Note 4 - Revenues

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Revenue from Contract with Customer [Text Block]

4. REVENUES

The Company’s revenues by product line were as follows (in thousands):

	Year Ended December 31,
	2019		2018		2017
Residential
Data	$	547,240	$	492,816	$	416,355
Video		335,190		343,384		332,536
Voice		43,521		41,278		43,733
Business services		204,500		155,952		131,082
Other		37,546		38,865		36,250
Total revenues	$	1,167,997	$	1,072,295	$	959,956

Fees imposed on the Company by various governmental authorities, including franchise fees, are passed through on a monthly basis to the Company’s customers and are periodically remitted to authorities. These fees were $22.7 million, $16.1 million and $15.7 million for 2019, 2018 and 2017, respectively. As the Company acts as principal, these fees are reported in video and voice revenues on a gross basis with corresponding expenses included within operating expenses in the consolidated statements of operations and comprehensive income.

Other revenues are comprised primarily of advertising, customer late charges and reconnect fees.

Net accounts receivable from contracts with customers totaled $32.3 million and $28.1 million at December 31, 2019 and December 31, 2018, respectively.

A significant portion of the Company’s revenues are derived from customers who may cancel their subscriptions at any time without penalty. As such, the amount of deferred revenue related to unsatisfied performance obligations is not necessarily indicative of the future revenue to be recognized from the Company’s existing customers. Revenues from customers with contractually specified terms and non-cancelable service periods are recognized over the terms of the underlying contracts, which generally range from one to five years.

Contract Costs. The Company capitalizes the incremental costs incurred in obtaining customers, such as commission costs and certain third-party costs. Commission expense is recognized using a portfolio approach over the calculated average residential and business customer tenure. Deferred commissions totaled $8.6 million and $7.8 million as of December 31, 2019 and 2018, respectively, and were included within prepaid and other current assets and other noncurrent assets in the consolidated balance sheets. Commission amortization expense was $4.0 million, $3.6 million and $3.1 million for 2019, 2018 and 2017, respectively, and was included within selling, general and administrative expenses in the consolidated statements of operations and comprehensive income. Deferred commissions of $3.6 million included within prepaid and other current assets in the consolidated balance sheet as of December 31, 2019 are expected to be amortized over the next 12 months.

Contract Liabilities. As residential and business customers are billed for subscription services in advance of the service period, the timing of revenue recognition differs from the timing of billing. Deferred revenue liabilities are recorded when the Company collects payments in advance of providing the associated services. Current deferred revenue liabilities, consisting of refundable customer prepayments, up-front charges and installation fees, were $23.6 million and $19.0 million as of December 31, 2019 and 2018, respectively. As of December 31, 2019, the Company’s remaining performance obligations pertain to the refundable customer prepayments and consist of providing future data, video and voice services to customers. The $19.0 million of current deferred revenue at December 31, 2018 was recognized within revenues in the consolidated statement of operations and comprehensive income during 2019. Noncurrent deferred revenue liabilities, consisting of up-front charges and installation fees from business customers, were $5.5 million and $2.8 million as of December 31, 2019 and 2018, respectively, and were included within other noncurrent liabilities in the consolidated balance sheets.

Significant Judgments. The Company often provides multiple services to a single customer. The provision of customer premise equipment, installation services and service upgrades may be highly integrated and interdependent with the data, video or voice services provided. Judgment is required to determine whether the provision of such customer premise equipment, installation services and service upgrades is considered a distinct service and accounted for separately, or not distinct and accounted for together with the related subscription service.

The transaction price for a bundle of services is frequently less than the sum of the standalone selling prices of each individual service. The Company allocates the sales price for such bundles to each individual service provided based on the relative standalone selling price for each subscribed service. Standalone selling prices of the Company’s residential data and video services are directly observable, while standalone selling prices for the Company’s residential voice services are estimated using the adjusted market assessment approach, which relies upon information from peer companies who sell residential voice services individually.

The Company also used significant judgment to determine the appropriate period over which to amortize deferred residential and business commission costs, which was determined to be the average customer tenure. Based on historical data and current expectations, the Company determined the average customer tenure for both residential and business customers to be approximately five years.