Cable options not necessarily better for consumers
Published 12:00 am Friday, June 20, 2008
By JIM MUSTIAN
Fed up with expensive cable bills and limited choices, consumers in some parts of Louisiana this week celebrated an encouraging sign of things to come upon learning of Senate Bill 807’s cakewalk through the Louisiana Legislature.
Residents and officials in St. James Parish, however, aren’t popping the cork just yet.
So complicated is St. James’ cable conundrum, indeed, that it appears it will take more than a sweeping franchise reform to bring about any real change. St. Charles Parish, however, has a far better chance of being affected, officials said this week.
In St. James, parish officials and consumers alike have for years been among those pushing for more competition – but not because of unfavorable pricing.
A conflict has arisen there because of an unpopular disparity in available services throughout the parish.
St. James currently honors rights of way agreements with Cox Communications and Charter Communications, but the areas served by each are mutually exclusive from the other, as both sides have maintained that competing – or “overbuilding” as it’s called in the cable business – would not be worth the investment.
(“Overbuilder” is often used pejoratively to describe cable companies that tread into areas already established by other providers.)
Wilson Malbrough Jr., chairman of the St. James Parish Council, said residents of the parish’s two municipalities, Lutcher and Gramercy, have been “mostly satisfied” with Cox as their provider.
But elsewhere in the parish, he said, Charter has refused to upgrade its services.
Charter offers what it calls “double play” service in St. James – digital cable and high-speed Internet – but officials said the divide in the parish caused by the Mississippi River has complicated efforts to provide high-definition television or digital video recorders (DVR). Nick Pavlis, director of government relations for Charter in Louisiana said Charter is reluctant to upgrade services on one side of the river before it can do the same for the other.
“It’s a Catch-22 because our younger constituents are interested in those services, Malbrough said, “but we can’t find a provider who will say ‘we’ll do it for you.’”
But with both agreements set to expire at the end of the year, the parish has stepped up its efforts to persuade the companies to compete or find some way to offer the same services so St. James residents can all have the same options.
“That always sounds good to consumers but the reality of it is that the payback just isn’t there,” Pavlis said. “There’s one piece of a pie (in St. James) that’s only split so many ways.”
Nevertheless, Malbrough has taken it upon himself over the last six months to invite other providers to the area and has demanded explanations from both companies as to why they continually opt against expanding their services.
Sharon Kleinpeter, vice president of public and governmental affairs for Cox Communications in Greater Louisiana made the trip to Convent in early May to address the Parish Council regarding the issue.
But while the Council welcomed her attendance, her message did little to allay the concerns.
Kleinpeter said Cox had no plans of expanding its services and would continue to do business the way it always has, opting against obtaining the statewide franchise permit.
“I don’t anticipate any changes in St. James Parish,” she later said in an interview.
As far as any change in regulation is concerned, St. James officials said they were not worried about losing any input over cable companies in the parish because of the new bill.
“I don’t think I have oversight now,” said Parish President Dale Hymel Jr. “[The cable companies] don’t come to us for much of anything.”
Hymel said most matters are dealt with through the Federal Communications Commission.
If the bill survives, as it’s expected to, the question remains whether AT&T or another cable company will take its chances in St. James.
While Malbrough said an AT&T entry could create “an unfair market” for other cable companies that could come to St. James, Hymel said he wouldn’t mind the company.
“I’m for anything that would give our residents a choice,” Hymel said.
St. Charles route paved
St. Charles consumers have also complained in recent years about a lack of competition, as Cox Communications remains the only show in town besides satellite.
Last year, the parish even considered inviting another provider when renegotiating Cox’s franchise agreement after some residents had been upset over the disappearance of the TV Guide channel on basic cable and a rate increase.
“We’re still hearing about that today,” said Tim Vial, chief administrative officer for St. Charles Parish, referring to the TV Guide channel.
Cox has attributed the rate increase to improvements and the TV Guide channel removal to a simple business decision. Vial also said things had largely settled down and the relationship between Cox and the parish continues to be a smooth one.
In an email message, Parish President V.J. St. Pierre Jr. echoed that sentiment: “I think Cox does a great job and is a great community partner in St. Charles Parish.”
Councilman Billy Raymond said he had not heard anything from his constituents about the new bill, but he pointed out some potential disadvantages to changing things up.
“I personally do not favor it as I do not like taking local government out,” he wrote in an email. “I also feel like this could potentially limit competition.”
But Vial said he thinks little will change in St. Charles as far as regulation goes.
Steve Sawyer, vice president of public and governmental affairs for Cox in Greater New Orleans, said Cox had partnered with AT&T on the franchise bill and has welcomed it as an opportunity to correct public perception.
“Some people think we have an exclusive franchise in places like St. Charles Parish,” he said. “That’s not true.”
Sawyer said he wasn’t sure whether AT&T would try its luck in St. Charles, but he acknowledged that it was more plausible than ever.
“Now at least the playing field is fair for everybody,” he said.
Vial pointed out that AT&T already has an infrastructure in place in the parish.
“People have wanted competition,” he said. “Now it appears there will at least be an avenue for that.”