THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Friday, March 29, 1996 TAG: 9603290452
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY DAVE MAYFIELD, STAFF WRITER
LENGTH: Medium: 61 lines
In a move that positions it to be a cable-TV and telephone provider in seven of Hampton Roads' eight largest cities, Cox Communications Inc. announced Thursday that it will acquire the Time Warner cable operations in Hampton and Williamsburg.
It is the third acquisition of local cable systems announced by the Atlanta-based Cox since November 1994. The company completed the purchase of the Newport News cable system in January. It is in the process of also acquiring the Chesapeake system owned by Tele-Communications Inc.
Only a handful of small cable systems in Hampton Roads would be non-Cox properties after the latest deal - the largest being Falcon Cable's system in Suffolk. And Cox's Hampton Roads vice president and general manager, Franklin R. Bowers, left no doubt that his company has its eyes on that one and the others too.
``We're going to do whatever we can to broaden our footprint in the marketplace,'' he said. ``We'll talk to anybody.
Using so-called ``strategic clustering,'' cable-TV operators have been rapidly consolidating in every major U.S. metropolitan area, largely to gird for competition from larger telephone companies.
In Hampton Roads, Cox faces a major challenge from Bell Atlantic Corp., which plans to offer at least 100 video channels by the fourth quarter of this year via a ``wireless cable'' system in which it has purchased a large stake.
In addition, direct satellite TV services, backed by giants like AT&T Corp., have been aggressively pitching for customers.
Cox, like many cable operators, is planning an attack of its own on the telephone market. In Hampton Roads, it intends to compete with Bell Atlantic and GTE Corp. by using its cable system to introduce local phone services as soon as the end of this year.
Having as wide a reach as possible in the market is important to Cox's plan of being a multi-service telecommunications provider.
To strengthen its position locally, Cox has had to swap systems with other cable providers. To get the Hampton and Williamsburg systems and their combined 43,000 customers, Cox will give Time Warner its system in Myrtle Beach, S.C., along with a system near Waco, Texas, that it is still in the process of acquiring from another company. The trade makes sense for Time Warner because it is already strongly positioned in the coastal Carolinas and Waco markets.
To get TCI's Chesapeake system, Cox agreed to trade systems in Illinois, Iowa and Michigan, where TCI is more dominant.
Other terms of the latest deal weren't disclosed. Cox said it expects to complete the acquisition of the Hampton and Williamsburg systems by the third quarter, and the Chesapeake system by year's end.
When both pending purchases are complete, Cox will have more than 350,000 subscribers in Hampton Roads. The rest of the region's operators have fewer than 50,000 subscribers combined.
Time Warner and Cox are the nation's second-largest and fifth-largest U.S. cable operators, respectively. by CNB