康卡斯特 (CMCSA) 2006 Q1 法說會逐字稿

Good morning ladies and gentlemen and welcome to Comcast first-quarter 2006 earnings conference call.

At this time all participants are in a listen-only mode.

Please note that this conference call is being recorded.

I will now turn the call over to Executive Vice President and Co-CFO Mr. John Alchin.

Please go ahead, sir.

Thank you operator and welcome everybody to our first-quarter conference call.

First of all let me refer everybody to slide number two which contains our Safe Harbor disclaimer and remind you that this conference may include forward-looking statements subject to certain risks and uncertainties.

In addition, in this call we will refer to certain non-GAAP financial measures.

Please refer to our press release and Investor Relations website for reconciliation of non-GAAP financial measures.

For comparative purposes we will refer to as adjusted operating cash flow numbers throughout this presentation that reflect the impact of 123(R) on the 2005 numbers.

Please prefer to our press release and especially to Table 7A for details of those adjustments.

We are off to a great start, driven by outstanding results across all aspects of our cable business.

But I will review the consolidated and content numbers ahead of the record-setting cable numbers first.

Consolidated revenue increased 10% to $5.9 billion and operating cash flow grew 11% to $2.2 billion.

Consolidated operating income increased 21% to $1 billion, and cable revenue increased 9.4% to $5.6 billion with cable operating cash flow increasing 12.4% to $2.2 billion.

I will review the drivers of cable results in the following slides.

So let me look at content for just a couple of moments.

First-quarter revenue increased 12.3%.

As we outlined in fourth quarter of last year we're continuing to invest in programming and production in our networks and as a result first-quarter content operating cash flow declined 34%.

This decline was primarily related to OLN's coverage of the NHL which began in the fourth quarter last year, along with other programming initiatives.

Over the past year we've made important investments to enhance our content businesses, including the addition of American Idol host Ryan Seacrest to E, the launch of our 24-hour kid's channel, Sprout, the partnership between OLN and the NHL and our long-term agreement making Golf Channel the cable home for the PGA Tour.

We believe these investments are critical to our objective of making our emerging portfolio of content assets must-have programming for distributors, advertisers and consumers, as well as, complementing the exciting products we are bringing to our customers on the cable side of the Company.

Corporate and other revenue increased 61% to $74 million as NHL play resumed favorably impacting our Comcast [spectacle] results.

Consolidated net income for the quarter was $466 million or $0.22 a share compared to net income of $0.06 a share in the same period last year.

EPS of $0.22 a share reflects strong operating performance by the cable division, investment gains as well as a lower income tax rate, you should expect a full year tax rate in the 40 to 50% -- 45% to 45% range as opposed to the -- sorry -- as opposed to the percentage increase given in this quarter.

On the next slide you will see that our double-digit -- almost double-digit 9.4% cable revenue growth was driven by an all-time record breaking 965,000 RGU increase for the quarter.

Total video revenue increased 6.3% to $3.6 billion.

The year-over-year increase was driven by the strength in digital with 340,000 digital net adds in the first quarter, up from 200,000 last year and to a lesser degree, by growth in basic subscribers.

We continue to see increased customer demand for new advanced digital features with approximately 28% of our customers subscribing to DVR and/or HD services compared to 17% a year ago.

In fact, we added 385,000 subscribers with these advanced services.

With all those customers paying us on average between $65 and $70 a month.

Included in the 340,000 net digital adds are 84,000 enhanced cable customers in this quarter.

This lower tier of digital customers generates on average about $4.00 of incremental revenue per month, from modest subscription fees and from buys on our VOD product.

Driven by movie and event purchases through ON DEMAND, pay-per-view revenues increased 29% year-over-year.

Pay-per-view revenue has shown strong growth, increasing more than 20% on average over the last two years with the rollout of ON DEMAND.

Steve will review the continuing success of our video product in more detail in his comments.

It is the combined strength of basic, digital, data and CDV, Comcast Digital Voice net adds that make up the record breaking RGU numbers.

And this is the most effective gauge of our solid competitive advantage.

Moving on to slide number four, or continuing on slide number four, our high-speed data business continues to demonstrate strong growth.

High-speed data delivered $1.1 billion of revenue in the first quarter, a 22% increase.

We ended the quarter with 9 million high-speed data customers, high-speed data penetration is now 22% and we continue to believe there is significant growth potential in this product as our selling rate continues to be strong at 43%.

