CABLE TELEVISION

BY THE NUMBERS
A look at state-issued video service authorizations in Allen, Auglaize, Hardin, Putnam and Van Wert counties:

73
Townships and villages with state-issued video service authorizations

11
Service providers with authorizations

48
Areas served by Time Warner Cable

9
Areas served by Wapakoneta-based TSC

9
Areas served by New Knoxville-based NKTelco

CRAIG J. OROSZ illustration The Lima News

8
Areas served by Orwell Communications

Competition for one

New rules arent changing choices
hen youre tired of watching one television channel, you can easily switch to another with a single click of a remote control. Its not nearly that easy for residents fed up with the selection or price on their local cable systems. Most people in the region find monopolies controlling their viewing options. I have heard over the years the people wish there was competition, said John Nixon, the president of Lima City Council, who admits he doesnt really mind his current television service. It goes to the fact you heard of so many cities like Columbus and whatnot that have two to three different companies. Theres a perception that more competition means better prices, better service or both. Advocates for cable competition thought June 25, 2007, would be the start of a new era for Ohio. Thats when Gov. Ted Strickland signed Senate Bill 117 into law, which moved the franchising of cable companies

6
Areas served by Glandorf-based Glandorf Telephone Co.

5
Areas served by Quality One Technologies

UNHAPPY WITH YOUR CABLE?

The Ohio Department of Commerce accepts complaints about individual cable providers. To complain, call 1-800-686-7826 between 8 a.m. and 5 p.m. weekdays or fax a complaint form to 614-644-1469.

5
Areas served by Fort Jennings-based FJ Communications

5
Areas served by Buckland-based BTC Communications

2
Areas served by Kalida Telephone Co., which has unexpired franchise agreements in four other townships

1
Areas served by Middle Point Telephone Co.

1
Areas served by Arthur Mutual Telephone Co. Source: Ohio Department of Commerce

to the state level and theoretically opened the industry up to competition. Parts of Ohio have seen new companies come into the market, just not this part of Ohio. Of the 73 townships and villages in Allen, Auglaize, Hardin, Putnam and Van Wert counties served by the stateissued video service regulation, only 23 have more than one company serving them, according to the Ohio Department of Commerce. Most of those already had more than one company operating there before 2007, just in different portions of rural townships. Its not led to one single bit of competition around here, said Lonnie D. Pederson, chief operating officer for TSC in Wapakoneta. Its only made the big gorillas even stronger.

Changed regulations
The telecommunications industry pushed for the 2007 changes. In the pre-reform world, a company had to negotiate with every city and township where it wanted to provide service. Now, that company just needs to work with the Ohio Department of Commerce, filing a $2,000 application fee and a stack of paperwork explaining its plans. The rules only applied to cable television providers, not satellite companies or Internet and phone services provided by cable companies. Advocates argued the onestop process could speed up the world of competition. Jonathan McGee, executive director of the Ohio Cable Telecommunications Association, argued there See CABLE A6

By DAVID TRINKO dtrinko@limanews.com 419-993-2150

CABLE from A1
gram for the Ohio Department of Commerce. Weve seen two patterns emerging with it, she said. One is in more urban areas, such as Columbus, Cleveland and Cincinnati, more of the bigger companies are in competition now. Were also seeing something interesting in rural companies. Smaller cable companies or telephone independents are providing cable and creating some competition out there. Finfrock also emphasized the states system gives consumers more protections, including a consumer hotline for people having trouble with their cable provider.

already was plenty of competition. Ohio had a competitive video market prior to the state legislation, McGee wrote in an e-mailed interview. Most Ohioans had the choice, and continue to have the choice, of at least three multichannel subscription video services, in addition to getting their TV over the air. Pat McCauley, government affairs manager for Time Warner Cable, said his company finds the new system makes it easier to focus on the programming and customers. Our customers have many choices to spend their entertainment and information dollars on, McCauley said. There are direct-to-home dishes, local sports events, even movie theaters. Weve been competing against those folks for years and years. Technology changed the whole discussion anyway. Very few companies specialize in just TV programming anymore, with most companies now offering Internet and phone service as well.

