Cox Communications President Pat Esser spoke with Light Reading TV about some of the hot topics affecting his business and cable and telecom this year. Here’s what he had to say about national video franchises being sought by AT&T, Verizon and other RBOCs:

“I’m not opposed to a national video franchise. In fact, I think if that’s what the country wants, that’s fine. All I ask is that it’s a level playing field and that we live under the same terms and conditions, one competitor versus another. And if they’re given a different franchise than I am, I (should) be able to opt in to that same franchise. I do caution, because we work with local cities so closely and have for so many years, that managing rights of way inside our markets is a complex issue and really a local issue. And I hope that the federal government, whatever they decide, respect the fact that the local cities have a responsibility to manage the rights of way and keep that intact. (They should) also think about the anti-competitive behavior, discriminatory behavior and red-lining that can occur in the marketplace, and put some safeguards in place so that doesn’t happen. Other than that, nothing about a national video franchise concerns me.”

On the ‘market share war’:
“The household is becoming a very complex place, and the average consumer wants help. At Cox, we see ourselves as a place where we can be a trusted provider. We use the term “Your Friend in the Digital Age.” I really mean that—a place you can call someone you trust to help solve those problems. While (the cable industry) has rolled out new products and services, we haven’t understood that we’re in a market share war. We need to think about that, day in and day out. Whether they currently get cable service from us today or not, we want to connect every home in our market to our network. So (we're investing) a lot more energy around making sure we maintain that position as a trusted provider and also how we maintain the growth rate we’ve seen the last five or 10 years and continue to grow market share.”

Click here for the full LRTV interview with Esser.

The massive telecom reform bill (technically, the “Communications, Consumer’s Choice, and Broadband Deployment Act”) made it through the Senate Commerce Committee yesterday on a 15-7 vote. Although it’s now out of committee, its prospects for making it to the Senate floor this session are uncertain. Committee Chairman Ted Stevens (R-Alaska) has indicated he doesn’t yet have the 60 votes necessary to defeat any filibuster attempts. The bill’s fate seems further complicated by the hot-button net neutrality issue. A net neutrality amendment co-sponsored by Olympia Snowe (R-Maine) and Byron Dorgan (D-N.D.) was defeated on an 11-11 tie. That amendment drew no shortage of emotional debate and theatrics, and the issue will certainly be re-introduced in one form or another when the bill is debated by the full Senate. Stevens acknowledged “massive disagreement” over the issue, and net neutrality proponent Ron Wyden (D-Ore.) announced on the Senate floor that he had placed a “procedural hold” on the bill because of its lack of net neutrality provisions.

Certainly, the wide-ranging issues addressed in the telecom bill greatly impact Cable—from national video franchising rules to telephone interconnection rights. But complete details of the bill remain murky at this point, since the final version hasn’t yet been made public. So, in the absence of exact language, it’s premature for us to speculate on its possible impact on Cox Communications and other telecom players should a similar version ultimately become law. But telecom reform, when enacted, definitely will bring changes, so stay tuned.

One last note of interest for Cable from the eventful day in D.C.: An a la carte amendment to the bill sponsored by John McCain (R-Ariz.) failed on a 20-2 vote, with only McCain and Snowe voting for it. The amendment called for the granting of regulatory relief for cable operators and other video providers if they offered channels a la carte.

Recent high school graduate Brytani Caipa was a delegate at last week’s Teen Summit on Internet Safety, sponsored by the National Center for Missing & Exploited Children (NCMEC) and Cox Communications. Here’s her recap from the event and thoughts on the role she and other teens can play in encouraging their peers to surf safely.

What a truly phenomenal experience! Having never participated in anything close to this incredible summit I had no idea what to expect. Between staying in a historical hotel (The Watergate) and meeting amazing people (from the head coordinators to the nine other fabulous teens), any expectations that had been sketched into my mind were truly blown away. Everything happened so fast that it wasn't until Friday on a tour of the Capitol that I was able to recognize just how incredible it was to be selected as one of these 10 teens. Being able to sit with nine other teens at a round-table discussion, giving insight that may potentially save children from the dangers of the Internet was absolutely remarkable. As a teenager, a graduate, an older sister, and a teacher, I know what an incredible tool the Internet is. I know how scary and dangerous the Internet can be; I also know how trusting and unaware kids are when using it. With the help of Cox Communications, John Walsh and Staca Urie (from NCMEC), we "teens" were able to come up with visionary and obvious ideas that could potentially save hundreds of children.

