BOS opens door for cable competitor
Published on March 25th, 1998
STONEHAM, MA - The Board of Selectmen took a small step toward an open cable market at its meeting last week when it voted to waive two minor but time-consuming provisions by which applicants could apply to provide service to the town's residents and businesses.
The Selectmen voted to waive the Massachusetts Cable Television Division's bylaws which mandate that the town issue a national advertisement and have a 60-day filing deadline waiting period. These waivers must still be granted by the MCTD and the Department of Public Utilities.
RCN-BecoCom, a company which has combined two major forces in American business (RCN and Boston Edison), had expressed interest, late last year, in entering Stoneham's cable market.
The next step in the process is to advertise the town's interest in seeking a competitor.
According to RCN Vice President Thomas Steel Jr., the interest is still there.
"When (Stoneham advertises the open market), we will apply," Steel said. "That's what we've been waiting for."
He explained that his company is currently attempting to provide many communities with an alternate cable option since the Federal Communications Commission deregulated the cable industry two years ago.
Richard Jenkinson, public relations director for Media One, explained that his company would invite the challenge.
"We've always supported the entry of new competitors into the marketplace," Jenkinson said. "I think what you're seeing today is good for the consumer."
RCN has already been awarded a contract in Somerville where they are currently receiving new subscribers on a daily basis, Steel explained, although service has yet to be provided. The system will likely be up and running in May.
In that town, Time Warner Cable had a monopoly on the market for years.
Now, with RCN's prices on an 80-channel basic cable package set at $24.95, Time Warner (whose price is over $30 for the same package in Somerville) is beginning to get nervous.
Jenkinson said he is skeptical about the rates proposed by RCN and said that, by the time customers get on line, they may rise dramatically.
"They're obviously seeing that programming is expensive," he said. "It's not an inexpensive proposition to be building a cable system these days."
Media One's standard package presently includes 60 channels and costs consumers $30.68.
Asked how RCN's prices may affect Media One rates, Jenkinson responded, "It's kind of hard to look into a crystal ball and say, 'In two years this is what we're going to do.' They (RCN) aren't offering service in Somerville or any other town yet."
Steel said that Media One has recognized the threat of competition. One way in which the company protected itself from a future competitor, he said, was to provide The Disney Channel in its standard package after it learned that RCN was doing so.
"You can see that sort of subtle shift," Steel explained. "We just need to get a cable license in order to provide the consumer with the competition."
A cable license issuance is a lengthy process. Just two weeks ago, after months of negotiations between the town, RCN and Time Warner, Wakefield issued RCN a provisionary license under which the company is allowed to begin to bring its services on line. It should take the community another four to six months before it reaps the rewards of competition, but, once the work and contracts are completed, the rate payers are sure to be the winners, Steel said.
"I think everyone benefits from competition," he said. "I guess that's what the basic message is."
In addition to cable television, RCN is planning to provide Stoneham residents with competitive rates in local and long distance telephone services and high-speed internet access.
"We're just waiting for the other shoe to drop," Steel said when referring to the companies who once owned monopolies in the state's municipalities. In municipalities like Somerville, he explained, Time Warner must lower its prices and up its customer service if it expects to keep its customer base.
Jenkinson explained that Media One already offers high-speed internet access and is planning on entering the telephone market in the coming year.
In terms of fair play, Steel said that a cable coalition has been attempting to disband the partnership between RCN and Boston Edison. Cablevision has taken out a law suit against Boston Edison claiming that BE should not be allowed to form a holding company in the cable market when it is already involved in other aspects of the telecommunications market.
"We view these thins as, largely, an attempt by the other cable companies to slow the competition trend," he said.
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