An FCC report on cable prices shows that rate increases are slower in communities that have cable competition. But that accounts for only 1 percent of communities nationwide. And none is in the Pittsburgh region. Rodney Akers, assistant director of Pittsburgh’s Department of General Services, said cable choice might take years to arrive in the Pittsburgh region – if it comes at all. Last year, Pittsburgh made attempts to woo RCN Corp., a startup cable company providing service in 11 communities in Delaware County. Residents in those communities are courted with special deals and rates, comparable to the battles long distance telephone companies wage for customers. But RCN said the Pittsburgh region’s population density was too low. The company was looking for large blocks of affluent neighborhoods, rather than scattered pockets. The presence of a cable competitor in the city might have made cable choice more likely to reach the suburbs, Akers said. Startup cable companies are often known as ‘overbuilders’ because they construct cable networks next to the established company. The new companies prefer to call themselves ‘competitive providers.’ They provide strictly digital transmission, a technology less expensive to build and install than the old analog service, although it costs more to the consumer. Dan Garfinkel, executive director of communications for AT&T Broadband Pittsburgh, said such companies also look for Internet users who are ready to set aside their dial-up modems in exchange for high-speed cable modem connections. ‘The business model of the overbuilders was predicated on high-speed data, but that hasn’t penetrated as quickly as many people thought it would,’ Garfinkel said. Garfinkel also said the Pittsburgh area market might be less profitable for competitors because of the large number of smaller municipalities. New companies would have to negotiate their initial contracts with dozens of communities to get a profitable chunk of the market, Garfinkel said. Large, established companies are better able to absorb such legal and administrative expenses, he said. Scott Burnside, senior vice president with RCN, said start-up cable companies don’t get much cooperation from local municipal officials who have control over construction permits and zoning. He said the state Public Utility Commission also could help generate cable competition by limiting the price new companies can be charged to use existing utility poles. This year, the situation for smaller providers is even worse because of the sagging economy. ‘The companies that had access to capital were emboldened to consider borrowing the capital that overbuilding required,’ Akers said. ‘But since then, many of them have gone bankrupt.’ Last year, Indianapolis signed contracts with two cable companies. Raleigh, N.C., Los Angeles and Boston have approved deals with startup cable companies to enter their markets, but some of those projects are now on hold. David Faulk can be reached at dfaulk@tribweb.com or (412) 380-5615.

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