Upon returning from Washington D.C., I am doing everything in my power to spread the word of Internet safety. Whether it be through setting up interviews with my local news station or holding seminars for the parents of my brothers' soccer team, I hope that my work, along with the work of everyone that was in Washington D.C. those few days, will make a difference. (In the photo below, as part of the teens’ Capitol Hill tour following the summit, Brytani gives Rep. Shelley Berkley (D-NV) and summit host John Walsh a tour of the Internet. Photograph by Michael Temchine of US Newswire Photography.)

Any lingering doubts I may have had about the Internet savvy of the younger generation were obliterated quickly at this week's Teen Summit on Internet Safety, sponsored by the National Center for Missing & Exploited Children (NCMEC) and Cox Communications' Take Charge program in Washington, D.C. Ten teen leaders from communities on both coasts and points in between taught us adult observers a lot about the positive and negative aspects of Internet use, and then took their teaching tour to Capitol Hill, where they enlightened several members of Congress. On this day, the adults were definitely the students, and the teens the wise instructors. The day started with the teens chatting up children’s advocate and crime fighting icon John Walsh and Staca Urie of NCMEC. Ranging in age from a rising ninth grader to recent high school grads, every one of the teens said they’re aware of friends and peers who practice potentially risky behavior on the Internet, including meeting strangers in person. While they all felt that parents need to talk openly with their kids about the potential dangers, the students also advised that teens themselves can sometimes be the more credible sources of advice and direction in mentoring their friends on safer Internet use. Most of the teens use MySpace.com, the increasingly under-fire social networking site with more than 70 million users. With news sources reporting a $30 million lawsuit filed against MySpace on behalf of a 14-year-old girl who was allegedly raped by someone she met on MySpace, Walsh asked the teens how they’d operate the site if they controlled it. Most of them said they would set the minimum age for members at 16, even if it reduced revenue from advertisers targeting younger teens. But while it’s easy to focus on the negatives, the teens also said they and their friends have made many positive connections via MySpace and other social networking sites. One of the teens in is a band that he says reaches an audience they’d never get if it weren’t for their MySpace page, while another is a budding filmmaker who uses the Internet to post video journals. In meetings with members of Congress later in the day, the teens continued their instruction, including an online tour of how they use the Internet. We’ll post some scenes from the summit and the Hill visits below, and will be sharing some of the teens’ observations over the next few days.

In a June 17 Letter to the Editor of the Wall Street Journal, Oregon Senator Ron Wyden falsely accused Cox Communications of impeding our customers’ access to Craig’s List, an issue which has been widely discussed on this website. In response, Cox President Pat Esser submitted a Letter to the Editor of the Wall Street Journal, as well as Senator Wyden, and the members of the Senate Commerce and Judiciary committees, contained here.

To follow-up on a recent DST posting regarding the software glitch that slowed some customers' access to Craig's List; We're glad to see some blog postings by people that objectively assessed the situation and weighed in. Click here to get George Ou's two cents.

This reinforces the fact that there are a lot of smart people online that, when given the facts, verify their sources and draw logical conclusions. The trouble starts when people stop basing their conclusions on fact and instead start wild speculations and concoct conspiracy theories that do not have a basis in reality. Which brings us back to the network neutrality debate...

The story of a 16-year-old Michigan honor student who ran away to the Middle East to be with a man she met via MySpace.com is the latest cautionary tale about the potential dangers confronting teens on the Internet. While her story has gotten a lot of attention, she’s certainly not the only teen making risky choices. Research conducted by Cox Communications in partnership with the National Center for Missing & Exploited Children (NCMEC) found that 14% of teens have had face-to-face meetings with people they met on the Internet, while a third said they were considering such an encounter. The positive and negative ways teens use the Internet will be the focus of a Teen Summit on Internet Safety next week in D.C. Teens participating in the summit, sponsored by Cox’s Take Charge program and NCMEC and hosted by children’s advocate John Walsh, hail from Cox communities nationwide. They’ll discuss the indispensable uses of the Internet in their education and social lives, but also the dangers. They’ll also meet with elected officials from their home districts to educate them on their young constituents’ online use. The teens’ parents will be involved, too, participating in training on how families can communicate effectively about safer use of mass media. Some of the teens will also blog the event here on DST. Stay tuned.

