As competitive situations go, the one in Spencer, Iowa, is shaping up to be a beauty, with Mediacom Communications Corp. preparing to battle the state's most expensive overbuild.
The Middletown, N.Y.-based MSO has gone on the offensive in the community of 4,500 households in the northwest corner of Iowa by slashing prices, padding its channel lineup and introducing digital cable and high-speed Internet access.
"We're proactive and aggressive. We're maintaining competitive rates and optimum quality," said plant manager Mohan Samlal, who arrived six months ago after a 26-year career that included stops with Continental Cablevision Inc. and AT & T Broadband.
His goal is to lock up some 5,000 Mediacom customers ahead of a fall launch by Spencer Municipal Utilities of a $16 million municipal system that boasts a waiting list of 3,000 from among a population of 12,000.
Step one called for shifting Disney Channel to expanded basic, adding 12 new offerings-including FX, MSNBC, Bravo, Comedy Central, E! Entertainment Television and The Golf Channel-then shaving 20 percent off the price. With a six-month contract, residents now get expanded basic for $19.95 per month, a reduction of $5.
For the confirmed cable addict, a 181-channel package, including 54 digital and 45 music channels, is selling for $39.95 per month with a six-month commitment.
Mediacom-which acquired the Spencer network as part of its purchase of 324,000 Triax Telecommunications Co. L.L.C. subscribers-has also launched Internet access to overwhelming support, Samlal said.
"We have a backlog of 71 [installations] to get done in the next two-and-a-half days," he said late last week. "We're going to have people in here working all weekend."
Samlal admitted that Mediacom was swimming upstream against Triax's reputation in Spencer, where residents became so "disenchanted" last year that the city tried to buy out the incumbent.
"But Mediacom came in here with a commitment to service and value," he said. "Now people are wondering, 'Why is the city spending our money to build something we don't need?'"
One Spencer official conceded that some residents "are talking about not switching" to the municipal network, despite offers of two months of free expanded basic.
"I think [Mediacom is] going to hang on to a lot of what they've got," said Bruce Gifford, chairman of the Spencer Cable Commission.
But Gifford insisted that Mediacom's rush to introduce new services hasn't been problem-free, noting that installing Internet service at his home resulted in "30 days of trouble."
"They wanted to bring out another television, telling me that the problem was in my set," he said. "I told them the problem was in the box. Sure enough, when they opened it up, a piece fell out."