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Gulfport may enter the cable business

The plan, at least two years off, is a response to residents' complaints that they pay more than St. Petersburg customers.


© St. Petersburg Times, published May 20, 2001

GULFPORT -- Dissatisfied with Time Warner's rates, city officials might form their own cable company for residents.

Gulfport cable customers are charged $5 to $11 more than St. Petersburg residents pay for the same service. St. Petersburg borders Gulfport's north and east sides.

The city is at least two years away from forming its own cable company, City Manager Bob Lee said, if the venture happens at all. He said he is unsure whether such a company would replace Time Warner's presence in Gulfport or simply compete with it.

"There's a possibility that we can be our own provider, and we can call them and say, "Come over here and cut it off. We're on our own,' " Mayor Michael Yakes said.

Gulfport blames its higher cable bills on Time Warner's lack of competition in the city. Time Warner competes with Verizon in St. Petersburg, where residents pay as little as $11 monthly for tier service, compared with the $21.92 Gulfport residents pay for the same service.

Time Warner is reluctant to blame the difference solely on the lack of competition. In a recent letter to Lee, Michael Robertson, Time Warner's vice president and general manager for Pinellas, said the only explanation his company could provide customers was this:

"Like most businesses, many factors are considered in determining prices," Robertson wrote. "Regardless of where you live in Pinellas County, we offer some of the lowest prices in the country for our services."

Lee was unimpressed. "If you read that language, you be the judge as to whether that's clear as to why there's a difference in the rates."

Time Warner officials did not return phone calls last week seeking comment.

Complaints about the disparity between Gulfport and St. Petersburg cable rates are nothing new. Yakes brought the issue to the forefront again this year during his campaign for re-election.

The issue came to a head in February, when the city manager called Time Warner to inquire about his home service.

According to Lee, a customer service representative first blamed Gulfport's higher rates on the Federal Communications Commission. When Lee questioned that explanation, she told him that Pinellas County sets the rates.

When he questioned that, the customer service representative told him the rates are set by the city of Gulfport. During the same phone call, a customer service supervisor told Lee that Gulfport's "city fathers" had not invited competition into their city.

The city has frequently heard from residents who said Time Warner blamed its rates on city government.

A series of letters and meetings followed Lee's phone conversation, and he said he grew increasingly frustrated as the cable company declined to be candid about its reasons for the rate disparity.

Lee met with company executives, hoping to convince them to be forthright with their customers. He said they presented him with a handful of options they could use to explain the price disparity to local users.

Finally, Lee recalled, they asked: "What do you think we ought to do?"

"I said, "Just tell the truth. Just tell them it's a corporate decision,' " Lee said. "That's not something they thought you could tell."

Gulfport has repeatedly invited Verizon to do business in the city but, according to Lee, a company representative recently said that Verizon is trying to get out of the cable business and is not interested in expanding.

A municipal cable company would operate as an enterprise fund, which means the city could not profit from the service but could charge customers enough to keep the system maintained.

For now, the city is investigating possibilities.

"Sometimes privatizing works," Lee said. "Sometimes it doesn't."

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