The ongoing net neutrality debate seems to get more emotional daily, and it’s generating lots of press. The Wall Street Journal has a piece on it today (here’s the link, but you’ll need a WSJ subscription to access it). It highlights the net-driven grassroots campaigns—complete with homemade videos posted at YouTube.com and other sites—that are fueling the flames on one side of the issue. Certainly, that side (the side of net neutrality proponents) is making most of the noise and, frankly, getting a lot of attention for its efforts. “While several economists and telecom wonks have blogged in favor of the side of the phone and cable companies, they’re in the minority online,” according to the WSJ. Still, the article also mentions a critical point we’ve been stressing for some time: Net Neutrality is a complicated issue. There’s little agreement and clarity on an exact definition, making it a problematic issue to regulate. The WSJ mentions the Cox Communications/Craigslist issue we told you about last week: “Because of all the rhetoric, Net neutrality has become such a hot-button issue that some companies have found themselves the target of advocates who are quick to jump on any kink in Internet service as a new battlefield in the debate. Recently, bloggers sent out fiery missives against Cox Communications Inc. because some subscribers had trouble accessing online classifieds Web site Craigslist. Turns out it was an incompatibility problem between Craigslist and Cox’s security software that is being remedied.”

Also this week, Multichannel News’ Newsday offered an interesting take on the debate: “Go to Google and enter the words ‘net neutrality.’ See what pops up in the paid links section on the right? Senate testimony of NCTA president Kyle McSlarrow calling for a free-market approach to Internet regulation? Not exactly. Last week, Google’s top Washington lobbyist disclosed that the company had configured its search engine to return paid links that support Google’s position on net neutrality after the entry of certain key words.... Imagine the uproar on Capitol Hill if Comcast and Time Warner rigged their broadband networks so that computer screens defaulted to NCTA’s Web site for a sample of cable’s take on net neutrality legislation.”

In “Call the Cable Guy,” BusinessWeek highlights the trend of businesses switching their telecom services from their phone company to Cable—especially among small- and medium-size companies.

“Staying connected is crucial for Melanie McBride, owner of McBride Communications, a three-person public-relations company in Scottsdale, Ariz. In 2004, fed up with her phone company's lousy service, she switched her voice and data service to her cable provider, Cox Communications. McBride now pays about $200 a month for two phone lines, a fax line, a broadband Internet connection, and cable-TV service. She couldn't be happier. Before the switch, McBride felt she was getting lost in the shuffle. The flurry of telecom mergers didn't increase her confidence, either. Now she feels she's getting the white-glove treatment with Cox.”

As the article points out, Cox took the top spot in J.D. Power & Associates’ study of small and midsize businesses’ satisfaction with their data providers. Another cable company, Time Warner Cable, came in second, followed by RBOCs BellSouth and Verizon. The article attributes the Bells’ slide in popularity in part to consolidation. “At the same time that the larger companies were merging, many competitively priced phone providers that catered to smaller companies went out of business.” Click here for the full article, although you’ll need a BusinessWeek subscription to access the whole thing.

The Barton Bill (more precisely, the Communications Opportunity, Promotion, and Enhancement Act, sponsored by Rep. Joe Barton [R-Texas]) passed the House yesterday, 321 to 101. It grants RBOCs national franchises to offer video services. A network neutrality amendment offered by Rep. Edward Markey (D-Mass.) failed 152 to 269, although there are still net neutrality provisions in the legislation. For Cable, the Barton Bill is a mixed bag. As we’ve maintained all along, competition should be on a level playing field where providers are treated fairly, and the Barton Bill language is fairer than previous versions and would seem to encourage a field where all players are following the same rules at the same time. However, the net neutrality language in the current draft Senate bill sponsored by Sen. Ted Stevens (R-Alaska) takes more of a wait-and-see approach on regulating the Internet than the Barton Bill, directing the FCC to watch for problems and inform Congress if serious problems arise. Net neutrality means different things to different people, making it a problematic issue to regulate, and we believe that the current language in the Stevens bill strikes the right balance. Hearings on the Senate bill are expected to start as early as next week.

