In a bid to regain the trust of investors, companies in at least one industry group have banded together to set their own industry-wide reporting standards. The reaction on Wall Street was largely positive, despite the accounting scandals at WorldCom and bankruptcy of industry giant Adelphia earlier this year.
The new standards, which were established with the support of the National Cable and Telecommunications Association, address three types of disclosures:
- Capital expenditures. The guidelines identify six standard reporting categories for capital expenditures, (i.e., customer premise equipment, commercial, scalable infrastructure, line extensions, upgrade/rebuild, and support capital).
- Customer relationships. The guidelines establish a new definition of customer relationships, (i.e, the number of customers that receive at least one level of service, encompassing voice, video, and data services, without regard to which services customers purchase).
- Revenue-generating units. The guidelines create a standard definition for revenue generating units, (i.e., the sum total of all primary analog video, digital video, high-speed data, and telephony customers, not counting additional outlets).
The chief executive officers of eleven companies have agreed to adopt these guidelines by their first quarterly reports for 2003. The companies are: AT&T Broadband, Time Warner Cable, Comcast Corporation, Charter Communications, Cox Communication, Inc., Adelphia Communications Corporation, Cablevision Systems Corporation, Mediacom Communications Corporation, Insight Communications, CableONE, and GCI Cable, Inc.