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Cox to Bundle Phone, Internet, TV Services for O.C. Renters

Communications: Venture represents the latest crossover of services among cable, telephone firms.

September 26, 1997|P.J. HUFFSTUTTER | TIMES STAFF WRITER

Launching one of the largest home telecommunications ventures ever, Cox Communications Thursday announced plans to offer phone service and Internet cable modems to 25,000 renters in the Irvine Apartment Communities.

While telephone and cable companies have spent the last year slowly invading each others' core business, Cox is among the first to launch a venture this large in Southern California.

Though this customer poaching is not new, the scope of Cox's announcement is unusual, said industry analyst Jeffrey Kagan, president of Kagan Telecom Associates in Atlanta.

"For so long, we've been talking about the crossover between the cable and the telephone industry. It's only now that we're starting to see some real products," Kagan said.

"Cable companies see the looming competition, and in order to survive, they're going to have to move into other service areas. This Cox agreement proves it," he said.

And analysts say that the Irvine Apartment Communities, the publicly traded business whose board of directors is dominated by the tech-friendly Irvine Co., serves as a perfect test market for new media consumer toys.

Cox's bundled "all-in-one" service will debut this fall at the Irvine firm's Newport Beach complex, The Colony at Fashion Island. The program will then roll out to the company's remaining 52 apartment complexes--about 15,000 units--in Orange County over the next two years.

Cox plans to offer its services to Irvine Apartment Communities' future projects--including the three units now being built in Newport, Tustin and Irvine.

Officials say that Cox Connex--the alliance formed for the project--is the largest of its kind within the cable industry. It will provide apartment renters with cable programming choices, local and long-distance phone services, and high-speed Internet access.

"Our residents have a high propensity for computer use, so we thought we'd be left behind if we didn't start offering these services," said Rick Lamprecht, president of the Irvine Ranch Division. "The services are bundled for convenience, but our residents will have the option of taking Cox or another telephone provider."

Cox's basic telephone service is $9.99 a month for one line. The company will offer its own long-distance service. Internet access costs $45 a month on top of basic cable charges for Cox cable TV subscribers, and $55 a month otherwise. There is an additional installation charge of $150.

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Thanks to Congress deregulating the telecommunications industry, cable and telephone companies are free to invade each other's territories. The stakes are high, especially for cable firms, which are also battling satellite TV services and a continuing lag in subscription growth.

To compete, local cable companies like Cox and Comcast Cablevision tempt their users with cable modems and high-speed Internet access.

But the number of consumers who use their cable company as an Internet service provider remains low--fewer than 100,000 nationwide--said Bruce Leichtman, an analyst with the Yankee Group in Boston.

Telecommunication firms, sensing the opportunity to grab new customers, have pounced on the cable market. GTE offers cable service in Cerritos and cable modems and interactive television service to about 18,000 subscribers in Thousand Oaks, Oxnard, Camarillo and the unincorporated areas of Ventura County.

Pacific Bell provides wireless cable service to residents in Orange and Los Angeles counties.

And San Diego-based SpectraNet offers telephone service, video conferencing and Internet access to its customers in Anaheim. The company plans to offer cable television services in the future, officials said.

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