A great quarter for CDV and Steve will discuss the ramp up of Comcast Digital Voice in his comments.

Phone revenue increased 9% from the prior year to $191 million.

This was the first quarter of year-over-year revenue growth in the phone business since first quarter of 2003 as CDV net adds outweigh circuit switch subscriber and revenue declines.

You should expect that phone revenue growth will accelerate as unit growth in CDV continues to ramp throughout 2006.

Advertising revenue increased 4.3% in this quarter, reflecting 4.5% growth in local advertising and relatively flat revenue in regional and national advertising.

Overall the spot market was soft.

The 14% increase in other revenue reflects a 19% increase in installation revenues and a 31% increase in regional spot due to the ramp up of revenues from Chicago's Sports Net which we launched in October of 2004.

On the next slide headed up RGU net additions, we highlight the record increases in each one of the products that I've just described.

But it also serves as a reminder that our business is seasonal with concentrations of subscribers in Florida, the southeast coast and college towns.

Second quarter RGU net adds are typically the lowest in the year as you can see in this chart, coming in at approximately 80% of first-quarter net adds.

So then for the second quarter or as we get into the second half of the year you will see those seasonality trends reverse as we increase and accelerate throughout the second half of the year.

On the next slide you will see that we have more good news on the expense front.

Even as we delivered record levels of RGU net additions and as the rollout of CDV is accelerating we continue to tap into the benefits of scale and are effectively managing overall expense growth.

As a result of strong top line growth, continuing cost controls and operating efficiencies, our operating margins were up only 100 basis points to 39.6%.

On our CapEx slide, you can see the CapEx in the first quarter was relatively unchanged at $864 million.

For the quarter 74% of cable capital expenditures were variable and directly associated with new product deployment and consumer demand for these advanced services.

Variable mix has increased significantly from two years ago when 51% of cable capital expenditures were variable.

When we look at CapEx spending and the return on variable capital associated with RGU's, the result is incremental returns of more than 30%.

To the extent that we accelerate and sell more new products than anticipated in our guidance, CapEx would increase to support that growth again with incremental returns of 30% or more.

In the first quarter we generated $775 million of consolidated free cash flow as shown on the next slide.

This is a 136% or $447 million increase over last year.

The growth in free cash flow is driven by a 12.4% growth in cable operating cash flow, stable capital expenditures and a decrease in working capital of $236 million due to change in timing of interest payments, reduction and cash paid for intangibles.

And finally as expected, a reduction in ATT broadband related payments.

The conversion rate of operating cash flow into free cash flow increased to 35% in the first quarter up from 16% last year.

Consistent with the last two years in the first quarter we used a significant portion of our free cash flow to buy back stock, buying back more than 27 million shares or $723 million in share buyback.

The remaining availability under our stock repurchase program is $4.6 billion.

Since the end of 2003 we have bought back more than 200 million shares, effectively reducing shares outstanding by 8.6%.

This represents a $5.7 billion reinvestment in our Company.

So now I will pass to Steve for operational review of these results.

Thank you, John.

I think we had an excellent first quarter, and as importantly a very strong start to the year of 2006.

Which I think is going to be a year which really sort of defines the acceleration of our growth.

If you put 2006 in context, between 2003 after we closed the AT&T transaction and 2005 we really put the building blocks in place for the growth that you're going to see in 2006 and beyond.

And those building blocks were completing the integration, rebuilding all the AT&T systems, getting the margins up, getting the management team in place.

And then moving into 2004 and 2005, putting in place simulcast in the majority of the country which allows us to rollout low-cost set-top boxes and really drive digital in a capital efficient way.

Putting in place VOD to 95% of the country with 7500 shows, which again drives digital and reduces churn; getting HSD speed upgrades in places and putting regional networks in place and getting CDV ready for right now 20 million homes, growing to over 30 million homes by the end of the gear.

So with this foundation in place I think you will see our business start to really pick up across all our productlines, and that's what you are seeing beginning this quarter.

So met me give you some highlights for basic subs, digital, high-speed data and CDV.

Starting with basic subs, we grew 46,000 subs versus a loss of 28,000 subs last year, a swing of about 75,000 subs quarter-over-quarter.

This is actually part of a trend that we noticed in the fourth quarter of 2005 that was someone masked by losses due to the hurricanes.

We think this improved subscriber performance adjusted for seasonality should continue.

The key drivers of this trend are an improved video product due to increased digital and VOD usage and a reduction of our most vulnerable customer segment, analog only subscribers.

