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With CLEC in Okla., Cox Takes Care of Business

Cox Communications made a move to raise its business-services profile in the Sooner State last week, cutting a deal to acquire Tulsa, Okla.-based competitive local-exchange carrier EasyTEL and add capacity and customers to its already robust commercial network.

Financial terms were not disclosed, but Cox said the deal would help it expand its metropolitan fiber network and improve its ability to serve commercial customers in the area. Cox said it would emerge from the deal with a network in Tulsa that covers about 95,000 fiber route miles and connects 21,000 on-network buildings.

“Cox Business and EasyTEL share the same philosophy on customer experience and technology innovation,” Percy Kirk, general manager of Cox Communications Central Region, said in a statement. “We are thrilled to combine our robust fiber networks and strong commitment to service excellence to help Tulsa businesses grow and succeed with speed, reliability and the most advanced set of business services in Oklahoma.”

New York-based cable investment banker Waller Capital advised Cox on the transaction.

Cox has been an aggressive player in the business services market for years — it began providing commercial high-speed data service in Hampton Roads, Va., in 1997 and in 2012 generated revenue of $1.2 billion for the company, up 20% from the prior year.

The Atlanta-based MSO had predicted that it would reach the $2 billion revenue milestone for the unit by 2016.

Cox Business provides service to about 300,000 small and regional business across its footprint and, according to independent research house Vertical Systems Group, is one of the largest providers of business Ethernet services in the country.

Last year, the Federal Communications Commission agreed to forebear a rule that made it extraordinarily difficult for cable operators to buy CLECs as they looked to flesh out businessservices strategies. They can now do so without having to cut through a web of red tape, establishing harmony with a rule that already allowed CLECs to acquire cable operators in the same local market without enduring massive regulatory headaches.

Before the FCC streamlined that rule, Comcast had to go through the trouble of securing a waiver before it could complete its acquisition of Chicago-area CLEC Cimco Communications in 2010.

Mike Farrell contributed to this report.