Here's the response to the Barton Bill from Kyle McSlarrow, President & CEO of the National Cable & Telecommunications Association.

Some Cox High Speed Internet customers are having a problem accessing Craig’s List. A few folks have mistaken it as a certain sign that Cox is blocking access to the site. That’s completely not the case. It’s a software issue related to how security software developed by Authentium interprets Craig’s List’s initial packet connections, resulting in a very slow connection for some users. It’s unfortunate, of course, but still only a software issue—not some plot to block this popular site. The issue is being addressed right now by Authentium. As John Sharp, Authentium’s CEO, told WebProNews, "It really isn't a ‘net neutrality’ issue at all - or a Cox, or even a Craigslist issue. We have a 100% ownership of the issue, and we're doing what we can to get the word out about the fix." Here's the full WebProNews article and interview with Sharp.

A USA Today article this week suggested that consumers’ increasing clamoring for high-definition TV content gives satellite and telephone companies an ever-growing advantage over Cable due to Cable’s bandwidth capacity constraints. The capacity issue is a real one, for sure, and the article made several accurate points. However, we reach a much different conclusion on the issue.

The reality of constrained capacity is not new. In fact, at Cox Communications, we’re well into a renewed focus on increasing bandwidth and are confident there will be more than enough to support growing demand for HDTV and for all the services pushed through our pipes into customers’ homes and businesses. We’re actively pursuing several “levers” to increase capacity, including switched digital broadcast technology, node splitting, utilizing 256 QAM and upgrading more of our networks to 860 MHz. We’ll be able to pull those and other levers, as needed, to meet demand.

Will there be short-term challenges? Yes. Will bandwidth building require money and intense effort? Definitely. But we firmly disagree that Cable is at a two- to three-year structural disadvantage to competitors on HDTV capacity.

Pat Esser, President, Cox Communications

What troubles me most about the competitive landscape today isn’t the Bells’ fiber-to-the-home promises or their deep discounting of DSL service. It’s not DirecTV’s launch of local high-definition TV channels. At Cox, we'll contend with this as we always have – by delivering high quality products, superior customer service and a great value proposition.

What troubles me most are the competitive battles over the rules of the game being waged in Washington D.C and state capitols. The very same Telecom Reform Act that paved a path for cable to enter the phone business also contained a road map for the Bells to deliver video. Did they forge ahead? Upgrade their networks? Ready the back office? And roll out new services?

No.

A decade later, the road is littered with aspirational Bell press releases promising a fiber optic utopia that doesn’t exist. Instead, their legions of lobbyists beat a path to Congress, state legislators and PUCs seeking regulatory roadblocks, sweetheart deals and short cuts to coast into the video business. Unfortunately, new laws that tilt the competitive playing field in favor of the Bells could lead American consumers barreling down a dead-end street.

The Bells are finally peeking out from behind their press releases and hitting the streets to upgrade their networks. It’s survival of the fittest today, and they need video to stay in the game.

Cox is ready to duke it out for customers and compete in the marketplace. We’ve been doing it successfully for years. I’m all for a less cumbersome, streamlined franchising process that reflects modern competitive realities. But it must apply immediately and evenly to everyone, regardless of the delivery platform. If Verizon, AT&T and others want video franchises, they should be granted – on the same terms as cable.

For the complete text of my speech at the Telecommunications Industry Association's GlobalComm in Chicago today, click here.

[For media coverage on the speech, click here.]

There are two ways to bring new services to consumers: The easy way (read: “shortcut”) and the cable way (read: “quality”). Chalk one up for cable because once again it has gone down the path to higher customer satisfaction. This time, it’s for our telephone service via VoIP technology. In a recent survey conducted by customer care software specialist SupportSoft Inc., VoIP customers of cable providers are almost twice as confident about the reliability of their VoIP service as the customers of specialized providers, which focus solely on VoIP delivery. And while you’re keeping score, cable wins again with the bundle. According to the study, 80 percent of cable VoIP customers surveyed said that they get VoIP and high-speed data in a bundle – another major advantage over “pure” VoIP companies. Perhaps mom was right: The shortcut doesn’t always pay off.