Saturday, April 08, 2006

Cox Competes

It's been sinking in slowly lately that competition for Lafayette's telecom consumers has already begun. Not from BellSouth, which continues to pursue its weak sister solution of lawsuit and litigation, but from Cox. Cox is, on the evidence, settling down for the long grind of building a basis from which it can compete.

Cox is competing in at least three arenas: Price, Localism, and Technology. That they are shooting at all these ducks means that they have a pretty good sense of what is actually at stake and how Lafayette's consumers will actually make decisions. That's good news for the people of Lafayette--and cautionary news for LUS and the city.

Price is pretty obvious...they are competing on price now. The nice package price on the triple play that Cox is offering is an attempt to lock in as much of the triple play market as they can in advance of there being any truly competitive offering. Bear in mind that the newly formed "greater Louisiana" district of Cox, which includes both the Lafayette and Baton Rouge markets is probably unique amount large markets in that Cox is faced with two, local, fiber-based competitors. LUS threatens Lafayette in West and Eatel, in East Ascension Parish, threatens her in the southern reaches of metro Baton Rouge. Eatel, a locally owned telecom company is already offering fiber-optic cable TV service. (BellSouth doesn't compete with another telecom and so hasn't found an reason to sue.) Locking in as many subscribers as you can that are interested in a full triple play packages before your opponents actually get into the field is a good idea. That would be true in any market but it is particularly true in telecom where consumers are resistant to changing providers that are doing a decent job. Getting people to buy into a nice, cheap triple-play package is a chore, cable providers know, but getting them to switch once they've bought in will be even more difficult. Cox is willing to put out the effort to convince people now by cutting prices on attractive packages so as to face LUS (and EATel) with the more difficult task of converting satisfied customers later.

Cox is also working hard to shed its image, won early in the fiber fight, of a surly, out-of-touch bully. It has figured out that intimidation won't work in Lafayette and is nimble enough to chunk its old staff and bring in a set of new, non-threatening, and ethnically recognizable faces to run the local show. The new Baton Rouge/Lafayette division is headed by a black woman with regional experience, Jacqui Vines, and the local PR show is being fronted by the governor's daughter, Karmen Blanco. (Photo from the excellent Independent story on the new leadership; from left to right: Kleinpeter, Vines, Blanco.)

This doesn't mean that the old Cox still isn't there...they are showing no signs of joining with cities to block state-wide franchising even though such an alliance would benefit them (and demonstrate an authentic commitment to more than the symbols of localism). But it does mean that Lafayette will benefit by greater attention to local needs and the sponsorship of local events. And in that regard Cox has certainly been very aggressive (and BellSouth has been nowhere to be seen). I hear TechSouth had to make a new sponsorship category so that Cox could have parity or near parity with LUS on the roster of sponsors. At the Southwest Louisiana Black Chamber of Commerce meeting recently Cox was a major sponsor and Mayor Durel was the keynote speaker. After Joey's very conventional address Jacqui Vines, who was not on the program, spoke right after the mayor and touted the upcoming competition. The other sponsors had a ritual moment apiece near the end of the program. Lafayette Coming Together had a large table but LUS was not in evidence. Cox is definitely not intending to let LUS have the title of home-town favorite without some competition.

One of the interesting moments at the Black
Chamber meeting came when the guest were handed a favor that indicated that Cox wasn't going to cede precedence to LUS on technical matters either. Each attendee was handed a device labeled: "Cox, Lousiana's fiber connection." It was a small chinese-made device that sported a short bundle of LED lit pieces of plastic fiber. I have heard that Cox has shown up with these devices at other events. It is a lot of fun to wave around in a dimly lit room. Now a bundle of plastic fiber isn't broadband fiber-optics and Cox's fiber-optic backbone isn't fiber to the home either. But Cox has wisely conceded that the public understands that it wants fiber to the home and has decided that, in lieu of actually providing it, it can at least lay rhetorical claim to the technology.

We can, and should, conclude from all this that Cox is preparing to compete in Lafayette wherever it can and in some areas where it can't. All the signs and portents read the same way; Cox is girding for battle.

2 comments:

GumboFilé said...

I saw an acquaintance from Lake Charles on a current Cox TV commercial so apparently either the district or the offering includes Lake Charles as well.

David

John said...

David,

As I understand it, no...Vines says, and various articles too, say that Lafayette's district is being folded into Baton Rouge and the rest of Cox's holdings outside New Orlean's is being sold off ASAP. It's certainly on the block.

If you go to the website link I provided in the text you'll get to a link that will let you look at the various deals offered throughout Cox's areas. Lafayette used to be in what was known as "greater La." You'll see if root around that the deals for BR and Lafayette are the same but that NO and "Greater LA" have different pricing structures. Baton Rouge and Lafayette get better deals.

Why? You've seen my speculation above. Its' very conventional really: Competition. Fiber competition. Actual in Ascension and feared in Lafayette. I'm open to hearing other explanations but a different explanation would have to explain what else unifies BR and Laf and is not shared by other places.

(The cheapest Cox package in Greater LA is 84.95 for a double play (no phone))
http://www.cox.com/GreaterLouisiana/