Tuesday, January 24, 2006

"Cox plans $10M expansion"

Cox has decided to consolidate its Acadiana services into a new 10 million dollar building on Eraste Landry according to a story in this morning's Advertiser.

That's a good sign for Lafayette and gives concrete assurance that Cox intends to stay and compete. As a consolidation it does not, unfortunately, mean new jobs (and may mean the loss of a few--a usual "benefit" of a consolidation move) but putting capital into a new building is a positive sign of Cox's commitment.

Sharp readers will note that the Advertiser's reporter Claire Taylor had to go to Sharon Kleinpeter for quotes on the news--Sharon works out of Baton Rouge and we heard from her very occasionally during the referendum. But until the first of the year we had our own PR contact here in Lafayette.

That change is the consequence of Cox absorbing Lafayette into it's Baton Rouge unit. Cox shed a large chunk of its subscriber base, mostly in rural areas, to pay for taking itself private and to upgrade some of the remaining systems. The largest unit put on the block was the former Middle America Division which included Lafayette. Cox decided to keep Lafayette (much to my sorrow) and attached it to the Baton Rouge unit which had been in another division. The story is unclear on how much of the former local administrative staff remains.

The change makes the combined Baton Rouge-Lafayette market a large one: 300,000 subscribers in total stretching from the Florida parishes across the basin to the six parish re Acadiana region for which Lafayette is a hub. An article in the Advocate last Tuesday said that made it Cox's seventh-largest market. Being a smaller part of a larger unit as opposed to the biggest part of a smaller unit is probably a wash for Lafayette. But it introduces special new difficulties for Cox vis-a-vis responding to Lafayette's fiber initiative. It was embarrassing to raise Baton Rouge's rates while leaving Lafayette's unchanged. That will only get much worse as the competitive atmosphere in Lafayette intensifies and Cox is forced to contemplate both actually lowering rates to meet LUS' prices and upgrading its service to meet the challenge of higher broadband speeds. Sharon Kleinpeter might well find it awkward to announce rate hikes in Baton Rouge while announcing rate reductions in Lafayette. Presumably they'll arrange to have those press conferences and "media availability opportunities" on different days.

No comments: