Nine communities outside of Minneapolis/St. Paul, Minn., are ready to begin negotiating the first competitive cable franchises ever issued in the Twin Cities area.
The group is represented by the Northwest Suburbs Cable Communications Commission, which has declared WideOpenWest LLC, Everest Connections Corp. and Seren Innovations Inc. technically, legally and managerially fit to compete with MediaOne Group Inc., the area's incumbent operator.
The coalition, which represents 70,000 cable viewers, hopes to have all three franchises locked up by the end of next month.
But NSCCC executive director Greg Moore isn't counting on all three companies entering the market. "Given the economics, there's a question of whether three overbuilders can survive, along with an incumbent," he said.
As the area's existing operator, MediaOne believes it has a leg up on the competition. The MSO-which was recently acquired by AT & T Corp.-is close to completing an upgrade in the nine NSCCC communities. It has already launched Road Runner Internet service in some upgraded areas, with telephony to follow.
"We think this puts us in the driver's seat," MediaOne director of communications for the Twin Cities Brian Dietz said. "The competition hasn't even begun laying its cable in the ground, and we're ready to begin offering enhanced services to our customers."
Among the competition, the one considered most likely to proceed is Seren, a subsidiary of Minneapolis-based Northern States Power Co., which will try to take advantage of its parent's reputation in the community.
Seren spokesman Pat Petschel said the company has also applied for franchises in the Minneapolis suburbs represented by the Quad Cities Cable Commission. It offers cable, Internet and phone services in St. Cloud and St. Joseph County, Minn. The candidates likely to pull out, therefore, are WOW and Everest.
WOW is reportedly negotiating with dozens of communities in the area, including Minneapolis/St. Paul. However, it has recently raised questions about its intentions by placing franchises in Portland, Ore., and Dallas on temporary hold, presumably over competitive issues.
"It's others who are saying that," WOW spokesman Michael Steinkirchner said. "We're still working hard in those markets. But we want to make sure that whatever we do makes sense for us."
Everest, meanwhile, is a new face on the telecommunications scene. The NSCCC deal would be its second franchise, joining a recent deal with Mission, Kan. It has been granted a telecommunications franchise to offer phone service in Lenexa, Kan., with a cable franchise expected to be issued soon.
Company officials admitted that they are looking at a $1 billion outlay to build up to 20,000 miles of cable plant in the area. Nevertheless, president and chief operating officer Michael Roddy said he hopes to have 50 franchises in the area completed by year's end.
Once the NSCCC issues its franchise to Everest, the company hopes to begin construction within 90 days, with the first customer coming online three months after that, he added.
Roddy said going up against the AT & T brand name will not be a problem, given consumer dissatisfaction with MediaOne's history of service problems in the area.
"It's difficult to repair a brand name once it's been damaged," he added.