New cable TV company plugs into Truckee
July 14, 2004
Cable television subscribers in Truckee who have been waiting for high-end services like high-definition television and video-on-demand should like what they see when Cebridge Connections takes over USA Media’s cable franchise in town.Cebridge Connections is the cable television arm of Delaware-based Cequel III Communications I, LLC. According to company officials, it is currently the 11th largest cable television provider in the country with approximately 440,000 subscribers throughout West Virginia, Oklahoma, Missouri, Texas and other markets back east.Cebridge’s purchase of USA Media, LLC will give the company a presence on the West Coast, with franchises in Truckee, Lake of the Pines and Bishop, Calif. as well as others in Washington, Oregon and Idaho.”When we first looked at the USA Media acquisition we said, ‘Well, we have nothing else out here,'” said David Gilles, vice president of operations for Cebridge Connections. “But the assets, the communities of USA Media – particularly Truckee – really made us look twice, and looking at the communities and doing our research, we felt this would be a good acquisition to get us into the western part of the country.”According to Gilles, the Truckee franchise is the largest of the USA Media holdings and, due to recent upgrades performed by USA Media, is primed for the new services that Cebridge hopes to bring to the area.”USA Media just completed rebuilding the cable infrastructure, so from an outside-plant perspective, we’re in good shape,” Gilles said. “It was pretty easy to fall in love with the Truckee system,” he added. “It’s a great community, a vibrant community, a growing community, as well as a very nice cluster of customers in a single area, which will allow us to very quickly bring advanced products to the Truckee area.”Gilles estimates that Truckee cable subscribers will have access to HDTV programming by year end. Additional services include video-on-demand – a product that allows customers to download movies to a set-top box and then watch them as they would with a VCR – and cable telephone service planned for sometime next year.Gilles said that Cebridge sees the roll out of HDTV as a “must do” from a competitive standpoint, given the business environment that cable companies now find themselves in. High definition television provides a dramatically sharper picture on television sets equipped to display the higher-resolution programming. That’s important, Gilles said, because cable companies now face increasing pressure from providers like Dish Network and DIRECTV, which are quickly rolling out new products and services.Jim Faircloth, president and chief operating officer of USA Media, cited the pressure of competing providers and the difficulty the company faced in raising money to provide new services like HDTV as reasons for selling the franchise to Cebridge.Bringing in a company like Cebridge, which has a lot of experience rolling out new services in markets like those served by USA Media, just made the most sense for everyone involved, Faircloth said.”I am pleased to say that they’re a very progressive company, and I’m looking forward to having the transition take place over the next 30 days or so. I feel that of all the options we considered, this is the best for our communities, it’s the best for our employees, and it’s the best exit time for our shareholders.”However, the fate of USA Media’s employees was a topic of concern for Truckee Mayor Josh Susman at a July 15 Truckee Town Council meeting. Gilles assured the council that all USA Media employees would retain their jobs. If anything, Gilles said, Cebridge was looking to hire more technicians to serve the Truckee area and help with the installation of the new services it will offer.Potential competition for the PUD’s broadband systemOne consequence of the new services that Cebridge plans to offer Truckee cable subscribers is that the company will compete more directly with the planned Truckee Donner Public Utility District’s broadband utility. The district intends to offer high-speed Internet and data services as well as television programming and telephone service via a fiber-to-the-user network starting as early as April 2005.The district’s broadband plan was put into motion approximately four years ago because its board members and staff wanted to provide all members of the Truckee community with high-speed Internet service – something USA Media was not providing at the time.”I think when the PUD first envisioned their plan, at that time USA Media had not upgraded their plant,” Gilles said. “They were not offering as robust a channel lineup on the video side as they are today, nor were they offering high-speed data, which they’re now offering today.”Gilles said that with the financial resources his company can muster, “I would think [the TDPUD] would want to revisit their business plan…”Gilles also said that Cebridge will not worry about the potential for competition from the district.”We absolutely welcome the competition. We are very confident in our ability to compete in this industry,” he said. “I just hope the PUD understands that cable of three years ago is not cable today and it is a very competitive world.”Officers of Cequell III:The founders of Cequell III Communications I, LLC, the parent company of Cebridge Connections, which is taking over cable TV service in Truckee, have plenty of experience in the cable industry. Jerald Kent and Howard Wood worked for Cencom Cable Associates and helped build it into a top-20 cable operation before selling it. They then founded Charter Communications, which they sold to Paul Allen for $4.5 billion when the company had 1.3 million subscribers. Kent remained at Charter as president, helping it to grow to the fourth largest publicly traded broadband communications business in the country. Charter currently has almost 7 million customers and 14,000 employees in 40 states.Kent resigned as president and CEO of Charter in Sept. 2001 to start Cequel III with Wood and fellow founder Daniel Bergstein. Cebridge Connections, the cable television arm of Cequel III, currently has 440,000 customers nationwide.