Out of 21.5 million total customers, our analog only count is down to under 8 million compared to about 10 million a year ago.

This group will continue to shrink as we rollout more digital high-speed data and phone units.

Our research shows digital customers have half the discretionary churn of analog customers.

When someone uses VOD churn gets cut in half again.

So as our digital base increases and more people use VOD, our basic sub trends should improve.

Comcast ON DEMAND is now available to 95% of our digital customers.

About 6 million homes used ON DEMAND in the last three months, up from 4 million homes a year ago.

Total usage continues to grow, and we hit 141 million views in March.

Each of these use is about half an hour long, so that's a lot of usage.

We now have over 7500 shows including 253 movies, hit shows from CBS and soon NBC, and other content that just keeps getting better and better every month.

There is no question our customers, when our customers have and use ON DEMAND they have a better TV experience than satellite.

And we will keep making the experience better and deliver to more and more people in the future.

High-speed data also helps basic subscriber growth and the fact that we now have 9 million subscribers of high-speed data versus 7.4 million a year ago helps our competitive positioning.

Right now it is too early to see the effect of CDV on basic subs but we expect it will start to kick in in a meaningful way later this year.

Moving onto digital we had a record first quarter with 340,000 net adds versus 199,000 net adds last year.

We now have over 10 million digital subscribers or 47% penetration.

During the quarter we added 384,000 advanced boxes, 84,000 low-cost enhanced basic subscribers and migrated about 128,000 traditional digital subscribers to advance boxes.

In other words, high def or DVR capable.

You should expect to see digital adds accelerate in the future as we look to take advantage of the VOD and digital benefits described earlier.

In terms of high-speed data we added 436,000 subs in the first quarter of '06, our best first quarter on record.

Average revenue per subscriber was also strong at $43.14 versus $42.81 last year for the quarter.

We noticed two interesting trends in our high-speed data business.

First, our analysis shows an increasing percentage of our new data customers are coming from DSL.

In the first quarter 34% of our net adds came from DSL compared to about 23% a year earlier.

Interestingly we now get as many customers from DSL as we do from AOL narrow band.

We think our message on speed superiority continues to ring true.

As the RBOC's cut prices we keep focused on speed superiority and reliability.

As consumers engage in richer Internet experience such as music, games and video, they should place even more value on speed.

The second trend is the positive impact CDV has had on high-speed data growth.

In phone markets our high-speed data net adds are clearly doing better than they are in the rest of the country.

This stands to reason because the triple play at $99 for the first year is very competitive with what the regional Bell companies are offering, but it is good to see the effect so clearly in our numbers.

As we get more aggressive with CDV in more markets and our net adds grow, the benefit to our high-speed data business should only increase in the future.

Moving onto television, telephone, last but not least, we added 211,000 CDV customers in the first quarter, up 54% sequentially versus 134,000 in the fourth quarter of '05.

We launched 3.9 million new homes and as of the present time we have about 20 million CDV marketable homes.

We expect to add about 5 million new homes in the second quarter and end the year with over 30 million marketable homes.

We added an average of 15,385 subs per week during the quarter, and we're now having weeks around 20,000.

So we're pleased with how the business continues to ramp.

We have now launched more aggressive triple play marketing in places like Boston, Philadelphia, Indianapolis and Pittsburgh and this is working well.

Triple play marketing is launching in the majority of the company in the next three to six months.

In the markets where we have triple play marketing we are seeing ARPU's of $120 to $130 for the $99 triple play as people elect to take HBO or digital on top of their $99 bundle.

About 75% of our CDV customers in these markets take all three products.

So in closing across all of our product lines you can see units and ARPU results at record levels.

As a subscription business, these trends are likely to continue and in some cases accelerate as we move throughout the rest of 2006.

It is shaping up to be a very strong year.

Thank you, Steve.

This is Brian Roberts.

Let me just conclude before questions with a couple comments.

Let me be corny and say this was a Comcastic quarter in the sense we've been trying to pull together all the strings of the Company into one message to consumers.

I think our advertising is doing a fabulous job establishing a confidence that our products are the best, and we are seeing a wonderful response.

I can't imagine a stronger start to this year.

Steve just reviewed in detail the cable results.

But if put in context we now have had 23 consecutive quarters of double-digit cash flow operating growth.

This is setting us up well in all of our judgments to have continued double-digit performance even as we invest, as John described, in future growers like our content businesses where we have taken one step backwards to take many steps forward in the years ahead.

