Broadband Cable Association of Pennsylvania


November 30, 2012

Cox Communications Inc. is considering acquisitions of business-services companies with annual revenue of about $200 million and could announce a deal in the next six months.

The third-largest U.S. cable company is targeting telecommunications-services and cloud-computing companies as it seeks to increase its potential revenue base by 10 percent in 2013, Phil Meeks, senior vice president of Cox Business, said in an interview. Atlanta-based Cox is also looking at partnerships and acquisitions of smaller companies, he said. U.S. cable companies are counting on faster-growing business services to buoy growth as residential video customers decrease. While closely held Cox doesn't release figures, the company has taken market share from AT&T Inc., Verizon Communications Inc. and CenturyLink Inc., its three largest competitors, providing small businesses with Internet, TV and phone services, Meeks said.

Cox is complementing its voice and high-speed Internet service by offering information-technology support and services. Buying a company that specializes in cloud-computing services would give Cox a broader array of ways to make money from businesses with fewer than 20 employees, Meeks said. With cloud computing, companies pay to store their data and applications in remote locations. Cox's cable rivals are making deals as well. Time Warner Cable Inc., the second-largest U.S. cable company, purchased NaviSite Inc., a company that manages and stores data for businesses, for $274 million in April 2011. Comcast Corp. is the nation's biggest cable provider.

Cox's business-services revenue is expected to grow about 13 percent to $1.4 billion in 2012 and is on pace to reach its $2 billion sales target by 2016, Meeks said. Sixty-five percent of Cox Business's revenue comes from businesses with 19 employees or fewer, he said. Cox's total annual sales are $9 billion a year, he said. Cox sold $1.5 billion of bonds earlier this week in its first debt offering since 2009. Proceeds from the sale may be used to fund a dividend, repay debt or for general corporate purposes, a person familiar with the offering said this week. Bloomberg

The Senate Judiciary Committee on Thursday approved a bill that would strengthen privacy protection for e-mails by requiring law enforcement officials to obtain a warrant from a judge in most cases before gaining access to messages in individual accounts stored electronically. The bill is not expected to make it through Congress this year and will be the subject of negotiations next year with the Republican-led House. But the Senate panel's approval was a first step toward an overhaul of a 1986 law that governs e-mail access that is widely seen as outdated.

Senator Patrick Leahy, the Vermont Democrat who is chairman of the committee, was an architect of the 1986 law and is leading the effort to remake it. He said at the meeting Thursday that e-mails stored by third parties should receive the same protection as papers stored in a filing cabinet in an individual's house. "Like many Americans, I am concerned about the growing and unwelcome intrusions into our private lives in cyberspace," Mr. Leahy said. "I also understand that we must update our digital privacy laws to keep pace with the rapid advances in technology."

Mr. Leahy held a hearing about two years ago on whether and how to update the 1986 law, called the Electronic Communications Privacy Act. But the effort has moved slowly, in part because some law enforcement officials have opposed restricting an investigative tool that has become increasingly used. Under the law, authorities need to obtain a search warrant from a judge - requiring them to meet the high standard of showing that there is probable cause to believe that a subject is engaged in wrongdoing - only when they want to read e-mails that have not yet been opened by their recipient and that are fewer than 180 days old.

But the law gives less protection to messages that a recipient has read and left in his or her account. In some cases, officials may obtain a court order for such material merely by telling a judge facts suggesting that there is reason to believe they are "relevant" to an investigation, and in other cases prosecutors can issue a subpoena demanding the materials without any court involvement. Senator Leahy's bill would generally require prosecutors to obtain a search warrant from a judge, under the stricter probable-cause standard, to compel a provider to turn over e-mails and other private documents.

The Center for Democracy and Technology, a nonprofit that advocates for electronic privacy rights, hailed the committee vote as "historic." In a statement, Gregory T. Nojeim said it "sets the stage for updating the law to reflect the reality of how people use technology in their daily lives. It keeps the government from turning cloud providers into a one-stop convenience store for government investigators and requires government investigators to do for online communications what they already do in the offline world: get a warrant before reading postal letters or searching our homes." Still, the ranking Republican on the committee, Senator Charles Grassley of Iowa, argued that the bill does not strike the proper balance between privacy and public safety. He expressed concerns that changing the standard of proof for obtaining e-mails would inhibit certain investigations, such as child pornography or child abduction cases. Mr. Leahy argued that the bill does not alter criminal and antiterrorism laws related to search warrants, including exceptions in emergencies where time is of the essence. But he also said the bill was a starting point and he was open to further negotiations. The panel approved it by a voice vote. New York Times