Cox connects as Henderson delays cable decision

Wednesday, Feb. 15, 2006 | 12:33 p.m.

An upstart cable provider remains on the sideline in Henderson after Cox Communications stalled its bid to compete against the cable giant.

Three months after the Henderson City Council postponed a Nov. 15 vote to award a cable franchise to Las Vegas-based Kelley Technologies for Tuscany Village, the matter remains under review by city staff and hasn't been placed on a future agenda, according to Mark Backus, Henderson's franchise officer.

Before a council vote in November, Cox officials said they were caught off guard and asked for a delay to present a case on why the franchise shouldn't be awarded to Kelley.

That three-month delay has given Cox a chance to wire the private community under construction near Lake Las Vegas and offer cable service ahead of Kelley, according to Kelley General Manager John White. Although not blaming the city, he said he had hoped the review would be completed sooner.

"I think that was one of their strategies," White said of Cox. "This has been a stall tactic for them to do their construction and provide service. They could use that argument to residents that we still haven't secured a franchise and try to woo customers away from us."

Awaiting its franchise, Kelley paid to provide free satellite service to 164 of the 168 homes built in the 1,900-home master-planned community, White said.

"It has been very frustrating because we have put a strong emphasis on customer service," White said. "But we feel our hands are tied. It is difficult to have a second first impression."

Cox attorney John Moran Jr. said his client had a right to object to the franchise being awarded to Kelley, and he denied that Cox sought the delay to buy time to get its system running.

"I would say that is all hogwash," Moran said. "I would say simply that Nevada law requires a level playing field. We welcome any type of competition as long as it is a level playing field."

Cox submitted a letter to the city in mid-December saying Kelley submitted an incomplete and misleading application by not disclosing its September acquisition by Network Installation Corp. Cox maintains Kelley lacks the financial and technical qualifications to provide cable service.

Kelley has designed and built television and surveillance systems in many hotels, but this would be its first cable venture for area homes.

In its letter to Henderson, Cox even threatened not to extend service to Tuscany if Kelley was awarded a franchise. The cable giant said it sets a bad precedent to allow small cable operators to cherry-pick wealthier areas rather than serve the entire community as Cox does.

"I would expect that if Kelley was going to do the right thing, they would withdraw their application because it is not well grounded in the law and the facts," Moran said.

In a letter to the city two weeks ago, Kelley challenged Cox's claims and called the objections anti-competitive. Allowing companies such as Kelley creates healthy competition within the city and better serves the public, its attorney, Ed Garcia, said.

Kelley has already installed cable in Tuscany and needs only to install equipment to begin providing service. Garcia said Cox knew that Kelley sought the franchise at least two months before raising objections.

"This is typical of Cox," Garcia said. "For the most part, they are anti-competitive. They are throwing everything to try and derail and delay it, but it is futile. Kelley has complied with all of the requirements."

In 2002 then-developer Commerce Associates awarded Kelley a bid to wire the 600-acre Tuscany Village for cable. The developer is now Rhodes Homes, which assumed Commerce's contract. Kelley agreed to give a 15 percent discount to residents through the homeowners' association and lock in price increases over the next 10 years to the Consumer Price Index - with a cap of 3 percent.

Residents would pay $24.50 a month for a basic package of 50 channels that includes over-the-air networks and some national cable channels. The price is higher for other services, including high-speed Internet and security systems. Cox charges $39.99 a month for a package of more than 70 channels.

Rhodes Homes spokesman Bill Marion said the company will remain on the sidelines, calling it an issue between Cox, Kelley and Henderson.

"We are hoping the issue can be resolved because we know our residents want the service," Marion said.

Brian Wargo can be reached at 259-4011 or at wargo@lasvegassun.com.