Cox, Comcast say SEC seeking data about methods of measuring subscribers

Friday, July 2, 2004 | 10:53 a.m.

BLOOMBERG NEWS

Comcast Corp. and Cox Communications Inc., the largest and No. 4 U.S. cable-television operators, said the Securities and Exchange Commission has asked the companies for information about how they count subscribers.

Comcast and Cox received letters from the SEC in June, Comcast spokeswoman D'Arcy Rudnay and Cox spokesman Bobby Amirshahi said. They declined to comment further. About 20 telephone, wireless and cable-TV companies have been asked about subscriber data by the SEC, according to a person familiar with the situation.

The companies could be hurt by any disclosure that they had fewer subscribers than previously reported because investors depend on the numbers to measure potential revenue growth, said Aryeh Bourkoff, an analyst at UBS Securities LLC in New York. Investors have more closely scrutinized customer levels after Adelphia Communications Corp.'s founders were accused of inflating its numbers, he said.

"Given that cable operators are valued on a subscriber basis, it could have significant effect," Bourkoff said in a research note to investors. "We do not expect any adjustments" to the number of subscribers at these companies, he said.

Verizon Communications Inc., SBC Communications Inc. and BellSouth Corp. received letters from the SEC seeking customer data as part of the agency's informal inquiry. Verizon, the largest U.S. local-telephone company, said Thursday it overstated its long-distance customer lines by 1.5 million, or 9 percent, because of a database flaw.

Shares of Philadelphia-based Comcast rose 22 cents to $28.03 at 12:14 p.m. in Nasdaq Stock Market composite trading. Shares of Atlanta-based Cox rose 8 cents to $27.99 in New York Stock Exchange composite trading.

The Greenspun family, owner of the Las Vegas Sun, is a minority investor in Cox's Las Vegas system.

"The enforcement division (of the SEC) has made a decision to be more proactive in ferreting things out at companies rather than being reactive," said Russell Ryan, a partner at King & Spalding in Washington and a former SEC enforcement lawyer.

Time Warner Cable spokesman Keith Cocozza said the company hasn't received an inquiry from the SEC. Charter Communications Inc. spokesman David Andersen and Cablevision Systems Corp. spokeswoman Kim Kerns didn't return calls for comment.