Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, May 9, 1993 TAG: 9305080069
SECTION: BUSINESS PAGE: D-1 EDITION: METRO
SOURCE: MELANIE S. HATTER STAFF WRITER
DATELINE: LENGTH: Long
Gretchen Shine's first job at Cox was in Atlanta as customer service development director. During the mid-'80s there was a shift toward community involvement and higher standards of service throughout the industry.
And, Shine said, customer service will continue to be her focus even though her job in Roanoke includes the system's operations .
For cable operations, the job of customer service has gotten tougher, she said. Federal Communications Commission regulations, some issued last month and others just last week, mandate not only how cable companies set their rates and distribute programming but also how long they can take to answer their phones and how quickly they connect customers' homes and businesses.
"In order to have a higher penetration of cable, we had to really focus and perfect our service," Shine said. "It made good business sense and ethical sense."
The company always has paid attention to customer service issues, she said. In 1985, Cox was the first in its industry to have standards on serving customers.
However, it was a rising tide of criticism about cable pricing, alleged anticompetitive practices and shoddy customer service that led Congress to pass the 1992 Cable Act. The General Accounting Office, the investigative arm of Congress, estimated last year that rates for basic cable television service jumped 61 percent in the six years following the deregulation of the industry in 1984.
"There were some abusers of this unregulated environment," Shine said. But they were in the minority.
"We shudder at hearing stories" of other cable companies that have abused their positions in their communities, she said. "It's embarrassing."
In recent years, Cox has spent $11 million to upgrade its local facilities including installation of a telephone system that monitors how long a caller waits on the line. And over the next five years it will spend more than $16 million on a fiber-optics system and a new office building.
"They do a pretty good job," said Howard Musser, chairman of the Roanoke Valley Regional Cable Television Committee. Complaints he has received about Cox Cable are usually about increased rates.
"They may not technically be a monopoly but basically they are because there's no competition," Musser said. "Most people feel at the mercy" of the company.
Currently Cox charges $10.95 a month for 13-channel limited basic service, or 84 cents per channel. Expanded basic costs $21.11 a month for 31 channels, or 68 cents per channel. Premium services, such as HBO, cost $10.95 per month each but the rate per pay-channel decreased based on the number purchased.
In 1986 Cox rates were $11.50 for 27 channels or 43 cents per channel, and in 1991 it was $18.16 for 31 channels, or 59 cents per channel.
Cox said the increase in rates should be considered along with increases in the quality of programming and higher customer service standards. Also, the rates reflect that copyright and franchise fees are being passed directly to the customer. Previously those fees were absored by Cox.
A 10-year veteran of Atlanta-based Cox Communications Inc., the corporate parent of Cox Cable, Shine succeeded Bernard Langheim, who left the company at the end of last year under an early-retirement plan. Shine was vice president and general manager of Cox Cable South Carolina in Myrtle Beach for four years. She now heads an operation double that size - Roanoke has nearly 52,000 subscribers.
A native of Fort Worth, Texas, Shine was raised in Atlanta. She said she wants to make Roanoke her home.
In Myrtle Beach, Shine was active in community organizations including the Rotary Club and the Chamber of Commerce. Shine is "completely open to working with the school system." In South Carolina, she said, she participated in a high school program called Target 2000 that brought professionals into the classroom to help students prepare for the workplace.
During her four years at Cox in South Carolina, Shine was most proud of the company's visibility in the community. She was pleased to be able to give visibility to organizations, such as the fire departments, through public service announcements. Cox donated food to the Meals on Wheels program, which was "wheezing for money," she said.
Cox Cable Roanoke, saying it had outgrown its quarters on Salem Avenue near downtown Roanoke, last year announced plans to build a new administrative center in Roanoke County, on Fallowater Lane near Tanglewood Mall. Last summer, Cox purchased a five-acre site, paying about $100,000 an acre. Plans to break ground for a 26,000-square-foot building are expected early this summer.
The company's contract to build the new office stressed using local contractors, said Phil Ahlschlager, controller who was acting general manager before Shine arrived. Cox has hired contractor J.M. Turner & Co. to build the $3 million customer service center. Additionally, the Roanoke architectural firm of Hayes, Seay, Mattern and Mattern Inc. developed plans for the facility.
The new building was not part of the franchise negotiations with the city, Musser said. Depending on the outcome of recent FCC rulings, it could increase rates, he said. Part of the agreement, said Musser, was that nothing in the 12-year franchise, settled last year, would affect rates.
Ahlschlager said the recent FCC rulings on rate freezes and rollbacks won't hinder the completion of the new building, estimated by April 1994. Nor will the rulings affect a $12 million upgrade of the cable system, which was part of the franchise.
Cox, like other cable companies, was handed work sheets from the FCC last week to figure out if its rates comply with the rulings and if its revenues will be affected. On April 1, the FCC, acting under a congressional mandate, rolled back cable television rates by 10 percent and imposed an immediate freeze on all cable rates.
Ahlschlager said Cox is continuing to upgrade its system with fiber-optic cable, a project started last year and estimated to be completed by June 1994. The new system promises greater reliability, more channels - such as Home Team Sports, the Sci Fi Channel and the Cartoon Channel - better picture quality and the possibility of paying bills at a bank, he said. With all the projects Cox has under way, "we're really stretched," Ahlschlager said, "but we're up to the test."
The test included a legal dispute with a contractor that moved from Montana to work on the upgrade of Cox's system. The contractor's employees complained that it closed without warning and owed them two weeks pay. Boeck Telecommunications Inc. had worked for Cox companies in the past, Ahlschlager said.
Factors considered when choosing a contractor include price, reputation, quality of work and references, Ahlschlager said.
Cox claims it suffered delays and has lost more than $30,000 because it had to find another contractor to continue the job.
It's a problem that happens to everybody, Ahlschlager said. "It's the nature of the business." Anytime a contractor is hired, be it for yard work or cable drops, there's always the possibility of contractual problems arising, he said. "It probably does happen every day."
As it happened, Cox ended up owing Boeck more than $25,000 and handed it over to a court to let a judge decide how it should be split among Boeck and his creditors.
Another possible blow to Cox's revenue could come if local stations decide to charge the cable company to transmit their signals.
The FCC passed the "retransmission consent and must carry" ruling. The must carry provision requires cable TV systems to carry local over-the-air TV stations at the request of the broadcaster. Broadcasters have until June 17 to choose either the security of must-carry or retransmission consent, which allows the local TV station to negotiate a license fee to be carried by the cable system.
"We prefer they not charge us," Shine said.
"But," Ahlschlager added, "we'll do whatever is in the best interest of the valley."
Local TV stations aren't divulging what they're going to do, but James Deschepper, general manager at WSLS said his station has had a good relationship with Cox and expects it to continue.
It's not a situation where the cable companies and TV stations are at each other's throats, he said. "It's really a lot of people trying to figure its way."
Perhaps the most significant issue facing cable operators is the prospect of competition from telephone companies. In March, Rep. Rick Boucher, D-Abingdon, reintroduced a bill that would allow telephone companies to provide cable television service to their customers.
As the telephone companies prepare to begin offering cable service through their phone lines, Cox Cable isn't sitting idly by.
"We're flexing our muscles just like the telephone companies," Shine said.
by CNB