Las Vegas Sun

November 27, 2015

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CenturyLink challenges Cox Communications’ cable supremacy

When federal lawmakers changed the rules on telecommunications in the digital age, some traditions were shattered.

Cable companies started offering telephone service and phone companies got into TV.

Southern Nevada is one of the prime markets where traditional phone and cable companies have the ability to offer services in their competitors’ niches.

The latest example: CenturyLink, the region’s dominant telephone company, has unveiled Prism, which it calls “the most advanced television service available in Southern Nevada.”

The rollout is a significant incursion in the domain of Cox Communications, the dominant player in cable television here, where CenturyLink has dominated telephone service, Cox had cable TV and both had a piece of the Internet access market.

Passage of the Telecommunications Act of 1996 changed the old model and opened the door to a new realm of competition.

Cox, which began offering telephone service in 1997 and launched competition with CenturyLink’s predecessor Embarq in November 2005, is the seventh-largest telephone company in the United States with 3 million customers in nine markets. (It doesn’t break down its customer count by market.)

Cox is the third-largest cable company behind market leaders Comcast and Time Warner.

But in the past 18 months, CenturyLink has made a major investment in its core fiber network, data switches and components, leading to the launch of Prism.

“We had a trial run in April and worked on it for the rest of the year,” said Jeff Oberschelp, CenturyLink vice president and general manager in Nevada.

Prism provides access to more than 230 all-digital channels, as well as pay-per-view and video-on-demand.

Converged with Internet access driven by Microsoft software, Prism has many of the features offered by Cox. These include an interface with digital video recorders that can record up to four shows at once on a single DVR; access to photos and music on a computer; picture-in-picture channel surfing; access to hundreds of free and premium movies; on-screen Caller ID via CenturyLink’s phone system; and extras such as on-screen karaoke, video games, local gasoline prices, stock prices, daily recipes and other free applications.

The system has find-it-fast navigation with a database of live, recorded and video-on-demand presentations categorized by actor, title or genre, and access to 37 Spanish-language channels and 13 other foreign-language stations.

Prism offers automatic updates, and Oberschelp said the system would soon incorporate “mosaics” — the ability to watch one show while simultaneously monitoring video on other channels; remote DVR programming online or with a mobile device; and access to Microsoft Media Room 2.0 that provides the ability to log on to Facebook, YouTube and Picasa Photo Sharing.

Although CenturyLink plots to steal home entertainment customers from Cox, the cable company has been doing the same with its phone service.

Cox banks on its reputation for providing value and convenience with reliable equipment from a reputable supplier. In the past eight years, Cox’s residential telephone service has won top honors from J.D. Power and Associates for customer satisfaction.

Juergen Barbusca, Cox manager of communications, public and government affairs in Las Vegas, said his company has an advantage over CenturyLink with a more mature infrastructure.

“The way our system is constructed, we have services equally distributed everywhere in the valley,” Barbusca said. “Everybody in our footprint can get our highest advertised speeds.”

Oberschelp acknowledges that not every home in Southern Nevada would be able to get Prism, but said the network is growing every day.

Although Barbusca and Oberschelp won’t agree on which company has the better system, both concur that the consumer will be a big winner, thanks to the bundling of services. Both companies are encouraging customers to add their respective entertainment, high-speed Internet access and telephone products in a package, which are offered cheaper than what they would cost separately.

Cox and CenturyLink sell bundled packages with both offering all three services for $143 a month. Cox says customers can save $240 annually by buying the bundle instead of à la carte. CenturyLink says its customers would save $180 a year the same way.

“It’s less expensive for the consumer and a great value with all services on one bill,” Barbusca said. “There’s one point of contact. You can call one number and talk about all of your services.”

“What’s great for the consumer is that the choices available drive innovation,” Oberschelp said. “Our offerings are going to continue to get better.”

But there is some friction between the two companies. Oberschelp bristles when he sees a Cox Communications spot on television that implies that traditional phone company innovations involve the installation of a satellite dish.

“There’s no satellite dish involved,” he said. “It’s all state-of-the-art network technology.”

Oberschelp says his company can show the system off at the company’s eight retail offices throughout the valley.

“We’re anxious to compete, to differentiate ourselves from them,” he said. “We think we’ve built the better mousetrap.”

A version of this story appears in this week’s edition of In Business Las Vegas.

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