Adelphia Communications Corp., the bankrupt cable operator that dominates North County, plans to move more than 200 jobs from Santa Ana to Anaheim in a consolidation.
The move comes as Adelphia weighs options for selling chunks of the company, possibly to a venture of Comcast Corp. and Time Warner Inc. Adelphia’s Orange County and other regional operations are seen as crown jewels.
Customer complaints about billing, installation and repair have been nagging concerns for Adelphia here and are behind the consolidation. Combining operations is one way for Adelphia to come to grips with these concerns as its cash-strapped parent prepares to sell its network to pay off more than $20 billion in debt.
The move of jobs to Anaheim is expected to take place in the next few months, said Pennie Contos, area vice president for Adelphia’s operations in Orange, Riverside, San Bernardino and San Diego counties.
“It makes for a good business model,” she said.
Last month, Adelphia paid $4.2 million for a 40,000-square-foot building on four acres at 3430 E. Miraloma Ave., about a block east of its existing hub at 3041 Miraloma, according to Scott Katcher, a broker with Studley Inc. who worked on the deal.
The building is nearly four times the size of Adelphia’s current space, which the company plans to leave early next year.
Adelphia plans to exit its facility at 185 Warner Ave. in Santa Ana by the year’s end, moving 120 field technicians to Anaheim in the next two months. A remaining 80 administrative workers from Santa Ana are getting shifted to other smaller offices throughout the area, Contos said.
The company should employ about 425 people locally by the time it moves to the new building, Contos said. She didn’t say if layoffs were being considered.
The consolidation is a sign that Greenwood Village, Colo.-based Adelphia is tidying up to get ready for sale.
Adelphia filed for bankruptcy protection in 2002 and agreed in April to put itself up for sale to repay creditors. Adelphia founder John Rigas and son Timothy were convicted in July of looting the company and misleading investors about its financial condition.
The cable operator, which boasts more than 5.4 million subscribers for its national network, has asked potential bidders to express interest by the end of the month.
Last month the company divided its cable systems into seven clusters that could be sold in the hopes of making an auction more affordable for a greater number of bidders.
Philadelphia-based Comcast has said it is in talks with Time Warner of New York about a joint bid for Adelphia. Reports last week said Adelphia could require the two companies to bid separately.
The North County network is but part of a larger system of 1.4 million subscribers in Adelphia’s Southern California business. The regional operation is considered one of its most valuable assets and could fetch the most in a bidding war, according to observers.
Many cities, including Anaheim, Fullerton, Newport Beach, Santa Ana and Yorba Linda, are in various stages of renegotiating their franchise pacts with Adelphia.
Gerardo Mouet, executive director of Santa Ana’s parks and recreation department, the city agency responsible for overseeing the cable franchise, said he is worried about the loss of local jobs. But he said he’s more concerned about getting quality service from Adelphia or any successor company.
“Keeping jobs in Santa Ana is important, but my primary concern is whether cable subscribers have good service,” said Mouet of the city’s 22,243 subscribers as of last month.
The biggest complaint expressed by city officials and cable observers regarding Adelphia has been its struggle to keep up quality service, though many said things are improving.
In Newport Beach, the city has franchises with Adelphia,18,000 subscribers,and Atlanta-based Cox Communications Inc., which serves 10,000 Newport homes along with much of South County.
City officials have begun informal talks to update old franchise pacts that contain contract language from nearly 40 years ago, said Marilee Jackson, a Newport Beach spokeswoman.
“Our biggest concern is customer service,” she said.
Many cities gripe about cable rates that have been raised twice since 2003.
“It seems like annual price increases come every fall,” said Katherine Bowers, a cable consultant for Santa Ana.
Bill Marticorena, an attorney who runs the telecommunications practice for Rutan & Tucker LLP in Costa Mesa and who advises OC cities on cable issues, views a change in ownership for Adelphia as inevitable and even good.
“In general, there has been a lack of capital infusion for many years, there is a tremendous amount of turnover in personnel, rates in many communities have gone up in double digits, and they are getting bludgeoned by competition from satellite providers,” Marticorena said. “They’ve got lots of mountains to climb.”
Subscription figures provided by the cities currently in various stages of renegotiating their pacts show single-digit declines in cable subscriptions since 2000.
Most of the business is getting taken by satellite TV providers such as Directv Group Inc. and Echostar Communications Corp.’s Dish Network.
Chris Meyer, city manager of Fullerton, said his city extended its franchise with Adelphia through early 2006 with the hopes that Adelphia’s future would be more certain at that time.
“I wouldn’t mind having Comcast back again,” he said.
Comcast ran most North County systems before selling the regional cluster to Adelphia in 1999.
“It’s very difficult to negotiate with a bankrupt company,” Meyer said.
Adelphia has made strides to boost service and reverse its decline in subscribers, Contos said.
Phone service has suffered because demand picked up for a huge round of product launches that included on-demand movies, digital video recorders and speedier Internet connections, she said.
Besides the planned Anaheim move, Contos said Adelphia has hired more customer service workers at its call center in Ontario, and is getting ready to roll out an ambitious automated phone system to help customers pay bills or order pay-for-view television programs.
“Things have improved, but there are still some challenges,” Contos said.
