Here's one that was pointed out to me:
uniontrib.com
Local cable customers could soon
have choice
Company aims to offer TV, Net, phone service
By Kathryn Balint
STAFF WRITER
February 3, 2000
San Diegans may finally get a choice of cable TV providers after more than
two decades of no choice and no competition.
A new company is proposing to offer cable television, cable high-speed
Internet access and local telephone service in the city of San Diego, and
ultimately the rest of the county.
For some parts of the county, including the city of San Diego, it would be the
first time consumers had a choice of cable TV companies.
Western Integrated Networks of Denver said it plans to build a $600 million
network throughout the county that will compete head-on with telephone,
cable and Internet companies.
The little-known start-up company unveiled its ambitious proposal yesterday
and said its goal was to wire the entire county within the next five years.
New competition could translate into fewer rate hikes, if not lower rates.
Cable TV rates nationally have risen about 24 percent since 1996, according
to a report last year by Consumers Union.
"When you look at cities where there is competition, you'll find the rates are
not going up; they're staying where they are," said Marc Jaffe, the city of San
Diego's cable TV program manager.
Representatives of Pacific Bell, Cox Communications and Time Warner
Cable said yesterday that they welcomed the competition.
Western submitted its application for a cable TV franchise to the city this
week and plans to submit a similar application to county government by the
end of this week for the unincorporated areas, said William Mahon,
Western's vice president.
And, depending on the outcome of those applications, he said, Western
would then apply to the county's 17 smaller cities.
If the applications were approved, Western could begin signing up customers
in about a year, Mahon said. About 300 jobs would be created locally.
Installing a competely new network of fiber-optic cables throughout the
county would require streets to be dug up to lay the new lines.
As the lines were laid, Mahon said, Western's service would be phased in
neighborhood by neighborhood.
He said San Diego County was chosen largely because of its economic
growth and its high-tech industrial base.
"We just think the demographics are right," he added.
San Diego is the fourth city in the last two weeks for which Western has
announced plans to build a broadband network. The others are Sacramento,
Dallas and Austin, Texas, and Mahon said the company is talking to officials
in other cities as well.
But who, exactly, is this new kid on the block who is willing to take on the big
guys?
Western was quietly launched a few months ago. Its chairman is James
Vaughn, a veteran of the cable TV industry who sold his Denver cable
company, FrontierVision Holdings, for $2.1 billion last year.
Besides investments from Vaughn, the privately held Western Integrated
Networks said it also has received financial backing from J.P. Morgan & Co.,
First Union Capital, Madison Dearborn Partners, Columbia Capital,
Providence Equity and the Blackstone Group. So far, Western said, it has
raised $478 million.
Still, the company is virtually unknown in the field.
"Never heard of them," said Dan Ballister, spokesman for Time Warner
Cable in San Diego, which has about 195,000 cable television subscribers in
the county.
But Ballister said Time Warner is "ready to compete."
For decades, there has been little competition among cable TV companies in
San Diego County.
In the city of San Diego, Time Warner provides cable television in the area
generally north of Interstate 8, and Cox covers the area to the south, as well
as most areas in East and North County.
In the city of San Diego, the north-south split leads some people to conclude
-- wrongly -- that the city condones cable TV monopolies in its
neighborhoods, Jaffe said.
But the franchise agreements made with Cox and Time Warner in 1979 and
1980 specifically allow competitors to move into the market. For the last nine
years, the city has actively solicited new cable TV providers.
Until now, no one applied.
Richard E. Wilken, the city of San Diego's director of information technology
and communication, said companies had been reluctant to spend hundreds of
millions of dollars to install new cable lines when the only service they could
compete for was cable TV.
Now, he said, the opportunity to offer high-speed Internet access as well as
phone service makes such a large capital investment more likely to pay off.
"The economies are starting to change," Wilken said. "I hope it will spur
competition."
Competition already is starting to heat up among telephone, Internet and cable
TV providers as they begin to expand their offerings.
For instance, Cox Communications, the largest cable TV company in the
county, with more than 500,000 customers locally, began offering residential
telephone service about a year ago.
Cox, Time Warner and Daniels Cablevision added high-speed Internet access
to their offerings in the last few years.
Pacific Bell, the local telephone company, also has branched out by offering
Internet access. And it hopes to be given permission by the state to offer
long-distance telephone service as well.
"We've worked very hard to create a competitive marketplace in San Diego,"
said Pacific Bell spokesman Brian Brokowski.
Western's plans to enter the field, he said, "show that customers are
increasingly gaining more choices." |
