Cable Competition Heating Up in Lebanon

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The battle for control of the local cable market in
Lebanon, Ohio, has turned ugly.

The city, which launched a municipal telecommunications
network that is competing for Time Warner Cable's 4,000 local cable subscribers,
filed a lawsuit alleging franchise violations against the MSO dating back to 1981.

Allegedly, Time Warner breached its franchise by failing to
provide public-access facilities and programming, a two-way institutional network and
certain other free-access services.

An attorney for the city did not return repeated calls
requesting comment. Meanwhile, Time Warner officials were equally tight-lipped about the
lawsuit, preferring to "let the courts decide this matter."

"But we believe we were in compliance with the
franchise that was negotiated in 1981 and we were in compliance with the franchise that
was renegotiated in 1996," said Jennifer Mooney, vice president of public affairs for
Time Warner's Cincinnati division.

Mooney added that all outstanding issues between the two
sides were resolved during the 1996 negotiations. "Otherwise, neither of us would
have signed the deal," she said. "They're raising issues from an old
agreement."

Mooney declined to speculate on why the city waited until
now to raise these issues, rather than doing so during the renewal process. "We have
no idea what they're doing," she added.

One industry observer, who asked for anonymity, said the
lawsuit was brought on by panic, as Lebanon residents abandon the city's cable system
to return to Time Warner.

However, Lebanon deputy director of telecommunications Jim
Baldwin said, "The opposite is true."

Out of 1,000 subscribers already activated and 2,200 on a
waiting list, only 26 have disconnected their city-offered cable service or asked to have
their names dropped from the list, Baldwin added.

Lebanon has been a hotbed of competition in recent months.

Time Warner slashed the price of its expanded-basic tier
last month by 27 percent, or $5.44 per month, while making Lebanon the first of its south
Ohio systems to launch a digital-programming package.

Its lowest-priced digital package now offers area consumers
a total of 113 video channels, 40 digital-music channels, a set-top box, navigator and
remote control for $23.98 per month.

Even so, Baldwin remained unimpressed.

"In our minds, a lot of what they launched was filler
-- more pay-per-view channels, more movie channels and a lot of stuff we already
offered," he said. "If you look at it on a package-to-package basis, we're
offering more, and we're still cheaper."

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