Cox to Stagger Rate Hikes

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New York -- Cox Communications Inc. executive vice president of operations Patrick Esser said the Atlanta-based MSO will stagger its rate increases in the future in an effort to thwart anti-cable marketing efforts by direct-broadcast satellite competition.

In a presentation at the Credit Suisse First Boston LLC Media & Telecom Week conference here Tuesday, Esser said Cox would change the timing of its rate increases, which usually take effect in January.

"You’re going to see us stagger our rate increases out for longer periods of time," he said. "They may be every 18 months, two years. It won’t be every Jan. 1."

Later, Esser said in a brief interview that the decision was partially driven by DBS competition, as those companies time their anti-cable marketing plans to coincide with annual cable-rate increases. He added that when Cox would set its October rate increases, "DBS would gear up in July."

Earlier, he said Cox expects its average annual rate increase to be between 4%-5% in 2004.

However, he added that DBS’ latest anti-cable marketing campaign -- EchoStar Communications Corp.’s "Don’t Feed the Cable Pig" advertisements -- isn’t having any effect on his company yet.

"I don’t think it resonates with customers," Esser said. "We’ll see in six months."

Esser continued Cox’s public battle with ESPN concerning sports-programming rate increases, adding that the MSO is negotiating with the sports network but that no deal is imminent.

"They just don’t get it yet," Esser said. "They need to wake up. Now at least we’re talking with each other, but I don’t have anything to report that’s going to indicate that a deal will be done in the short term."

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