In a milestone in the consolidation of the fractured Los Angeles cable television market, Tele-Communications Inc. and Century Communications will announce a partnership today that will create the largest provider of cable services in the region.
The deal will be announced at the Western Cable show in Anaheim, where more than 25,000 executives from across the country are gathered this week. Analysts predict that banding 250,000 of Tele-Communications' customers with Century's nearly 400,000 subscribers in the area could spur other alliances in Los Angeles, helping to speed the delivery over cable lines of the industry's Holy Grail--futuristic services such as high-speed Internet access, digital television with hundreds of channels and phone service.
Media One and Time Warner, now the region's top two cable operators, have talked about forming an alliance here, broadening a relationship under which Media One's parent, U.S. West, owns a 25% stake in most of the entertainment giant's cable systems.
Despite being the entertainment capital of the world, Los Angeles has lagged the nation's other urban hubs in rolling out advanced cable services.
Cable ownership in most major cities has concentrated over the last few years into the hands of one or two dominant providers, but Los Angeles has remained fragmented among more than 30 companies. Large contiguous "clusters" of customers are necessary to justify billions of dollars of equipment and upgrades needed to introduce new services.
Although seven cable companies serve 85% of the roughly 3 million customers in Los Angeles and Orange counties, more than 20 providers carve up the remaining subscribers. The largest company, Media One, with 575,000 customers, controls only 20% of the total base.
In contrast, two companies--Time Warner and Cablevision Systems--will soon divide about 3.6 million cable customers in the New York area, while Tele-Communications Inc. dominates San Francisco with 1.1 million subscribers.
The venture between Tele-Communications and Century will affect 750,000 cable subscribers in Los Angeles, Arcadia, Redlands, Ventura, Hemet, Sherman Oaks, Santa Monica and Anaheim.
"L.A. will never be dominated by one company because of its size, but eventually it will be divided into four chunks," predicted Leo Hindery, president of Tele-Communications, the nation's largest cable company, which is based in Englewood, Colo.
