For the past few years, cable service in North Orange County has been in limbo.
In 2002, Adelphia Communications Corp. filed for bankruptcy reorganization after an off-balance-sheet debt scandal. Founder John Rigas and his sons were convicted of or plead guilty to fraud charges.
Then last year, Time Warner Inc. and Comcast Corp. formed a venture to take over Adelphia’s operations. That left Adelphia,the county’s second largest cable operator here after Cox Communications Inc.,largely a caretaker for 150,000 subscribers in Anaheim, Santa Ana and elsewhere.
Enter Time Warner Cable.
In August, the Time Warner Inc. unit and Comcast paid $17 billion for Adelphia’s operations and divvied them up by regions.
Time Warner got 3.3 million Adelphia subscribers, including in North County, the Inland Empire and nearly all of Los Angeles.
Fred Stefany, president of Time Warner Cable’s Los Angeles south division, recently talked with the Business Journal’s Jennifer Bellantonio about the company’s plans here.
What areas of Orange County do you provide service to?
We serve the northern 60% or so of Orange County.
How many subscribers do you have?
I have 616,000 across both OC and the Inland Empire. We don’t break them out.
What are your plans for North County?
We plan on improving the channel lineups to make them easier to understand. We already added hundreds of free video on demand titles to the former Adelphia properties. Coming at the end of the year, we will be launching our digital phone product that is already active in Orange, Huntington Beach, Garden Grove, Fountain Valley and Westminster. We also are working hard on improving processes to bring the service levels higher.
What are the biggest challenges to the Orange County market?
Orange County is a tough market. The consumers are very demanding. Additionally, there is no stereotype to try to address. There are large groups of many ethnicities and demographic categories and we need to satisfy and delight all of them.
What opportunity do you see here?
We see a very large opportunity for Orange County. The market was very fragmented, which meant cable providers did not have the economies of scale to effectively advertise. As a result, consumers and businesses disproportionately heard the messages of our competitors and missed why cable is a superior product and value. As a result, cable has not done as well as it does in markets where there is a critical mass.
How are you making channel lineups easier to understand?
We will be making them genre based. So from zero to 99 you have your standard most popular channels. Then in the digital space (100 and higher) we clump them together for easier surfing. Entertainment will be 101 to 130. Lifestyle is 141 to 180. Kids is 181 to 200. News is 200 to 240, sports is 250 to 280, Espa & #324;ol is 300 to 330. We then will have a “portal channel” to go to for (video on demand). We are also providing customers with an A to Z channel finder.
Do you plan on changing your services?
We plan on improving all of them. We are adding more channels. We are increasing the speeds of our Road Runner Internet service and adding features to our digital phone. This week alone we are adding three-way calling to our customers for free.
Do you plan on offering services for businesses?
Yes. Time Warner has a full suite of business services. Neither Adelphia nor Comcast focused on the commercial market. That left AT & T; and Verizon with virtual monopolies, and the businesses in Central and North Orange County had no alternative. Now for the first time, they have a less expensive option for data and video needs. We offer custom tiers of speeds all the way up to dark fiber that is typically priced at a fraction of the regional Bell operating companies, or AT & T; and Verizon.
What kind of programming changes do you plan to make?
We are adding channels in a few areas. First, as I mentioned, is video on demand. Second we are beefing up our Hispanic offerings adding both in language channels and other channels that are in English but appeal to the Hispanic audience, like Si TV. Finally we are adding (high-definition) channels too. These will all come later this fall.
How important is the Hispanic market in North County? How does it differ from the general audience?
The Hispanic market is important in all of OC, but we now serve Santa Ana and many other Hispanic cities. We have found that there is a portion of this market that wants different products. That’s why we created a special TV package call Nuestra Tele. Nuestra Tele has more of the channels that this market cares about and takes out some of the expensive channels that they do not care about. Thus, they get a high value and low cost video service.
How do you plan to market Time Warner in Orange County?
We have already changed our marketing tactics. Because we now serve 75% of the greater Los Angeles designated market area, we can effectively use all mass media tactics. We will use TV, radio, print, outdoor and then the traditional tactics of direct mail and community events.
Cox is a dominant provider in Orange County. Do you see them as a competitor?
We don’t compete with Cox. They serve South Orange County and we serve North and Central. We do compete fiercely with AT & T; and Verizon in Internet and phone and DirecTV and Dish in video. We have competed with them for a long time. Only now we have some strength to be able to deliver our messages.
How do you plan to compete with satellite TV or Internet and calling services from phone companies?
On the TV side, we offer many more channels for less money than satellite. Satellite requires contracts and expensive boxes to purchase at each TV. They also do not have local service operations or payment centers.
On the Internet side, cable’s speed is far beyond DSL. We do not charge for service calls and are open 24/7 to take calls. We offer more choice in broadband services. We are launching three tiers of Road Runner service.
On the phone side, we offer an unlimited local and domestic long distance (plus Canada) service for $39.95 a month. We are about 30% cheaper than AT & T; or Verizon. Our service also includes call waiting, caller ID, call forwarding and now three-way calling all (in the $39.95 plan). Digital phone uses digital technology so the sound quality is better. Finally, it’s fully 911 compliant, meaning your address will show up at the 911 center if you needed to make an emergency call.
Then we can combine these all on one bill to save hassles for the customers. In the area of customer service, we have flexible service hours, 30-day money-back guarantees, on-time guarantees, multilingual customer service, 24/7/365 call centers.
What is the biggest advancement in cable that will or has helped bring in new customers?
Every year we seem to have one. A few years ago it was video on demand. While it is going mainstream, you still can’t have it with satellite. Two years ago, we provided an alternative to the phone company for phone. Last year (digital video recorders) were huge. Now we are testing services like caller ID on TV and Start Over. Start Over allows customers to hit a button on the remote and go back in time to the start of the show. There is no need for any advance thoughts or actions.
