Issue: September 2006 Issue
Cable Wars Heat Up
For Cox Communications Cleveland, itâ€™s the tale of David and Goliath.
In July, when Lakewood City Council passed AT&Tâ€™s Video Competition Agreement, the first competitive agreement the telecommunications giant has in Northeast Ohio, Parma-based Cox Cleveland was concerned. The agreement allows AT&T to offer similar communication services, including cable television, in the city Cox has held a regulated monopoly over since the late 1970s.
According to Kevin Haynes, vice president and general manager for Cox Cleveland, AT&T is in discussions with Parma Heights and Rocky River, among others – all areas in which Cox services.
â€œ[AT&T] is well aware that we are now competing with telephone service, so it makes sense to target those that will take their core business away,â€ says Haynes.
AT&T launched Project Lightspeed, a $4.7 billion technology upgrade, across 13 states with its competitive video product U-Verse.
The service will feature more than 200 channels, access to public, educational and governmental programming, a digital video recorder and a gaming system, among other services.
â€œWhat Lakewood residents will have in the future that they donâ€™t have today is choice,â€ says Denis Dunn, director of external affairs for AT&T. â€œWhen we unveil U-Verse Internet Protocol, it will be a superior product and competitively priced.â€
Cox Cleveland, which serves more than 70,000 customers across 10 Northeast Ohio communities, believes the video product is just another competitive cable system. But Dunn argues, â€œItâ€™s an IT-based Internet Protocol technology, not cable technology.â€
AT&T feels exempt from a cable franchise because â€œwe are incumbent telecommunications and are regulated by the Public Utilities Corp., which cable franchises are not,â€ says Dunn.
â€œI find it interesting that AT&T is offering to collect fees for Lakewood (something cable franchises are required to do), but say they are exempt from a franchise fee,â€ says Haynes. â€œUnder what grounds are they (AT&T) able to collect that if they donâ€™t have a franchise.â€
Cox Cleveland plans to petition Lakewood City Council to reconfigure its franchise contract to match AT&Tâ€™s terms.
â€œWe have been competing with AT&T in the phone business since 1997 and we didnâ€™t ask for special rules,â€ says Haynes. â€œWe are hopeful the City of Lakewoodâ€™s set of rules are the same for all competitors â€¦ and they are clearly not the same.â€
This record has been viewed 424