The big headline of course I think is the outstanding quarter for new products. 965,000 new RGU's is more new subscribers than any other quarter in our history.

So it sets us up well for growth from those recurring revenues for every period in the future, and we hope to continue to sell new products.

We are excited about each of the categories, even the enhanced basic which didn't get touched on in great detail is a wonderful product, and we have millions and millions of customers who are getting analog cable are about to enjoy the benefits of digital as Steve said, for a nominal cost.

As a corporation we are using the free cash flow in a very measured way to continue to reinvest most, if not all of it in our stock and return of capital to shareholders and John gave you the details there.

We anticipate closing some large transactions this year that will have usage for free cash flow.

But in the last half a dozen quarters all of the free cash flow has gone into buying back the stock.

We are bullish on the core business and the growth businesses, and we hope to have an outstanding 2006.

So it is a great start.

I would like to just congratulate a lot of people that are on this call from the Company and in the field.

Certainly a lot of challenges and I think this Company has responded fantastically.

John.

Thank you, Brian.

Operator, can we please open up for Q&A?

(OPERATOR INSTRUCTIONS) Douglas Shapiro, Banc of America Securities.

I guess just one thing.

John I was wondering if you could address the full-year guidance in cable EBITDA growth just in light of the very strong growth this quarter.

It didn't sound like there was anything onetime in terms of the expenses this quarter, and you have in the past obviously implied that you think things should only get better over the course of the year.

So I was just wondering if you could address that disconnect.

Certainly, Doug, and we really don't see it as a disconnect.

We are very excited about the strength of these results in the first quarter and all of our products are growing.

We expect to see acceleration of CDV as we go on throughout the year.

But going forward, we're focusing on building the business for the long-term, and we don't plan to make adjustments to annual guidance on a quarterly basis unless there is really material changes in our expectation.

So we are not -- we're going to sit with the guidance; reaffirm it, feel very confident about it but not make quarterly tweaks.

Craig Moffett, Sanford Bernstein.

Good morning.

Two questions.

First, can you provide any more insight into the kind of ramp up that you've seen in the markets where you are fully marketing the triple play like Boston in terms of -- take rates and basic subscribers and high-speed data?

And then suddenly can you just brief us on where you are with respect to focusing on commercial services as the kind of next leg of voice and data?

Let me start with commercial.

I think obviously you have to have phone and data in place and operating well before you can be very aggressive on the commercial side of the business.

We are going to start the process of assembling a broad senior management team in the second half of this year for commercial.

And I think you're going to start to see our numbers really ramp in 2007 and 2008.

The way we look at the world we want to have a stream of new products so that as any driver starts to approach maturity you have a new product coming, and commercial and ad sales I think would be the two interactive ad sales would be the two opportunities that we see kicking in 2007 and beyond.

In terms of the effect of the triple play on high-speed data and basic subs, in New England where we launched the triple play pretty aggressively around January there is a very clear correlation between an uptick in high-speed data and CDV.

The correlation right now is less clear, less demonstrable in terms of basic subs.

But we have studied other MSOs who are further along than we are, and we are very confident there is going to be a correlation.

But the high-speed data correlation is clear and I think you can see it in our numbers right now.

There is no question that high-speed data index is higher to last year when you are aggressively launching the triple play.

One other point, I just was in New England you get a sense that as you can tell from other MSOs' results, this is just the beginning of the telephone era.

It is not like a quick spike in stock.

It continues to grow.

We certainly seen that with other MSOs, and our management team that has been in New England is saying we are still grappling with the how to fulfill so many orders, as compared to we're not sure where the next sale is coming from.

This is going to be a sustained growth even in markets that are (indiscernible) for a little while for us.

Jessica Reif Cohen, Merrill Lynch.

Thank you.

The question is regarding voice capability.

I think Steve said you are up to 20,000 a week now.

So are all of these installed by the Company?

Are there any self installs, and is there any hold back in your capability to install?

Like obviously as your footprint grows your ads will grow but within the same markets how do you expect to ramp up?

Jessica, right now we do the majority of our phone installs in-house, not 100%, but probably 60 or 70% in-house.

We are hiring and training people as fast as we can.

We've looked at self install and have had a lot of planning and discussion around self install, and I think we will move to self install, least in some cases particularly people who live in apartments and places where a cordless phone makes sense.

But right now we're doing no self install.

