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Cox Cable to swap Spokane market with TCI

September 16, 1995

Proposed trade isn’t expected to have a big impact on local channel lineup

By Michael Murphey
The Spokesman-Review

By this time next year, Spokane will have a different cable television company.

Cox Communications Inc. has signed a letter of intent with Tele-Communications Inc. (TCI) to trade a number of cable markets around the country, and the Spokane market is one that will be transferred from Cox Cable to TCI.

“We anticipate a formal definitive trade agreement before the end of this year,” said Alan Collins, vice president and general manager of Cox Cable Spokane.

Both companies anticipate completion of the transaction by mid-1996.

Collins said Cox’s 90,000 Spokane cable subscribers probably won’t see any major adjustments in the channels available to them through TCI.

But when asked whether Spokane cable rates will be affected by the change, Collins was a little more vague.

The rates for Cox’s basic and expanded basic packages are regulated both at the federal and local level, he said, “and the terms of that regulation don’t take into account the ownership of the cable company,” Collins said.

“There has been no discussion about a changed rate structure with TCI,” he added.

Pending federal legislation could change the regulatory structure, though, and under those circumstances, local rate changes could occur. Those changes would not necessarily be related to the switch to TCI.

The two companies are swapping markets in order to consolidate themselves geographically. Such consolidation is crucial, they say, if the companies are going to be competitive in the emerging world order of the communications business.

Telephone companies are rushing to get into the cable business, and cable companies are pushing hard to get into “broadband services” – telephone systems, data transmission and other interactive businesses.

“Our entry into new areas of business, and others’ entry into our business is certainly going to make for a very competitive landscape,” Collins said.

TCI is the nation’s largest cable company with about 12 million subscribers. The Englewood, Colo.based company is the dominant player in the Northwest cable market with franchises in Seattle, Tacoma and Boise, among other cities.

Atlanta-based Cox, meanwhile, is strongest in California and the Southwest. In the swap, it will get TCI markets in the Phoenix area, among others.

“This will help us to strengthen our position in markets in which we already have an interest,” said LaRae Schlichting, corporate media relations specialist for TCI.

“And in the future, it will help us compete against the Pac Bells of the world.”

In addition to Spokane, TCI will obtain Cox markets in Pittsburgh; Springfield, Ill.; Cedar Rapids, Iowa; the Quad Cities area of Illinois and Iowa; and Saginaw, Mich.

In addition to the Phoenix-area system, Cox will receive TCI-owned systems in Bellevue/LaVista, Neb.; Council Bluffs, Iowa; Chesapeake, Va.; North Attleboro/Taunton, Mass; Lincoln, R.I; and St. Bernard, La.

Under terms of the agreement, each company will receive about 300,000 new customers in areas that are “contiguous or advantageous” to locations where they already have a significant presence.

In order to offer low-cost broadband services, the cable companies need large concentrations of customers rather than pockets of customers scattered throughout the country.

Neither Cox nor TCI offered any insight into how the swap might affect local Cox employees.

The deal must be approved both by the Federal Communications Commission and Spokane’s city and county governments. But Collins doesn’t anticipate difficulties in obtaining approval.

“We know of no legal impediments at this juncture,” Collins said.

Saturday, September 16, 1995

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From → Cable Television

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