Cable Companies Casting Wider Net of TV, Web Services

Ben Rush, a 21-year-old Cal State Northridge student, says he used to watch about an hour of TV a day. But for the past month, Rush has had access to a cornucopia of programming--nearly 200 channels--through a new digital cable box provided by Time Warner Communications.

The result? He’s been glued to the tube as much as eight hours daily.

“There’s so many channels,” gushes Rush, a food science major with an appetite for international soccer matches.

Rush also signed on recently for a Road Runner cable modem, a device that allows him to surf the Internet at lightning-fast speeds. “We’ve been impressed,” Rush says.

Will his enthusiasm last? Hard to know, since Rush hasn’t yet received his first monthly bill, likely to be in excess of $80. But for now, Rush and his family are happily wired. And Time Warner Communications is crossing its fingers that there will be more people like them in the days ahead.

After years of talk, cable operators in the San Fernando and Santa Clarita valleys are offering, or about to offer, a full complement of telecommunications services--from hundreds of programming channels to high-speed Internet access, and probably within a year, residential telephone service.

At present, there are only a few thousand people partaking in the Valley. Some areas still don’t have access to high-speed features, and industry experts said consumers should expect delays for promised new services.

“The cable guys are the world’s biggest over-promisers and under-deliverers,” says Bob Diddlebock, an analyst with Janco Partners, a Denver-based investment banking firm.

But that said, the cable operators are on an offensive--trying to out-maneuver satellite services, phone companies and other competitors with an array of new services.

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“In three to five years, cable companies will have the ability to offer telephone service, Internet service and cable service,” noted Paul Janis, acting assistant general manager, Information Technology Agency of Los Angeles.

Nationally, some of the biggest companies in the media/telecommunications arena are in the Valley. Time Warner Communications, in the West Valley and Canyon Country since 1994, would be included in the planned America Online-Time Warner merger. If the deal goes through, it opens even more possibilities for new Internet and programming services.

Adelphia Communications, a little-known Pennsylvania-based company, has taken over the territories formerly served by Century Communications and Tele-Communications Inc., and committed itself to rebuilding its infrastructure and retraining its personnel. (It also will pick up subscribers in the Antelope Valley, through a planned swap of Jones Intercable properties owned by Comcast.) Microsoft co-founder Paul Allen’s Charter Communications picked up about 100,000 subscribers in Burbank and Glendale when it bought Marcus Cable last year.

Charter, with 625,000 subscribers in the region, will also acquire 3,500 subscribers in Calabasas and Hidden Hills as a result of its pending acquisition of Falcon Cable.

MediaOne, operating in Sylmar, Sunland/Tujunga, Kagel Canyon and Santa Clarita, is about to be swallowed by giant AT&T.; MediaOne just completed a fiber optic rebuild of its plant in Santa Clarita, a four- or five-month process that caused a stir with the local citizenry because of cable outages.

This completed MediaOne’s rebuilding efforts in Sunland/Tujunga and Sylmar. The 63,000 customers there now have access to high-speed cable modems. Eventually, there also will be digital cable and telephone service, said spokeswoman Giselle Acevedo-Franco.

“We plan to roll out all three products by the end of 2000,” she says.

All of these companies aspire to do the same thing: Get their customers to buy all manner of telecommunications services from them.

So far, there are only a few thousand Valley customers at the forefront.

For the last four months, Time Warner has been selling high-speed Internet access and digital cable to customers in Chatsworth and Granada Hills, where its infrastructure has been rebuilt. Road Runner is also available in sections of Northridge, North Hills, Winnetka, Reseda, Tarzana, West Hills and Canoga Park.

At present, there are about 2,500 Time Warner cable customers paying an additional $40 a month so they can surf the Net with the Road Runner modem. That includes the aforementioned Rush who, like a few others, is the kind of customer Time Warner holds most dear--those willing to pay not only for high-speed access but for digital cable too.

Currently, there are 3,500 digital cable subscribers in those areas.

Tom Feige, president of Time Warner Communications in Los Angeles, says in 10 months the company will complete an upgrade that has been in the process for more than five years.

“By year-end, high-speed access as well as digital tiers of service will be available to everyone,” he says.

Feige admits there’s still a lot of unanswered questions. With the merger with AOL pending, it raises the possibility of offering IP telephony--the ability to transmit vocal communications through the Internet.

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“This could change the paradigm as far as telephone service is concerned,” Feige says.

Feige insists there will be many more new services ahead. “As time goes by, we’re going to be offering video-on-demand and interesting interactive television applications through that digital set top box.”

Charter Communications has 7,000 digital cable customers in the Glendale-Burbank area, plus it sells its own cable modem service, “Charter Pipeline,” for $49.95 a month. In a few weeks, it will launch a service called Wink, which allows viewers to retrieve additional information about what’s on screen with a click of the remote control.

It’s part of the vision of Allen, the enigmatic billionaire with a portfolio of sports teams, computer firms and entertainment companies. Dotty Ewing, Charter’s vice president of marketing for the western region, says Charter intends to deliver it all--and the television will be the pipe.

“The TV is going to be the appliance that’s critical to the home,” she says.

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Telephone service will happen down the road. Ewing said the company is looking at it through one of Allen’s companies, RCN Corp., the same outfit that’s putting together plans to build a high-capacity fiber optic network to compete against local cable operators, Internet service providers and phone companies. RCN has entered into a deal with Southern California Edison to use the utility company’s existing fiber-optic lines to act on Allen’s ambitions.

Allen’s oft-quoted vision of the wired world is similar to the concept on which many cable and telecommunications companies are betting their future: that broadband will someday soon be widespread, seamless, and as easy to use as electricity. And it’ll be the pipe from which consumers will be tied into the world of information and entertainment. The feeling is that broadband will be ubiquitous, that interconnected networks will blanket the earth, explains analyst Diddlebock. But he says it will probably take 10 to 20 years, given the pace of deployment.

“It will be a glacial, gradual evolution toward the wiring of America,” Diddlebock concludes.

WEB LINKS

Some sites to peruse in cyberspace:

www.newusers.com/isp.htm: A list of high-speed Internet access providers, local and worldwide.

www.firstworld.com: Site for FirstWorld Communications, which offers high-speed Internet access, video conferencing and telephony services in the Los Angeles area.

www.keynote.com: This site offers performance comparisons for various high-speed cable modem and DSL Internet services.

www.home.verio.net: Internet resource company provides Web hosting, e-commerce, DSL and dial-up services. Includes some good descriptions and other information.

Sites subject to change.