SMATV operator CableAmerica will face its rival, Cox
Communications Inc., in court in Phoenix over allegations the cable operator improperly
appropriated the competitor's plant from three apartment complexes.
The suit, filed in Maricopa County Superior Court, alleges
Cox is using CableAmerica-owned infrastructure to provide service to 1,200 tenants
formerly served by the satellite master-antenna TV operator.
Attorneys for Cox say the suit is without merit.
"It appears to be an effort by a company which lost in
a competitive process to overturn it by lawsuit," said David Rosenbaum, outside
attorney for Cox.
He added the operator's contract with the three
building owners is not exclusive, so CableAmerica could technically serve tenants as could
other providers. For instance, U S West has applied to become a video provider in Phoenix.
Cox, however, is offering bulk rates for the buildings,
which is a disincentive for an owner to allow access to another provider.
Wiring inside the building, according to contracts, belongs
to the landlord, and that is the only plant Cox is using, the attorney said.
The outcome of the dispute will mean more to the SMATV
operator, it would appear, than Cox. The three buildings represent 5 percent of the
company's subscribers in the Phoenix area, where CableAmerica has attracted 20,000
customers in both apartment complexes and single-family homes.
CableAmerica has lured customers by offering a half-dozen
more channels than Cox, and pricing the service about $3 cheaper. At the moment
CableAmerica is $6 cheaper due to a recent Cox rate hike, according to the SMATV provider.
CableAmerica recently upgraded its plant and Cox
"forcibly took us over," said Chris Dyrek, vice president of the SMATV company.
Further, the cable operator disconnected CableAmerica customers who had paid in advance
for their video services, Dyrek alleged.
Any disconnects of paid customers are the fault of
CableAmerica, Rosenbaum said, because the SMATV operator knew for some time its contract
was ending and should have notified its customers.
It is not the first time CableAmerica has taken on Cox in
the sixth largest cable market. It sued Cox earlier this decade, challenging Cox's
exclusive hold on programming for the Phoenix Suns basketball team. Cox produced and
distributed coverage of the games only to its own customers. The suit was settled before
trial and CableAmerica and other area operators gained access to Suns games.
Though the suit seeks compensation for the plant
CableAmerica says Cox is using, the SMATV operator really wants competitive, dual access.
"The customers are worth more to us than the cable in
the ground," Dyrek said.