Broadband Cable Association of Pennsylvania


January 21, 2013

Service Electric Cablevision Inc. has purchased Shen-Heights TV Associates Inc. in Shenandoah, one of the oldest television cable systems in the country. Details about the purchase and what might change for Shen-Heights subscribers were not available at this time, according to Service Electric division manager Timothy Trently. "We still in the process so we have nothing official to release at this time," said Trently, adding that an official announcement will be made in the near future. Shen-Heights President Martin F. Brophy was not available for comment, but he sent letters to Shenandoah and West Mahanoy Township officials requesting the transfer and assignment of the company's franchise agreements with the municipalities to Service Electric.

According to the Shen-Heights website, the company is family-owned and operated since Sept. 24, 1951, when Shenandoah Borough Council granted Frank Brophy and Albert Kersewicz permission to begin wiring the borough. Shen-Heights TV began operations in October 1951, offering three channels of television (3,6, and 10) from Philadelphia. Upon the passing of Kersewicz, Frank Brophy and George F. Uritis incorporated Shen-Heights TV in 1953. Channel offerings were expanded to include UHF stations from Scranton-Wilkes-Barre and Philadelphia. In the 1960s, a complete rebuild of Shen-Heights TV took place along with expansion into West Mahanoy Township. Since those years, the channel capacity increased to 65 entertainment channels, 65 digital channels, high-speed Internet service and digital telephone.

Service Electric, founded in Mahanoy City, is considered the first cable television company in the United States. According to its website, the company incorporated in early 1991 and is one of several successor corporations to a community antenna television (now called cable television) business started by John and Margaret Walson in the spring of 1948. Service Electric Co. (its original name) was formed by the Walsons in the mid-1940s to sell, install and repair General Electric appliances in the Mahanoy City area. In 1947, they began selling television sets. However, it was nearly impossible to receive the three Philadelphia network stations in Mahanoy City because the town is surrounded by mountains. Due to the geographical interference, Mr. Walson decided to erect a utility pole on top of a nearby mountain and placed an antenna on top of the pole. In an attempt to increase TV sales, he connected the tower site to the appliance store by using wire/cable and modified signal boosters. In June 1948, he successfully connected a nearby tower site to the appliance store as well as to several homes along the cable path. His experiences as a PP&L field employee and his technical degree in electronics proved beneficial in starting the nation's first cable television system.

People who lived in the small mountainous towns of Northeastern Pennsylvania could now receive three Philadelphia television channels in their homes, while others congregated outside the Walsons' appliance store to view this new communication medium. The late John Walson was recognized by Congress and the National Cable Television Association as the founder of the cable TV industry. Walson can also claim many other firsts, including being the first cable operator to use microwave to import distant television stations, the first to use coaxial cable for improved picture quality, and the first to distribute pay television programming (HBO).

Today, Service Electric Television is a private, family-owned cable business servicing more than 250,000 subscribers located in approximately 250 communities in central and Northeastern Pennsylvania and northwestern New Jersey. On an industry-wide basis, Service Electric Television ranks as the 16th-largest multiple system operator. Service Electric Cablevision, an affiliate company of Service Electric Television, serves more than 100,000 subscribers and 100 Pennsylvania communities in three operating regions. Hazleton Standard-Speaker

Netflix shares are up after the company got one upgrade that is countering the effects of a firm that initiated coverage with a "sell" rating, sending the stock back over the $100 level. "Expectations for (subscriber) growth have come down," Janney Montgomery analyst Tony Wible wrote in upgrading shares to buy, "and sell-side sentiment is generally pessimistic, setting the stage for upside driven by new subs, content cost control (for existing content), and a potential price increase." Wible says the company will benefit from a reduced float (fewer shares in public hands) and improving fundamentals. While subscriber growth has fallen, it's also tempered expectations. Shares recently rose 2.7% to $100.29. The stock hasn't closed above $100 since April.

Meanwhile, he says, the Disney deal's importance "cannot be overstated, as Disney cannot afford to let Netflix fail and could help it raise financing if needed." Also, while Wible doesn't mention it, don't forget Netflix will be getting a significant infusion from the Bluth Company starting this year. There's a lot of money in that banana stand. Netflix shares peaked above $300 in the summer of 2011, before the company announced a universally reviled plan to split its rental service in two, the DVD business and streaming, and charge for both. It backed off the plan, but the shares have never totally recovered. In the meantime, Netflix has evolved from a niche business, DVD rentals-by-mail, and is becoming a modern version of a cable network, offering original programming alongside its mountain of movies and TV shows available.

But Richard Tullo over at Albert Fried think the stocks' in a "reflexive speculative bubble" after its massive crash from 2011, and investors are being set up again. "Who doesn't love a Cinderella story," he wrote, "but we think equity comebacks are rare - the fundamental forces such as technology, rising costs, and increased competition have no emotions and rarely if ever abate." "As Netflix gets Cinderella (the Cartoon)," he wrote, "Netflix may also get to guarantee Disney's expenses for big flops such as John Carter and the Alamo, which cost Disney roughly $330 million to produce." He initiated coverage of Netflix with a sell rating and a $68 price target, saying shares are "significantly overvalued and should be sold." Wall Street Journal