Cox seeks to expand video service in San Diego
Cable company is first to use new state law
By Jennifer Davies
UNION-TRIBUNE STAFF WRITER
April 12, 2007
Taking advantage of a new law that allows companies to get approval from the state to offer cable TV, Cox Communications yesterday filed an application to expand its video service in four areas of San Diego County.
Cox said it wants to provide service in Stonebridge Estates, a Scripps Ranch neighborhood; Del Sur, a new housing development near Fairbanks Ranch; Qualcomm Stadium; and the campus of the University of San Diego.
While Cox is the first cable company in the state to use the new law, analysts don't expect other cable companies to start rushing to encroach on each other's markets.
Cox spokeswoman Ceanne Guerra said the company's main objective was to once again provide a full range of services to the Stonebridge area, where it had offered cable TV, phone and Internet service for about two years.
In August, City Attorney Mike Aguirre said Cox was violating state law as well as its cable TV franchise agreement with the city by competing directly with Time Warner Cable in that neighborhood. Cox had said in the past that it would use the new law to once again provide cable TV in the area. It currently offers Internet and phone service in Stonebridge because those services are not regulated by the city.
We just wanted to be able to provide video to our customers, Guerra said.
When the company was preparing to file its application, it decided that the other areas made strategic sense as well. Cox already has cable service at Qualcomm but wanted to use the state application to make it official, Guerra said.
In the case of Del Sur, Cox put in its cable lines as it was being built. Cox, which already provides some services to San Diego State University, also wants to expand its business on college campuses.
Guerra added that Cox expects a ruling from the California Public Utilities Commission as early as May 25.
Time Warner Cable said the potential new competition from Cox is a nonissue. Time Warner spokesman Phil Urbina said the company already faces competition from satellite companies for video service and phone companies for phone and Internet service.
We'll continue to compete with whoever comes into one of our businesses, Urbina said. That's really all I'm prepared to say at this point.
Still, Cox's filing raises the stakes in the increasingly competitive business.
Ironically, the new state law was enacted to help phone companies more easily enter the video business. Previously, companies had to get approval on a case-by-case basis from local governments. Both AT&T and Verizon have been approved to offer video service in large swaths of California.
But despite Cox's plan to offer its video service in select areas, industry watchers do not expect cable companies to use the new law to aggressively expand - at least not in the near term.
Michael Shames, executive director of the Utility Consumers' Action Network in San Diego, said the impending competition from AT&T will quell any full-scale war between the cable companies.
I'm not sure they want to open up two fronts right now, Shames said. They just want to concentrate on one front - the phone companies.
Jeff Kagan, an independent telecommunications industry analyst, said the cable industry is gearing up for the biggest competitive battle ever with the phone companies.
Kagan said that after the battle with the phone companies has played out - with winners and losers emerging - cable companies will probably begin to enter each others' markets, albeit cautiously.
With the old city-by-city franchise agreements, cable companies had monopolies that justified the huge investment building a cable system demands. With the changing competitive landscape, it will be less clear if those investments will pay off.
The cable companies are going to have to choose carefully because there are no guarantees anymore, Kagan said.
Jennifer Davies: (619) 293-1373; email@example.com
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