Verizon, Cablevision Face Off Over Cable Service (1 Viewer)


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Stand against retrans!!!
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Apr 18, 2005
DeKalb County, AL
Dec. 29--Attempting a major expansion a quarter-century ago, Cablevision Systems Corp. won approval to wire homes in Huntington Town, sparking a battle with the incumbent cable provider, Huntington TV Cable Corp.

Cablevision won, and ultimately bought Huntington TV.

How times have changed.

Now, Cablevision is the incumbent facing the challenge, but it is battling a much larger competitor -- Verizon Communications, which on Dec. 14 won the right from the state Public Service Commission to offer cable service to the Village of Massapequa Park.

Verizon said it's not satisfied with just one village and that it plans to pursue launching cable service in 30 other Long Island communities.

In a way, Verizon is evening the score.

A few years ago, Cablevision offered high-speed Internet and telephone services over its cable lines. Now, Verizon is offering services, including television, over fiber-optic networks.

One man, James Nishimura, 75, could gloat over the twist of fate.

Nishimura, who lives in leafy Laurel Hollow on Nassau County's North Shore, was the owner and president of the now-defunct Huntington TV.

But Nishimura is not the kind to gloat, he said in an interview at his spacious home a few days ago.

"It was not a personal thing," Nishimura said of the decades-ago battle between Cablevision and Huntington TV.

Nishimura never blamed Cablevision or its founder, Charles F. Dolan, for the woes Huntington TV suffered. One time during the competition, which lasted several years, many of Huntington TV's wires were torn down. Nishimura said only that Cablevision's contractors sometimes damaged Huntington TV's wiring; no one was ever charged with wrongdoing.

Cablevision won over viewers, Nishimura said, by refusing to allow Huntington TV the rights to show sports programming it controlled. Within a year, Huntington TV lost about 4,000 of its 18,000 subscribers.

"Cablevision had programming unique to the industry," Nishimura said. "We had a horrible time getting programming. They wouldn't sell to us. The cable industry survives on programming."

Nishimura fought hard in trying to ward off Cablevision. He turned to the courts and the state cable commission with a barrage of charges, including restraint of trade and monopolistic practices.

The legal challenges resulted only in a mild rebuke against Cablevision from the cable commission, which said that Cablevision violated its agreement with Huntington town by soliciting Nishimura's customers before wiring all unserviced areas.

An antitrust case Nishimura filed against Cablevision was settled out of court, just before Cablevision bought Huntington TV for an undisclosed sum.

Looking back, Nishimura said, his attempt to fight Cablevision might have been "somewhat naive." He thought his background would give him an advantage in any competition.

In the 1960s, he said, he had started several cable operations in Savannah, Ga., that were successful. He also worked as the head of systems engineering for a Philadelphia-based electronics company and was an engineering executive for a French company with a division in Manhattan. Nishimura believed he could bring cable to Long Island, but Cablevision proved too much the 800-pound gorilla.

Cablevision had about 200,000 customers -- more than 11 times the number of Huntington TV subscribers.

But Cablevision will have a fight on its hands with Verizon on the scene, Nishimura said. Cablevision is a $5-billion company with 3 million customers in the metropolitan area. Verizon's sales last year were $71 billion, and the company has 49.3 million customers nationwide.

"They are going to have a market share," Nishimura said. "But Cablevision will survive because they're going to be very innovative. They're not going to go away."

Joe Bonner, who follows the cable television industry for Argus Research Corp. in Manhattan, said Cablevision is going to have to watch its back with Verizon on the scene.

"Clearly, Verizon is making a push with video and New York is a prime market for them," Bonner said yesterday. "That's certainly a threat to Cablevision." But, he said, Verizon will have to show that it can offer lower rates and superior programming against the deeply entrenched Cablevision.

"Verizon has an uphill battle," Bonner said. But, if he were running Cablevision these days, Bonner said, "I'd be worried."

Jim Maiella, a Cablevision spokesman, said the company anticipates competition in the months and years ahead, and not just from Verizon but from satellite dish providers as well.

"I would say that Cablevision has been extremely successful in a market that is already highly competitive," Maiella said. "We take all competitors very seriously, but we're confident in the value of our services."

Sharon Cohen-Hagar, a Verizon spokeswoman, said the company will be offering Long Islanders "a choice of a new provider. Sometimes, that in and of itself is a great thing. There may be people who want to make a change." Cohen-Hagar said she is unable at this point to discuss rates or programming.

For his part, Nishimura said, he is happy to see Verizon enter the region because the ultimate benefactor will be the cable-watching public as competition forces lower cable rates.

"It's a great thing," Nishimura said of the battle shaping up between the two titans. "The consumer is going to be the big winner."

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