By DAVID BORAKS
DavidsonNews.net

Competition is getting ready to expand for video, internet and telephone services, giving consumers more choices, new products and unfamiliar new lingo to learn. For the local cable systems and phone companies now going head-to-head, it means entering new business lines while trying to hold on to existing customers. Two of the latest signs of change:

MI-Connection workers install new high capacity cable lines on a Davidson street last month. (David Boraks photo)

• Local phone company AT&T announced Monday it would begin selling its U-verse video and high-speed internet services in Charlotte-region neighborhoods where it already offers telephone service, from Gastonia to Salisbury. A spokeswoman told DavidsonNews.net Monday U-verse won’t be available in all neighborhoods, but some parts of Davidson and Huntersville could get service soon.
• MI-Connection, the cable/internet system owned by the towns of Mooresville and Davidson, plans to begin selling a local phone service called True Voice in parts of its north Mecklenburg/south Iredell territory on Jan. 1. A MI-Connection spokeswoman tells DavidsonNews.net the service will be available first to about 3,800 households in Cornelius and Mooresville, where cable lines and equipment have already been upgraded. Customers in Davidson and other areas will get the new option by March, as a system-wide upgrade is completed.

AT&T and MI-Connection will be entering one another’s main businesses, and hoping that competitive prices, new technologies and a bundle of video, internet and telephone services will lure away customers from one another. MI-Connection’s telephone service also will challenge local phone provider Windstream in Mooresville and parts of Iredell County.

Meanwhile, they’ll also be up against other competitors also trying to break into the local market, or hoping to expand. Satellite TV services have won over many local video customers in recent years. And Time Warner Cable is now selling video, internet and phone services in parts of MI-Connection’s turf, including Mooresville and Mecklenburg County.

NO SURPRISE

Evan Webster, a Davidson Town Board member and chair of MI-Connection’s board, said Monday’s announcement by AT&T comes as no surprise. “We have a business plan and we’re going to stick to it. The business plan comprehended competition from Time Warner and AT&T,” he said. “We’re not surprised and we’re not unprepared.”

AT&T (formerly BellSouth) had announced in August 2007 that it planned to spend $350 million to upgrade its North Carolina telecommunications network

Davidson and Mooresville are in the midst of a $22.5 million upgrade to the system, which has about 16,000 cable TV customers in Cornelius, Davidson, Mooresville and surrounding areas. MI-Connection is installing new equipment at its Mooresville network center, adding a network “hub” in Davidson, and installing higher capacity cable and equipment throughout the network. The upgrades increase speed and capacity and will allow the company to speed up internet service, add TV channels and offer new products, such as local telephone.

Mooresville and Davidson bought the system a year ago for $59.7 million from Time Warner Cable, which was operating it temporarily while a federal judge sorted out the bankruptcy of former operator Adelphia Communications. The towns were able to buy the system because of a clause in their contracts with Adelphia that gave them right of refusal if the system were to come up for sale.

A consortium that initially also included Cornelius, Huntersville, Mecklenburg County and Troutman had discussed purchasing Adelphia’s entire Lake Norman area system. But the other towns eventually dropped out. Cornelius and Mecklenburg County transferred their subscribers to the new MI-Connection. Customers in other areas are now served by Time Warner.

INTERNET-BASED SERVICES

Both TV service from AT&T and phone service from MI-Connection will piggyback on the companies’ “internet protocol,” or IP networks – that is, networks using internet technology. For users, the services are in most ways comparable to what they get currently using traditional cable or telephone technologies.

With U-verse, AT&T delivers video programming over a newly upgraded high-speed network in its telephone service area. The company now has fiber-optic cable between “nodes” in each community, and from there programming travels over existing copper wires into your home.

Charlotte is the fourth market in AT&T’s Southeastern U.S. region to get U-verse. Others were Atlanta, Miami and Jacksonville, Fla.

Not all neighborhoods served by AT&T (formerly BellSouth) will be able to get the service, said Della Bowling, a Charlotte-based spokeswoman for AT&T. Consumers can check AT&T’s website – uverse.att.com – to see if their phone numbers qualify. We checked phone numbers in several Davidson neighborhoods and all came up as not available yet. Ms. Bowling said the service is available only in some parts of Davidson and Huntervsille now, though she did not say where.

