Start-Up Eyes Overbuild in Buffalo
The city of Buffalo, N.Y., may be next in line to get a taste of the competition sweeping the cable industry.
Boston-based American Broadband Inc., a privately held start-up, recently inquired about a franchise for a projected $125 million cable network that would compete with the city's incumbent operator, Adelphia Communications Corp.
"They seem to be interested in getting in here and getting the lay of the land," said Thomas Tarapacki, director of the Buffalo Office of Telecommunications. "And we're also interested in getting information about them."
James W. Pitts, president of the Buffalo Common Council and a longtime cable critic, said ABI will make its case before his telecommunications committee.
"I think the council would explore a franchise with any company that is serious about bringing competition to Buffalo, especially in the cable market," Pitts said.
He added that one of the city's biggest concerns has been cable rates, which have jumped twice in the last year. "Competition would stem the tide, so to speak," he said.
Once thought to be economically unfeasible, cable overbuilds have become all the rage, fueled by skyrocketing acquisition costs.
"With the cost of acquisitions being what they are, it's cheaper to build. You have to make sure you capture enough of the market [to recoup your costs]," Tarapacki said.
ABI president Edward T. Holleran, a former vice president with Continental Cablevision Inc., said modern networks capable of delivering bundled packages of cable, Internet and phone services make cities like Buffalo as attractive as tier-one venues like New York City.
"It allows us to go in there and provide consumers with real choice," said Holleran, who helped launch the cable industry's first high-speed Internet-access service.
Holleran said ABI has also applied to the Federal Communications Commission for certification to build open-video systems in Maryland, Delaware, Ohio, Kentucky, Michigan, New York, Virginia, Georgia, North Carolina and Florida. FCC approval was expected by this week.
Holleran said ABI wants to build traditional cable networks, but it would use its OVS certification to immediately enter markets while it continues to negotiate with local franchising authorities.
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