Charter 2005 Annual Report Download - page 20

CHARTER COMMUNICATIONS, INC. 2005 FORM 10-K
demographic and emphasize, for example, sports, movies, continue to prepare additional markets for telephone launches in
family or ethnic programming. In addition to video 2006 and expect to have 6 to 8 million homes passed by the
programming, digital video service enables customers to end of 2006.
receive our advanced services such as VOD and high Commercial Services
definition television. Other digital packages bundle digital We offer integrated network solutions to commercial and
television with our advanced services, such as high-speed institutional customers. These solutions include high-speed
Internet services. Internet and video services. In addition, we offer high-speed
(Video on demand and subscription video on demand. We offer Internet services to small businesses. We will continue to expand
VOD service, which allows customers to access hundreds the marketing of our video and high-speed Internet services to
of movies and other programming at any time with digital the business community and intend to introduce telephone
picture quality. In some systems we also offer subscription services.
VOD (‘‘SVOD’’) for a monthly fee or included in a digital Sale of Advertising
tier premium channel subscription. We receive revenues from the sale of local advertising on
(High definition television. High definition television offers our satellite-delivered networks such as MTV˛, CNN˛ and ESPN˛.
digital customers video programming at a higher resolution In any particular market, we generally insert local advertising on
than the standard analog or digital video image. up to 48 channels. We also provide cross-channel advertising to
some programmers.
(Digital video recorder. DVR service enables customers to From time to time, certain of our vendors, including
digitally record programming and to pause and rewind live programmers and equipment vendors, have purchased advertis-
programming. ing from us. For the years ending December 31, 2005, 2004 and
High-Speed Internet Services 2003, we had advertising revenues from programmers of
We offer high-speed Internet services to our residential and approximately $15 million, $16 million, and $15 million,
commercial customers primarily via cable modems attached to respectively. These revenues resulted from purchases at market
personal computers. We generally offer our high-speed Internet rates pursuant to binding agreements.
service as Charter High-Speed Internet
TM
. We also offer tradi-
tional dial-up Internet access in a very limited number of our PRICING OF OUR PRODUCTS AND SERVICES
markets. Our revenues are derived principally from the monthly fees our
We ended 2005 with 20% penetration of high-speed customers pay for the services we offer. A one-time installation
Internet homes passed, up from the 18% penetration of high- fee, which is sometimes waived or discounted during certain
speed Internet homes passed at year-end 2004. This gave us an promotional periods, is charged to new customers. The prices
annual percentage increase in high-speed Internet customers of we charge vary based on the level of service the customer
17% and an increase in high-speed Internet revenues of 23% in chooses and the geographic market. Most of our pricing is
the year ended December 31, 2005. reviewed and adjusted on an annual basis.
Telephone Services In accordance with the Federal Communications Commis-
We provide voice communications services using voice over sion’s (‘‘FCC’’) rules, the prices we charge for cable-related
Internet protocol, or ‘‘VoIP’’, to transmit digital voice signals equipment, such as set-top terminals and remote control devices,
over our systems. At December 31, 2005, telephone service was and for installation services are based on actual costs plus a
available to approximately 2.9 million homes passed, and we permitted rate of return.
were marketing to approximately 77% of those homes. We will
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