“This is our initial launch, and we will continue to expand availability on an ongoing basis. That’s why we’re encouraging customers to check availability online. Our U-verse site will be regularly updated to reflect the latest service areas,” she said.

The service is based on a new, higher-speed internet access service than AT&T has previously offered. The TV service will be priced at $44 (with a receiver for one TV, digital video recorder and 70 channels) to $99 (one TV, DVR, 350 channels). Receivers for additional TVs are $5 a month. There’s no installation charge or long-term contract.

With the exception of one lower-level plan, all packages come with a digital TV recorder called “Total Home DVR” that allows recording of multiple programs at a time and can serve all TV sets in a home (those equipped with U-verse receivers). One other note: because of limits on the capacity of its network, U-verse currently allows viewing high definition channels on only TV set at a time.

Customers also can get five levels of internet access that are faster than the company’s existing DSL connections. They range in price from an extra $33 a month for a 1.5 megabits per second downstream/1 megabit per second upstream connection to an extra $65 a month for 18 mbps/1.5 mpbs. To get higher-speed internet, you must also buy the video service. (AT&T’s price sheet for U-verse lists 60 different prices for different programming levels and internet speeds.)

“The system allows AT&T the opportunity to continue to roll out advanced services to customers,” Ms. Bowling said.

AT&T’s price sheet for U-verse lists 60 different prices for different programming levels and internet speeds.

(Because AT&T doesn’t offer service in Mooresville, it is not expected to compete against MI-Connection there. The local phone company there is Windstream, which resells satellite TV from DISH network.)

MI-CONNECTION’S ‘TRIPLE PLAY’

In MI-Connection’s case, preparing to offer phone service also has required upgrading both wires and equipment in north Mecklenburg and south Iredell. MI-Connection’s upgrades will allow the system to offer what’s called “voice over IP,” or internet protocol. That’s a telephone service that sends and receives signals over an internet connection, rather than traditional telephone wires.

At an MI-Connection board meeting Thursday, Nov. 21, board members and executives of the system’s hired cable and internet operator, BVU Focus of Bristol, Va., discussed a proposed contract under which BVU would help MI-Connection add and manage telephone services. BVU already offers telephone service through its state-of-the-art cable network in Bristol.

MI-Connection also would have a separate contract with Level 3 Communications, a nationwide telecommunications company based in Colorado that specializes in fiber-optic-based communications and local telephone service. It owns the network that MI-Connection would use to link its internet-based telephone system to the public phone network.

Mr. Webster said those contracts should be signed within two weeks.

The addition of telephone service will give MI-Connection what system officials call a “triple play” – the ability to offer video, internet and telephone services to customers on a single bill. MI-Connection officials also say it will give them the lineup they need to compete against other telecommunications companies that are challenging them on their home turf, including Time-Warner Cable.

“We are starting to get some pressure from Time-Warner,” Stacey Bright of BVU told the MI-Connection board Thursday.

PRICING

True Voice telephone service will cost about $50 a month as a stand-alone service (if you don’t get cable or internet), $44 when bundled with one other service, or $35 if you buy all three services. Voice mail is $3.95 a month extra. It comes with long-distance and 17 other services that telephone companies typically charge extra for, such as caller ID and call forwarding.

And because it’s run over an internet-based network, features will include incoming caller ID on your TV screens and the ability to check voice mail on a computer.

MI-Connection also will sell phone service to small businesses, with up to 4 lines, for $70 per line. Voice mail and conferencing can be added.

Mr. Webster, the MI-Connection chair, said he is test-driving the phone service now at home. “It works well,” he said. It’s comparable to your wire-line phone, he added.

Mr. Webster thinks MI-Connection is well-positioned to withstand competition from the phone company or other cable companies.

“We’re prepared to meet ‘em both in the quality of the product we offer and also in the quality of the customer service,” he said.

PREVIOUS COVERAGE

Sept. 30, 2008, “MI-Connection reports first-year operating profit”