basic service cable television jumped 4.6 percent in 2006, according to a Federal Communications Commission report on prices released in 2009. In a 13-year period, the average community saw an increase of 122.1 percent, compared to a 38.4 percent increase in the Consumer Price Index. A 2007 study by the Mackinac Center for Public Policy found markets without competition in video services had rates 15 percent higher than in those with dueling companies. Economic theory appears correct in the cable sector: Competition means lower prices. Deregulation might not, though. Youre always cautious when you hear about deregulating natural gas or electricity to save money, Nixon said. Im not so sure its taken everything down, but on the other side, where would prices be if they hadnt done it? In Ohios cable industry, the state-run program has generated cable competition Benefits of competition in some areas, said Teri FinThe rates for expanded frock, who oversees the pro-

The smaller guys

Smaller telephone companies began reaching into the cable market in the 1990s as the technology improved. While they may be growing into competitive players, it has little to do with the statewide franchising, local cable operators said. Any time you can deal directly with someone on the local level, I think its better, said Preston Meyer, general manager for New Knoxville-based NKTelco.

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His company expanded to Anna in Shelby County last year, marking the first statewide application and putting the company in direct competition with Time Warner Cable there. NKTelco carefully assessed the risks before making a move, he said. Youre doing house counts, investigating the types of services already there, Meyer said. Theres months of work that go in preplanning to bring the product to fruition. Then theres engineering, marketing studies. It takes a lot of work. Almost as an afterthought, Meyer noted the work involved with literally running a cable to each home wanting the service. TSC, which started as a telephone provider for Wapakoneta, Cridersville and surrounding areas back in 1895, has been in the cable game since 1998. It already had franchise agreements with Cridersville, Fort Shawnee, St. Marys, Uniopolis and Wapakoneta. Now its carefully evaluating its next move, Pedersen said. The company is building fiber lines into Lima, with a connection heading to the WLIO studios on Rice Avenue. Fiber it built to the Bath schools could lead to

Time Warners McCauley cable opportunities in subdivisions nearby. It has a said the company charges a state video service autho- fair price for its services. Weve always done our rization in nine areas, including Perry Township. best to make our rates affordable for our cusAiming for TW tomers, he said. Time Warner Cable is the Another potential condominant cable provider in tender could be AT&T. The the region. It has video ser- company introduced its Uvice arrangements with 48 verse throughout the state of the 73 areas in a five- in recent years, including a county area. Its also the December 2008 launch in only cable provider inside parts of nearby Findlay. the largest city in the While we cant give our region, Lima. specific plans for Lima, this is Making a run at it inside a great TV service, and we Limas city limits could be cant wait to expand it so challenging, Pedersen said. more consumers can experiWeve had good talks ence this new TV choice, with Mayor (David) Berger, wrote Chris Bauer, who and hed sure like to have us works in corporate communithere, Pedersen said. cations for AT&T, in an e-mail Were going to have to interview. For competitive make a lot more money reasons, we do not disclose before we can afford to our future markets or details make that happen. of our deployment plans. Half the trouble could be Whats next in cable comthe strong-willed incum- petition is just as unclear, bent, he said. McGee said. Two and a half Its very capital-inten- years after the state franchise sive, and you have to build for video service went into the infrastructure, Peder- effect, industry insiders still sen said. Then youre arent sure if the consumer going against a powerhouse. will ever notice a difference. Time Warner is known for As technology changes, predatory pricing to keep the old paradigms will shift, the competition out. Theyll making it even harder to lower their rates over a ascertain what, if any, builders to keep people out. impact this legislation Otherwise, theyre real might actually have. happy to keep the prices You can comment on this high to customers. story at www.limaohio.com.

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