Saturday, May 13, 2006 | 7:08 a.m.
Cox Communications, the Las Vegas Valley's cable provider, is facing limited residential cable competition from a company that provides video services to casinos.
Over Cox's objections, the Henderson city attorney's office has permitted Kelley Technologies to wire Tuscany Village, a 1,900-home community under construction near Lake Las Vegas.
It's the first time Cox will go head-to-head with another cable provider in servicing a valley subdivision. Cox wired Tuscany late last year and is providing service.
Kelley, which has given free satellite service to Tuscany residents since August, will phase in its cable service over the summer. Company officials had expected approval last November, but Cox asked Henderson to further review Kelley's request. At that time, Kelley officials accused Cox of stalling to get a head start in the competition.
"We believe Cox (officials) did what they felt they had to do from a business perspective, but at this point we feel pretty good that we get to move forward," Kelley General Manager John White said this week. "It's a big relief."
He said the company does not plan to provide cable TV in other subdivisions. Kelley's primary business is designing and building television and surveillance systems for numerous Las Vegas hotels. It also resells programming to hotels, like a cable provider.
"We don't see ourselves as competition with Cox on any other level than Tuscany," White said. "They see us as a threat, but we are a little fish. I think they need to be more worried about phone companies competing against them."
Kelley serves more than 200 Tuscany customers, and White said that there have been only a handful of disconnections since Cox began offering service. Residents of the gated community pay Kelley $24.50 a month for a basic package of 50 channels. Cox charges $42.49 a month for a package of more than 70 channels, and its customers also pay a 5 percent franchise-fee tax, which Cox remits to the city.
Cox hasn't ruled out appealing to the City Council, said Steve Schorr, vice president of public and government affairs. Cox welcomes competition, Schorr said, but he called it unfair for Kelley to carve out a prime section of the community without being required to service the entire city as Cox does.
"I have great problems with anybody cherry-picking the more affluent areas and not making a commitment to provide service for the entire community," he said. "We want a level playing field. No one should be hurt. Everyone should be treated the same."
In 2002 Kelley won a bid from then-developer Commerce Associates to wire Tuscany Village for cable television. Current developer Rhodes Homes assumed the contract, in which Kelley agreed to give a 15-percent discount to residents through the homeowners association and capped price increases at no more than 3 percent annually over the next 10 years.
Nevada law precludes any company from having an exclusive franchise, and there is no requirement for Kelley to wire the entire city, said Mark Backus, Henderson's franchise officer. After reviewing a possible franchise agreement with Kelley, Backus said he decided one wasn't needed because the 600-acre Tuscany development, including roads and right of way, are privately owned.
By not requiring the agreement, Backus estimates the city will lose about $60,000 a year in franchise taxes when Tuscany is fully developed. Cox pays Henderson more than $2.1 million a year from the franchise-fee tax.
Henderson Councilwoman Amanda Cyphers said that competition is good and she has no problems with the city attorney's office deciding the issue. "It takes the politics out of the process, which sometimes is not a bad thing."
The developer of Lake Las Vegas, also in Henderson, provides its own cable service to its residents. Cox officials said they have been shut out of wiring that community by the developer.
While many valley condominiums and apartments provide their own television service at the exclusion of Cox, there are no cable companies competing in subdivisions, said Roma Haynes, a Clark County management analyst.
Without talking to legal counsel, Haynes said that she didn't know whether Clark County would follow Henderson's lead with Tuscany if a similar request were made.
The key requirement, she said, is that everyone must be treated fairly.
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