This obviously -- behind your question is what are the constraints of growth.

This is obviously a very high-class problem to have.

And really what you're seeing is our gating the rollout to make sure that we have enough people trained.

We could always go and outsource 100% of it or give people cordless phones, but we want to make sure that when we do the install, we do the whole home wiring, that we do the install correctly to mare sure that the customer is happy and the churn is reduced.

And I think you're going to see as we continue to ramp this business a lot of it has to do with just training and getting people out who can do a quality job.

Aryeh Bourkoff, UBS.

A few quick questions.

On the basic business obviously you're starting to show signs of improvement.

Steve mentioned some lower churn factors as well as the bundle but obviously penetration is still hovering around 50% of homes.

Do you think that that can grow as you do have voice rollout and the penetration and the churn rate coming down?

Do you think part of that performance on basic was driven by satellite pulling back from aggressive marketing, or is it really organic?

The second question I have is obviously pricing on data continues to show strength.

That strategy has held longer than we would have expected.

How long do you think that can continue?

You're saying you're taking share back from DSL but DSL is obviously priced lower, so is it just a pie growth?

But how do you really take share with the pricing so much different?

And then lastly a question for Brian is on content, do you have what you need right now in terms of buying sports packages on the content strategy or do you think that there will be further developments there?

We will have to keep our response very brief given that you've asked three questions.

I'll take a shot at all three real fast.

Steve can fill in on the first -- on any part of it.

We are not obsessed with basic percentage as the concept the way we are managing the Company.

So I am not going to give you a prediction as to what might happen in the future.

I think that we said and I think we signaled a while ago that there are a segment of customers that we want to sell multiple products to and that is where the focus of the Company was headed and to put them in a bundle and give them a great value.

And I think that strategy is working big time.

The more great products you have, the more you're going to get success.

We think VOD -- it is very hard to measure exactly why everybody behaves the way they behave -- it is a combination of VOD is surging in usage.

We are now seeing much more content come to VOD and ON DEMAND, and we think that's helping.

The enhanced basic is going to help quite a bit.

Satellite I think focusing on the competitive balance is part of the factor as to the trade-offs in terms of your cost side of your business versus what you charge consumers.

And the same thing is true in data.

We have again, and I don't want to harp on it, but I think establishing that we have a superior product -- Steve made the statement no question customers used to ON DEMAND feel they have a superior experience.

We feel the same thing is true with Comcast high-speed Internet and as it is bundled together we hope you feel you get the best value if you take our phone offering.

In the content area, I think we made it pretty clear that the NFL was a sort of a unique situation.

That has obviously moved on, and we are very satisfied.

We are a content, strategy [isn't] sports.

We continue to look at regional opportunities.

The NHL, albeit had the affect John talked about but at the same time we just announced several major distribution agreements for OLN that I think are the direct result of the strong content from hockey.

So hopefully you're not going to see any major changes, but we continue to look at the whole market.

But we're very satisfied with where we're at.

Doug Mitchelson, Deutsche Bank.

Thank you very much; one clarification when Steve you said Digital should accelerate, is that due to greater emphasis on the enhanced basic service or just overall Digital?

And then the lower question the CFO of AT&T on their first quarter call was almost dismissive of cable (indiscernible) the efforts indicated that only about one-third of its voice subs are even at risk of churning to cable, that they are working to bundle that at risk group up.

I know your initial guidance was only a 20% phone penetration a few years but the question is, when you do your customer marketing analysis and targeting, do their comments make sense to you?

No, they don't.

I think it depends on the individual market, but there were AT&T markets that got the 20% penetration within 18 months.

There is a very large group of people that want an alternative to the Bells.

And historically they have not had a quality alternative.

And so we don't think getting to 20% penetration is going to be all that difficult.

By the way, there is a group of people that have historically wanted an alternative to cable, and that is one of the reasons why satellite has gotten to the kind of penetration that they have.

So it's not that we do everything perfectly and the Bells do nothing perfectly but I really don't think there's going to be too much trouble on the demand side for telephone any time soon.

And in terms of digital acceleration I would say the lion's share of that is going to be enhanced basic.

I don't think the DVR and high-definition television numbers are going to spike that dramatically.

But with enhanced basic when you have a set-top box that costs under $75 and you can get the kind of consumer experience that we're seeing when people get all this video ON DEMAND, I think it is in our best interest to get as many customers converted over to that platform.

Katherine Styponias, Prudential.

