pieces are in place and the battle lines have been drawn. Three months after receiving a unanimous vote for a franchising contract from the San Diego City Council, the Denver-based telecommunications firm Western Integrated Networks (WIN) is moving quickly toward opening shop here.
Western’s main competition, Cox Communications and Time Warner, still will offer stiff competition, and Time Warner Director of Public Affairs Dan Ballister believes his company can keep up with the newest Joneses. “We finished our fiber optic upgrade in 1997,” Ballister said, “and we spent $120 million just upgrading our system.” Neither Ballister, Cox Vice President of Programming and Communications Dan Novak nor WIN Regional Vice President and General Manager for San Diego Barbara Warden conceded the county to the other. “We have, we believe, one of the best two-way networks in the country,” Ballister said. “People from all over the world come here to see what we have. Between Time Warner Cable and our sister company in town, Time Warner Telecom, we pretty much offer everything they (WIN) are talking about.” San Diego’s big three see the upcoming battle for cable, Internet and video supremacy in the county as a positive for all three companies. “When the Telecommunications Act was passed in ’94, there were two real things in mind,” Novak said. “One was to foster private investment in advanced fiber optic networks to encourage competition. The other was to provide a choice to consumers in voice, video and data. That piece of legislation really had in mind what is now coming to fruition in the industry.”
Added Ballister, “Any competition is going to be something we have to look at seriously. It’s not being skeptical, but it’s wondering if they’re (WIN) going to be able to pull this off. It’s an enormous investment.”
Cable Services To Start Within A Year
WIN, formed in October 1999, has spent more than $5 million to get started in San Diego. WIN Senior Vice President Bill Mahon said customers will begin to get cable services in nine to 12 months. WIN is banking on its ability to offer state-of-the-art technology while rivals Cox and Time Warner will have to spend millions just to catch up. “I think Cox and Time Warner are both good operations,” Mahon said. “Our technology is much further advanced. They have both done upgrades and we are on the cutting edge of technology. We will be offering an awfully strong channel lineup on the cable side as well as local long-distance and Internet services.” For the first time in San Diego, consumers will have the opportunity to choose their cable company. Unlike Cox or Time Warner, which are limited in service area, WIN will be able to service the entire San Diego County. “We’re the only company that has franchising for the entire city,” said J.C. Thomas, in charge of franchising and governmental relations for WIN.
Cox’s Novak isn’t concerned.
Cox Invests $500M In Phone Upgrades
“On the telephone front in San Diego we invested $500 million to upgrade our fiber optics to be able to compete,” he said. “Having other companies come in and invest in a fiber optic network clearly is good for consumers. Southern California is about as competitive as anyplace in the country. Competition is good for the customers. We’re ready for competition.
“What’s encouraging is that this has fostered innovation. It’s very good for the consumer.”
Warden agrees, but with a slightly different twist. “The incumbent operations (Cox and Time Warner) have to rebuild major parts of their network to offer high-speed data and service packages,” Warden said. “They know that WIN will put $100 million per year into San Diego in infrastructure and operations. For them to compete, they’re going to have to do major (work).”
Limited Options In Set Boundaries
Currently, there is no choice for cable subscribers in San Diego County. Freeways and borders dictate which companies operate where. With WIN’s immigration to the county, nearly every cable customer will have a choice as to which company will serve them best. “In the case of San Diego, they’ll have a choice of a minimum of two (cable providers) , WIN or Time Warner, or WIN or Cox,” Mahon said. He added that attempts at franchising in the city were done “to create some level of competition of companies in the same city.” But while WIN aims to bring the most recent technology to its customers from day one, Novak remains upbeat about Cox’s ability to satisfy current customers. “We have invested heavily in customer services,” he said. “We know that’s how you really differentiate yourself. But at the end of the day, people want great quality service. That’s what we hang our hat on and that’s what we’ve hung our hat on for many years. One thing that helps us compete with others is the people. We know it’s all about our people.”
Are Cox executives worried about WIN’s coverage of the entire county seemingly at Cox’s and Time Warner’s expense?
“Competition makes all organizations better,” Novak said. “You think about things differently. We’ve been on the same course focused on services and quality for so many years, we don’t think that a major course change is what we need to do. We’ve built loyal customers.
“I don’t think (we need to do anything new). We’ve always been an innovator. We’re very involved in the community. Our employees are very involved in the community. Over the long haul, it’s about the relationship (between Cox and our customers). “It’s about providing great value to the customers and great service. We believe our employees are our biggest competitive edge. The product is there. The reliability is there. At the end of the day, that’s going to make a big difference on who the customer gets their telephone and other services from.”
The main advantages for Cox and Time Warner will be their longevity, their ties to the community, and the fact that they’ve firmly entrenched themselves as the top two incumbent cable providers in the county. It will be WIN’s job to take that away from them.
WIN is still in the shopping stages for building space and employees, another area where Cox and Time Warner have a distinct advantage. “We’re looking at sites now for large building projects in San Diego,” said WIN’s Warden, whose main job is to recruit, hire and train a local work force expected to grow to about 500 people. “We’ve been out with Realtors already looking for property in the 100,000-square-foot range.”
Job Applications Being Accepted
Warden also said that applications have been coming into her office on a daily basis, and that WIN has done no head-hunting. “We’re just receiving applications at the moment,” she said. “All the applications are coming in to us. We haven’t put the feelers out.” While any start-up job, from a newspaper to a cable company, is risky business, Warden insists this venture will work in San Diego. “We feel real comfortable,” she said. “We did our homework on this. We feel this will be a real winner. It’s exciting. (The telecommunications market) moves real fast. We know the idea of having high-speed Internet and cable is a big deal in San Diego. Having the choice of cable, that’s something new to cable consumers. That’s what’s exciting is that they (consumers) have that choice.”
Besides San Diego, WIN has started service in San Antonio and Austin, Texas, in Sacramento and just recently got approval for a suburb of Portland, Ore. “The cable commissioner thanked WIN for coming to their city and bringing competition,” Thomas said of the Oregon deal. “They’ve been waiting two years for this.”
New Technology For City Subscribers
Warden, though, is excited about the possibilities in San Diego. “This will be state of the art to every home,” she said. “Fiber to the curb, fiber to the home. It’ll be technology that is brand new to the city of San Diego. It will also give people a choice that they don’t have today. It will be a full-service provider with high-speed Internet, cable, voice, video and data. “We’re committed to customer service. I really like that aspect of it. When I talked with this company, before even talking to me about working for them, they told me they have a commitment to diversity.”
Margy is a free-lance writer for the San Diego Business Journal.
