Re: Oppenheimer
I like that we can pick and choose which margin business we go after so that we can continue to see increasing margins. However, I do like that CTL will stay in the consumer broadband business, but maybe from a different perspective than most. Yes it will drag on those overall margins i mentioned above. But I think they could honestly put that entire BB category under "marketing" expenses.
I think we are all familiar with "loss leaders" and even though I hope we aren't running it at a loss I think this keeps the CTL(LVLT) brand in front of many more people than if we just focused on the business customers. If we are providing BB to several densely populated cities, how many more CIO's or network admins might be using our BB service, see that they get great service and a great value at home and know what our capabilities are on the business side and we get a shot at whatever business they have in the future. We don't need to make much money here, just as advertising is a sunk cost. Even if it is a "price for life" program and barely covers it's costs it is worth keeping in my opinion.
If you stay in front of your clients, regardless of product, for 5-10-20 years, eventually that's all they know. McDonald's sold billions of hamburgers to us as kids and now they sell us Big Macs and whatever else they can upsell us on at higher margins.(I'm not a Mcdonald's fan but you get my point). So I think it's a decent strategy to grow this side what little they can without spending too much on it, particularly where we are in heavy metro's as Fanfare noted.