I have a couple questions as well; can you tell us of your enhanced basic customers, how many of them you've seen downgrade from a full digital package?

And then the second question is for Brian.

Brian, in walking around the floor at the NCTA, it looks like there was a lot more switch to video type products.

I'm wondering whether or not your interest in switch video has increased as a way to increase capacity to offer more HD channels.

Thanks.

So in terms of enhanced basic creating downward cannibalization on digital, the way we sell in the call centers is when someone calls in we sell digital plus a pay service or two first.

And typically 60% of our customers take that.

That would be the traditional digital package which is $14.95.

When a person says no I don't want that, I just want cable, i.e. the other 40%, what we're doing now is we're saying okay, if you just want cable you're going to get enhanced basic.

And we manage that -- the digital sell in 60% very, very carefully because obviously it would screw up all the economics if the 60% went to 50% or 40%.

So far we've seen absolutely no downward cannibalization issue whatsoever.

I think it is great that there are multiple technical approaches to bandwidth management, all of which lead to ways that you can be more efficient with what we've already built.

And there is substantial bandwidth reclamation opportunity.

So for those people who are constantly worried are we headed into some sort of rebuild cycle or something like that, something like switch video comes along as well as digital simulcast as well as better compression, it is all good news.

They are all compatible with each other; we will be trialing a bunch.

We've chosen, I think we're very comfortable, to lead with the digital simulcast, our enhanced basic customers then get the ON DEMAND platform.

A lot of what is happening in ON DEMAND is a form of switched video.

Others call it IP TV.

There's a lot of buzzwords going along, they're not all the same.

The key for us to the consumer, I don't think cares how we do it, is to make sure that we have the most offerings in high def, the most ON DEMAND, and a great and reliable experience.

And I think we will be using some of all the techniques, all of which look very promising.

Only one or two more questions operator please.

Jason Bazinet, Citigroup.

Thanks so much.

Two quick questions;

I was wondering if you could just comment on what portion of the digital voice customers are taking the triple play today.

And second, do you have any intent in participate in the upcoming wireless auction?

Thanks so much.

The answer to the first question is 75% take all three.

And then another 23% or 24% take two.

And then about 1% just takes phone.

We have not made any decisions as to any the wireless auction, we participated in those in the past.

They can be opportunistic.

We've made some money.

So we continue to study.

We're very happy with the Sprint partnership, and at the same time we -- although we've talked about how to go the next generation of wireless and we are always looking at ways to do that in concert and independently.

So no news at this moment.

Jeff Wlodarczak, Wachovia.

Good morning.

Can you provide us with some details on the Adelphia transaction?

Sprint wireless, and then I guess, Steve, is it reasonable to assume given the importance of speed that you're going to be doubling your consumer download speeds during 2006?

Thanks.

I think on Adelphia we continue to press forward with optimism that we are going to conclude a transaction by the previously stated date of the end of July.

We have complied with all the requests at the FCC for information.

We've gotten complete Federal Trade Commission Hart-Scott-Rodino approval and many, many vast preponderance of local municipalities.

So there is no news on this call.

We have no information as to the bankruptcy process, but we continue to remain focused on being ready to integrate when that transaction happens.

On Sprint wireless, again, I think it is going well.

We have focused on a number of products that would really be an integration to the consumer, not just a marketing integration but an actual product integration.

We've talked at the cable convention about a number of those, I won't go back into them today but they are trying to make this a seamless experience.

As you both port your communications needs and your entertainment needs from inside the home to outside of the home, from one device to a larger device, etc.

And there is a very constructive process and way to get some products tested in the marketplace this year in a number of cities that we are participating in.

In terms of speed I think you can assume that over time we're going to keep increasing our speed.

The second half of this year we actually have a very interesting technical implementation that is going to allow us to increase speed in a way that we've never done before.

But one of the advantages of the cable platform is that our speed is the same for all of our customers unlike DSL.

And as speeds in general go up and people use the Internet at higher speeds more often, I think that is going to be increasingly an advantage and one that we're going to continue to push.

With that, thank you all.

You have no further questions at this time.

There will be a replay available of today's call starting at 11:30 AM Eastern standard time.

It will run through Friday, April 28th at midnight central time.

The dial-in number is 800-642-1687 and the conference ID number is 7310744.

A recording of the conference call will also be available on the Company's website beginning at 12:30 PM today.

This concludes today's teleconference.

Thank you for participating.

You may all disconnect.