Exclusive: Time Warner Dissolves Houston Division of Texas-Kansas City Cable Partners

We just got sent this internal announcement announcing Houston’s Cable Partners annihilation.

It reveals a heretofore untold bizzaro world, where Comcast and TimeWarnerCable are business partners.

While relatively tame in terms of corporate hogwash, this line jumped out at us.

Many of you are probably familiar with Comcast and know employees there. They are a premiere company and enjoy a very high-level reputation among their existing employees and customers.

How do we enter this magical parallel universe? A cracked mirror? A tiny door? Strumming an elaborate chord sequence on our six-string theory guitar?

Full text inside, because we can.


To: Houston Division Employees

Fr: Ron McMillan

Cc: Wayne Knighton, Landel Hobbs

Tomorrow, Wednesday, August 2, Time Warner Inc. will officially announce the dissolution of Texas-Kansas City Cable Partners–the 50-50 joint venture by which the cable systems in our Houston, Kansas City and Southwest Texas divisions are managed by Time Warner Cable, but jointly owned by Comcast and us.

This ownership arrangement was initiated back in 1985, when the Kansas City systems were formed. The Texas Cable Partnership was formed in 1998. Then both of these partnerships were merged together into what has become known as the Texas-Kansas City Partners, which closed in 2004. It provided the opportunity for either Company to trigger the dissolution of the venture any time after June 1, 2006. Earlier this month (July 3), Comcast notified us that they planned to trigger this event. Comcast’s action gave Time Warner Cable the right to choose which of the two pools of systems–either KC and SW Texas or Houston–they would select to own. Comcast, in turn, could decide how the outstanding debt be distributed against the two pools.

Time Warner Cable has decided to keep its Kansas City and Southwest Texas properties.

I’m sure many of you may be puzzled by this outcome, because of the importance Houston represents in terms of the company’s overall cluster in Texas. This decision has nothing to do with performance; indeed your contributions in driving sales of the bundle and improving customer care have made significant improvements to our bottom-line. From Time Warner Cable’s point-of-view, both pools represent very attractive, well-run operations. Several factors came into play, but certain economic considerations were paramount. Under the terms of the partnership, Comcast could assign the debt carried by the partnership among the two pools of systems. They chose to assign the entire debt to the Houston division.

Many of you are probably familiar with Comcast and know employees there. They are a premiere company and enjoy a very high-level reputation among their existing employees and customers.

The dissolution of the partnership will not likely take place before the first quarter of 2007, since regulatory and franchise review and approvals are necessary. For the immediate going forward period, nothing changes.

Operations will continue to follow normal course. There may be situations, which require Comcast management’s concurrence, but I don’t expect that to alter the way we get things done here.

As we get closer to the time when the transfer will take place, I’ll have a good deal more information to share with you. I know there are many unanswered questions now, but it is my intention to get answers to all of you on all of your questions as time proceeds. No one will be left out of the process. We will schedule regular get-togethers to present new information as it becomes available regarding the transition. We will ensure you receive detailed information about how Comcast is organized and how their benefits and other employment programs work.

As part of an even bigger organization, there may be new opportunities available. Our own HR team and representatives from Comcast will address these issues in the months ahead.

We will continue to conduct business as usual providing excellent products and services to our customers and acquiring new customers. Our pace of innovation will not slow down. Our attention to the bottom-line and our customer’s satisfaction will not lessen.

Many of you have been in the cable business for some time and have worked for several “predecessor” companies and know these transitions can be very positive. Both Comcast and Time Warner Cable have an overwhelming interest in making this a smooth transition for our employees as well as our customers.

I am counting on all of you to continue to do the great work you do. Our customers will still be your customers when the transaction is completed, probably early next year.

Of course, our friends in Kansas City and the SW Division are also being told of the outcome of this dissolution process. It will not become effective until the normal regulatory and franchise reviews and approvals are in-hand and that is not expected much before the first quarter of 2007.