Texas Turf Enough for Two? - Multichannel

Texas Turf Enough for Two?

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Executives at Guadalupe Valley Communications Systems, a small-town operator outside San Antonio, Texas, said they have held their own against competition from the sky.

But the next challenge galloping down the dusty road has taken them aback.

Meet Time Warner Cable, overbuilder.

"I'm a little puzzled why Time Warner is coming out this way. It doesn't make sense," said Marc Miller, director of operations at the operator, which reaches communities such as Bulverde Hills, Fair Oaks, Boerne and Canyon Lake.

"This used to be the country," he said, spread across three counties and containing 15-acre ranches.

Miller's firm has provided telephone and cable service in the communities for 15 years and "done a pretty good job against satellite competition:" penetration in Fair Oaks is 70 percent; 65 percent in Canyon Lake; and 60 to 65 percent in Bulverde Hills.

In all, Guadalupe serves 7,500 homes with video and has another 38,000 to 40,000 telephone connections. It's upgraded to digital and sells digital-subscriber-line service for high-speed data.

Half the plant Time Warner installs will have to be buried to serve Fair Oaks, Miller said, raising costs. Canyon Lake poles must be changed out to clear space. And the region has 20 homes per mile or less.

"We're continuing to follow the growth pattern," explained John Gary Herrera, spokesman for Time Warner San Antonio.

He said the system has had franchises extending north and northeast of the city since the 1980s. It has applied for a franchise in Fair Oaks because that represents an unserved pocket surrounded by Time Warner customers.

The area represents 2,400 homes, Herrera said, adding, "We've had a lot of people calling us, asking to deliver service."

Guadalupe Valley Communications Systems already competes for telephone customers with SBC Communications Inc., Herrera noted, and Time Warner began competing as an overbuilder a year ago.

Miller replied that Guadalupe Valley didn't realize Time Warner had moved into Bulverde Hills. But Fair Oaks did notify the incumbent and Guadalupe Valley was able to stall issuance of a franchise until later this month.

"We want a level playing field," Miller said, adding he has problems with the pact pending with Time Warner. "I feel like I'm putting fingers in the dike."

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