Policy

Cox Ousted From TWC Turf

6/23/2006 8:00 PM Eastern

Two years after it first complained, Time Warner Cable in San Diego is getting action from city officials, which moved to oust an unfranchised competitor from a pocket of the operator’s territory.

The interloper, Cox Cable San Diego, will be given the boot.

City attorney Michael Aguirre has determined that Cox has violated the terms of its franchise, as well as state law, by offering its triple-play bundle to customers in a development still under construction within the city.

AUG. 18 DEADLINE

Cox has signed up about 130 video customers in the Montecito subdivision north of the San Diego River. The development will ultimately have 1,000 homes. The city has given Cox until Aug. 18 to withdraw video services from those customers.

San Diego does not have regulatory authority over Internet products, and telephony may be delivered without regard to cable franchising boundaries. Therefore, consumers in the subdivision may continue to buy those services from Cox but they must buy video from Time Warner, the franchisee for the area.

Cox moved into the subdivision as soon as the initial homes were occupied, according to Marc Farrar, vice president of government relations for Time Warner Cable. His company notified the city of the overlap as soon as it came to the operator’s attention, about two months after the development opened.

Cox and Time Warner compete just across the street from the development, said Mary Ball, Cox vice president of government relations. But that competition takes place in the city of Poway, where about 1,200 homes may choose services from either operator. Cox also can compete with Time Warner in county areas.

NON-COMPETING AREAS

The San Diego city franchises governing each of the operators have specific, non-competing areas.

The city attorney, in a letter to Cox on May 26, said that unless the operator was ready to “wire and serve” all of Time Warner’s territory, it is in violation of the state’s level playing field provisions, which require that competing providers have matching service areas.

Ironically, it is that very provision that telephone companies are trying to eliminate through a cable franchise reform bill currently moving through the California legislature.

“We believe we’re authorized to serve this area. It’s unfortunate the city attorney has reached this decision,” Ball said. “Most new developments are co-built. It’s commonplace.”

Ball said Cox officials are still trying to educate city council members in an effort to resolve the situation. But the city attorney is sticking to his guns and directed Cox to notify the consumers by June 15 of the pending change in vendors.

The two operators are not talking to each other about the situation, Farrar said. Time Warner is contacting consumers in the development directly to arrange transitions.

March