Grande Gets Ready to Light Up Texas System


Overbuilder Grande Communications Inc. will light up the first video, voice and data customers in its San Antonio-Austin cluster by mid-November, its chief executive said.

The company, which was recently awarded a franchise for Houston, will get a big boost in that city from its recently announced $25 million equity investment by power company Reliant Energy.

Like DirecTV Inc., which inked deals with telephone companies to promote its direct-broadcast satellite product, Reliant will pitch Grande's telecommunications products to its energy customers, said William Morrow, the overbuilder's chief executive officer.

"There social capital is very large. They are a member of every club there-the Rotary, the Lions Club," said Morrow. "They want to be seen bringing new products to town."

For Grande's part: "We'll be able to knock on doors using the name of a reliable energy provider. No one knows our brand. It gives our brand credibility quicker."

Reliant also has plant in key rights-of-way, so the two companies are negotiating Grande's use of the power company's fiber.

Grande's business strategy calls for a telecommunications cluster in Texas serving communities along the Interstate 35 corridor. But Grande won't be able to craft similar brand-sharing deals with utilities in key markets like San Antonio and Austin, where municipal utilities sell electricity. Texas state law forbids them from entering the telecom business.

With its current franchises, Grande can build past 1 million homes in 25 communities in the San Marcos-San Antonio-Austin corridor, and pass another 900,000 in Houston. The company has completed its pre-construction walkout in the latter community.

The firm has brokered deals for most of the programming needed to compete effectively, Morrow said.

Grande executives have ties to other overbuilders, including Knology Inc., and have been able to leverage those relationships into "well-priced" programming deals, he said. Programming has also been obtained through the National Cable Television Cooperative, he added.