Cox Tries to Move On

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Killer Hurricane Katrina laid waste to New Orleans two years ago this Wednesday. But it seems like just yesterday, if you live in the Big Easy.

“It’s tough for people to understand how current Katrina is in our minds,” lamented Greg Bicket, vice president and region manager for Cox Communications New Orleans.

After-effects keep touching its inhabitants, including Bicket.

“I just got a notice that the people who insured my car don’t want to insure my car anymore because it’s New Orleans,” Bicket said. “They have given me 10 days to find another carrier. I can do that, but it is exemplary of the hassle that goes with living here.”

He gave thanks for a popular nearby pizzeria, because his neighborhood grocery store still hasn’t reopened since the levees were breached Aug. 29, 2005.

“There’s still a very rudimentary living going on here,” Bicket said, noting that one Cox manager only just recently moved back to her repaired home, out of a trailer.

As New Orleans’ recovery effort continues to lag behind expectations, Cox’s system is still trying to return to some of the benchmarks the operation enjoyed before the killer storm hit, ripping down the cable operator’s lines and flooding its equipment.

Cox has made vast progress, returning service to 98% of its ravaged network and also upgrading it, but the cable system’s comeback is constrained by the city’s stalled revival.

Cox New Orleans now has roughly 186,000 basic subscribers, compared with 257,000 before Katrina swept across the Gulf. Bicket expects the system to generate positive cash flow, when the year is over. He also said that sales of Cox’s triple-play package of video, voice and high-speed data service are brisk, generating revenue to help make up for the smaller number of overall customers.

But Cox New Orleans in the spring predicted it would have as many “revenue-generating units” — that is, subscribers to video, voice and data services — as pre-Katrina sometime this year. Now the company doesn’t expect that to happen until next year, in the spring or summer.

AHEAD AND BEHIND

“We’re actually ahead of our RGU counts for the passings that have returned,” Bicket said. “But the passings themselves have returned more slowly than we anticipated they would. So with the people who are here, we’re doing even better than we expected. The problem is … this hasn’t been a rapid restoration.”

The total number of homes in the overall New Orleans TV market, which includes 14 parishes and counties, has shrunk from 672,150 pre-Katrina in 2005 to 600,150, according to Nielsen Co. data released last week. That’s a loss 72,000 households, with much of the decline in Orleans Parish, which includes the city proper. New Orleans slid down from being the No. 43 largest TV market to 53rd.

Orleans is one of four parishes that Cox serves, along with St. Charles, St. Bernard and Jefferson. TV homes in Orleans parish have dropped from 174,150 pre-Katrina to 80,790, Nielsen said.

Cox has other challenges. Satellite has doubled its penetration in the overall market since the hurricane. And in St. Charles, officials are giving the cable operator a hard time about its franchise renewal, although Cox expects to prevail.

There has been a resolution on at least one front. Cox was insured for hurricane damage, and those claims have now been settled, for plant damage and interruption of service.

“I think everybody is satisfied, the insurance companies and us, that a fair resolution was arrived at,” Bicket said. Cox declined to comment on the amount of the settlement.

Cox Communications has never wavered in its pledge to stand by New Orleans, and is investing $550 million in its New Orleans system over a three-year period.

Part of that money has gone to not only repair Cox New Orleans’ damaged plant, but also to fund a network upgrade, called the E.O.N., or Extendable Optical Network, initiative.

Two years after Katrina, Cox New Orleans has restored service to 98% of its system nodes and 98% of its network, according to Mike Latino, vice president of engineering.

“For all practical purposes, it’s 100% of what’s available [to restore],” he said. “Really, that remaining 2%, it may be five-plus years before we see that come back. And it will come back probably not in miles, but measured more in feet.”

The unrecovered area is mainly in New Orleans East and the Ninth Ward, Latino said.

New Orleans was one of the first Cox systems to institute the E.O.N. upgrade, bringing the operation to 860 Megahertz this spring, thereby expanding network capacity for new advanced services, HDTV and faster high-speed data, according to Latino. But now Cox New Orleans is bumping up the capacity to 1 Gigahertz.

“Largely, we’ll have that completed this year,” Latino said.

Bicket said he’s encouraged that Cox New Orleans is continuing to see its subscriber count increase, with additions every month.

“It’s coming from better penetrations of homes that were occupied and remained occupied, and also is being lifted by people coming back,” Bicket said. “They’re getting back in their homes and they’re calling us for service.”

HEARING SATISFACTION

St. Charles Parish Council earlier this month held a hearing as it tries to determine if it should invite another video provider into the market. Some parish officials called for the move after complaining about the rate increase Cox instituted earlier this year, and the system’s decision to move the TV Guide Channel to digital service off basic. Cox’s franchise in St. Charles expires in December.

The rate increase was Cox’s first since 2003, with the price of expanded basic going from $42 to $46, roughly an 8% increase, Bicket said.

Brad Grundmeyer, manager of public and government affairs for Cox New Orleans, represented the system at the St. Charles hearing.

“It was quite telling for Cox that only one person was there to speak in opposition [to Cox’s franchise] and there were only 24 e-mails, 0.00017 [%] of the customers we serve in that parish,” he said.

St. Charles Parish plans to have another hearing on Cox, according to St. Charles public information officer Steve Sirmon.

While he said he can’t speak for the council, Sirmon said of the recent hearing, “Some people are very satisfied [with Cox], and some people, for whatever reason, aren’t and that’s just the nature of the business.”

Cox itself is trying to look forward, decidedly more than in the past two years.

This week, Cox New Orleans hasn’t scheduled any special commemorative event for the second anniversary of Katrina for the system’s 745 employees, vice president of human resources John Holly said.

The employee newsletter will have at least one article to acknowledge the date, but that’s it, he said. Last year, on Katrina’s first anniversary, the entire newsletter was devoted to the storm and the system participated in a program to sell commemorative bells to mark the occasion — but opted not to this year.

“We’re trying to do all that we can to try to move people on,” Holly said. “We’re trying to do all that we can to try to re-instill people’s confidence in the economy, in the company, so that they can keep moving forward and not look back.”

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