superior from Deshler.
The authorized size of the light department crew was expanded from three to four people.
The council approved a request from Judy Priess representing the SASA (Sexual and Spousal Abuse) Crisis Center to increase funding for the next fiscal year to $4,000. This is up from the current $3,000.
Though SASA was established many years ago to service clients in Webster, Nuckolls, Thayer and Clay counties, a Superior office was not opened until 2005. In 2007, the office served 62 clients.
Two Superior police officers submitted letters to the council requesting the city's continued support of the program. Nuckolls County will also contribute $4,000 toward the program.
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