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Strategies & Market Trends : Roger's 1998 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Eric Klein who wrote (3435)	2/23/1998 4:43:00 PM
From: Ploni	Respond to of 18691

Subject: ADLAC Following is an interesting newspaper article. While anecdotal, it provides some insight into cable t.v. competition. I had thought that the market was deregulated, and competition was possible, and yet I see very little of it, and monopolies still seem to be the rule of thumb. As a result, subscription rates vary enormously from city to city, and even from neighborhood to neighborhood, as firms can apparently charge whatever the market will bear. Despite this, some, such as Adelphia (ADLAC), still manage to lose money, and a lot of it. * * * Palm Beach Post, February 15, 1998 Homeowner's search brings lower cable rate By Marc Freeman Palm Beach Post Staff Writer Cheaper cable television slowly is coming into focus for about 6,000 homeowners in suburban Boca Raton. Residents in the Boca Del Mar Improvement Association -- encompassing 90 communities and 10,000 homes -- began seeking lower rates six months ago. They found that Adelphia Cable charges different prices for the same service from one neighborhood to the next. Their main gripe is that the 4,000 homes in neighborhoods covered by bulk cable contracts -- mostly condominium, apartment and townhouse complexes -- typically pay $12 less a month than single-family homes in communities without contracts. "There's a wide disparity of what people are paying for the identical service," said Paul McDermott, president of the homeowners' group. Unhappy with Adelphia's terms, the association invited one of Adelphia's chief competitors, Comcast Cablevision, to offer better rates for the 6,000 homes not covered by bulk contracts. Eyeing a valuable franchise, Comcast not only came up with better rates but also offered $100 "signing bonuses" to its prospective new subscribers. The company would pay out $600,000 if all 6,000 homes make the switch. "Signing bonuses are really not unusual," said Diane Christie, Comcast's director of system development in Palm Beach County. Comcast, which has about 140,000 subscribers in the county, is offering a $13.95-a-month, 59-channel package, including HBO and HBO2. Taxes and franchise fees are extra. The service would be delivered under a 10-year-contract, with rate increases capped at 3 percent annually. Comcast also will supply six months of free Internet access for each household. Adelphia's final offer "wasn't even in the same ballpark," McDermott said. Adelphia Regional Manager Mark Galloway declined comment about its proposals. Adelphia is the sole cable operator in the area, with the exception of one small section adjacent to the city of Boca Raton. Adelphia has 257,000 subscribers countywide, including 97,000 in the Boca Raton/Delray Beach area. Adelphia and Comcast have had years of turf wards in the county and the Treasure Coast. The Boca Del Mar Improvement Association's directors are recommending the switch to Comcast. Individual homeowners groups will be voting during the next month. Comcast says it will roll out the cable wire once it obtains contracts with a minimum of 2,000 homes. The association expects that the neighborhood cable wiring and home hookups could be done by the fall.