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Times Warner turns off customers // DOING THE DISHES

Published Jul. 6, 2006

Cindy Khobani, the office manager at Hi-Tech Satellites in Spring Hill, is grateful for Time Warner Communications.

With good reason.

Since Jan. 1, when Time Warner added to its cable channel lineup and increased rates, her business has been brisk.

The company has sold 35 satellite systems, 40 percent more than the same time last year.

The systems include everything from the popular 18-inch dish network systems such as Direct TV to 7{-foot satellite dishes with 375 channels. The systems run from $688 to $1,400.

"Probably about nine out of every 10 of the satellite systems I've sold in the last month, people say that's the reason," Khobani said, referring to dissatisfaction with Time Warner.

"They don't want to have to pay for channels they don't like. That's why I'm selling a lot of systems, because they can choose the type of channels they want and pay for that."

Short of tuning out TV altogether, buying satellite dishes or off-air antennas is the only option for Time Warner's ruffled subscribers.

That's because Hernando, like most municipalities in the United States, does not have a competing cable service.

However, that could change by the turn of the century. Rapid developments in telecommunications technology and deregulation of the cable industry could provide county residents with many more cable options at cheaper rates.

Last year, Congress passed a broad telecommunications bill that deregulates cable and allows local phone companies to offer cable service to their customers.

"It looks like we (currently) have limited ability to entice additional cable companies. However, the future seems promising," said Deputy Hernando County Administrator Jennene Norman. "Technology changes will allow phone companies to provide cable."

It is already happening in the Tampa Bay area.

Last year, GTE launched its first cable service in Clearwater, where Time Warner dominates. Clearwater is among the nation's first markets in which two cable TV services are competing for business.

Competition already has affected the market.

Shortly after GTE began offering its service, Time Warner heightened promotions and added channels such as Disney and Turner Movie Classics to its standard package, said Jeff Harper, a spokesman for the city of Clearwater.

"As soon as that happened, they started offering dueling packages," Harper said.

GTE plans to spread its cable service throughout Pinellas County, western Pasco County and eventually Tampa.

What about Hernando?

"Right now, our priority is the successful construction and sale of service here in the initial launch area, which is Pinellas," said Richard Engwall, spokesman for GTE.

"Long-term, if it proves successful here, certainly we will be looking to other markets (in west-central Florida), but when that happens and what those markets will be is very speculative."

Atlanta-based BellSouth, which provides phone service in most of Hernando County, has a franchise to provide cable service in the competitive Orlando market and is negotiating similar agreements with Orange and Seminole counties.

"As the telecommunications law really starts getting implemented, you're going to see more and more customers wanting one-stop shopping for all their services, which means cable rates will come down," said Larry Strickler, regional manager for BellSouth.

Less densely populated Florida counties such as Hernando are farther down the road as possible sites for cable service, he said.

"The percent growth is higher there than Orlando, but the sheer numbers are not there," Strickler said.

Phone companies are not the only possible future cable providers.

Some utilities are venturing into the business, though Withlacoochee River Electric Cooperative, which provides electrical service in much of Hernando, is not among them.

"We're looking at installing some fiber-optic lines that would provide communications capabilities, but we don't currently have plans to enter the cable business," said Ernie Holzhauer, spokesman for the utility. "It's an area we looked at many years ago and decided that we could best serve our customers by being an effective electric utility."

The likelihood of another cable company coming to Hernando appears remote, too.

TCI, one of the cable giants in the United States, does not have immediate plans to expand into Hernando County, for instance.

"We're trying to focus on adding additional services to our customers that we're currently serving in the Pasco and Pinellas area right now," said TCI spokeswoman Cheryl Blanchette.

Kevin Hyman, vice president of operations for Time Warner's Hernando, Polk and Citrus district, said his company is ready for competition.

"We'd welcome that," he said.

On Thursday, Hernando County commissioners will conduct a public hearing on Time Warner's request to extend its local franchise agreement. Time Warner's previous 15-year franchise agreement expired last August. (The county has separate franchise agreements with three smaller cable companies, none of which compete with each other or with Time Warner.)

Seemingly, the county has little leverage in negotiations with Time Warner because no other companies are vying to provide cable service here. At least not yet.

And that's the catch.

Time Warner cannot afford to ignore the complaints of subscribers because of the likelihood it will face competition three to five years from now, and because it already faces limited competition from satellite TV, said Norman, the deputy county administrator.

"That's what we have going for us," Norman said.

_ Staff writer Lisa Buie and Times researcher Carolyn Hardnett contributed to this report, which contains information from Times files.