Video services

Weakened WOW Wants Another Waiver

WideOpenWest Holdings LLC (WOW) says its financial condition is so dire that it needs a digital set-top waiver from the Federal Communications Commission (FCC) .

The waiver would let the competitive cable overbuilder continue deploying digital set-tops with integrated security through August 2009.

The FCC originally gave WOW a waiver through July 1, 2008, because the company was able to demonstrate "financial hardships" it would encounter otherwise. Charter Communications Inc. , which is expected to file for a prearranged bankruptcy by April 1, obtained a waiver under similar circumstances. (See Charter Turns to Chapter 11.)

This all traces back to an FCC ban on set-tops with integrated security that went into effect on July 1, 2007. Short of a waiver, MSOs were then required to use set-tops with CableCARD slots and modules or migrate to another FCC-approved separable security system. (See Son of 'Waiver Central' and Countdown to 'Seven-Oh-Seven'.)

WOW's waiver got extended through Jan. 31, 2009, but it wants another seven months to use up its inventory of set-top boxes that don't comply with the ban, arguing there's no secondary market or vendor repurchase program for the boxes.

WOW claims it simply can't afford to "abandon its investment" in those integrated security boxes.

"Rather than dissipating, the financial burdens now faced by WOW have grown dramatically over the past seven months," the company said in its Feb. 25 FCC filing. WOW says its access to debt and equity markets has all but dried up.

It's hard to pinpoint how dire the situation is, because the financial portions of the filing are blacked out like Area 51 evidence.

Privately held WOW said it wants those numbers under wraps to avoid giving competitors any advantages.

According to the latest figures, Denver-based WOW has 443,000 cable subscribers, competing primarily with Comcast Corp. (Nasdaq: CMCSA, CMCSK) in Chicago and Detroit; Time Warner Cable Inc. (NYSE: TWC) in Cleveland and Columbus; and Insight Communications Co. Inc. in Evansville, Ind.

— Jeff Baumgartner, Site Editor, Cable Digital News

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