Cable Wars Heat Up

For Cox Communications Cleveland, it’s the tale of David and Goliath.

In July, when Lakewood City Council passed AT&T’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.

“[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,” 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.

“What Lakewood residents will have in the future that they don’t have today is choice,” says Denis Dunn, director of external affairs for AT&T. “When we unveil U-Verse Internet Protocol, it will be a superior product and competitively priced.”

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, “It’s an IT-based Internet Protocol technology, not cable technology.”

AT&T feels exempt from a cable franchise because “we are incumbent telecommunications and are regulated by the Public Utilities Corp., which cable franchises are not,” says Dunn. 

  “I 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,” says Haynes. “Under what grounds are they (AT&T) able to collect that if they don’t have a franchise.”

Cox Cleveland plans to petition Lakewood City Council to reconfigure its franchise contract to match AT&T’s terms.

“We have been competing with AT&T in the phone business since 1997 and we didn’t ask for special rules,” says Haynes. “We are hopeful the City of Lakewood’s set of rules are the same for all competitors … and they are clearly not the same.”