A little over two years after it activated its first node,
the municipal cable system in Wadsworth, Ohio, is on track to sustain itself financially,
and it has created a dent in the penetration of its competitor, a Time Warner Cable
The city's electrical utility had signed 2,228
customers as of March 1, according to city-services director William Lyren. The cable
operation is incomplete; only nine of 16 nodes have been constructed.
Before adding video, City Council members were advised that
the cable operation would have to attract at least 1,800 subscribers from among
Wadsworth's population of 18,000 to cover its program-purchase costs and debt
Wadsworth's system has grown even though Time Warner
dropped its price for expanded basic drastically in the face of competition.
Formerly, the Time Warner system had charged $53.93 monthly
for expanded basic and fees. Now, it charges $24.14 for an expanded tier (including $5.50
for a basic tier), which includes Disney Channel and Fox Sports. That's 19 cents
lower than the municipal offering.
"They've done a fine job of being
competitive," Lyren said.
The price cut has benefited the entire community, although
Wadsworth, which is building the plant itself, does not serve the whole community yet.
Lyren reported that consumers said Time Warner charges the competitive rate even in
noncompetitive neighborhoods if consumers ask for it.
The rate cut is not so beneficial to Time Warner, a
profit-making business. The city rates are designed to be nonprofit, covering $8 per month
in programming costs, plus debt service, with enough left over to pay 5 percent apiece
into the general fund and a PEG-access (public, educational and government) support fund,
Local Time Warner executives did not return calls by press
Since the systems' rates and channel lineups are
similar, Lyren attributed the success of the overbuild to prompt service. Time Warner
operates out of a cluster from nearby Akron, while Wadsworth electrical technicians can
respond to problems in less than an hour, he said.
When the plant is completed, the city may survey citizens
to determine their support for Internet access and telephony, too, Lyren added.