Cable TV rivalry emerges in area

Ted and Joni Breidenthal recently had about 100 of their neighbors over to their Overland Park house for a cookout. But they didn't supply the food, the drinks or the grill. That was handled by Everest Connections, the company that came to their area earlier this year offering cable TV, telephone and high-speed Internet service. "When I signed up with Everest, I was very happy with it," Joni Breidenthal said, as neighbors chatted in her driveway and kids raced through her yard. The family's cable, telephone and Internet bills used to total $113 a month. Now they pay $66 a month and get more cable channels and a faster Internet connection. What's more, Everest has credited their bill several times for referring others. Block by block, competition in cable and local telephone service finally is coming to the Kansas City area. Thousands of households in Lenexa, Shawnee and Overland Park have already made the switch to Everest, putting their faith in an upstart company that offers one low monthly bill and a homespun approach. When Everest finds enthusiastic customers, it asks them to serve as hosts for a block party. At the Breidenthals' house the company president, Kevin Anderson, and other representatives ate burgers and answered questions. A specially equipped motor home was parked in front, where the curious could surf the Web, watch TV or make phone calls on Everest's fiberoptic network. During an 18-month installation in Lenexa, Everest crews broke gas lines, cut cable and annoyed residents by digging up their yards. Yet the company now serves 45 percent of the homes passed by its network. Everest officials said they originally forecast a 35 percent share. The figure goes even higher, they said, in neighborhoods Everest has served for at least one year. Time Warner Cable officials said they welcomed the competition, and the area's dominant cable provider has responded by slashing its rates in communities served by Everest. Local-phone provider SBC Communications would like to follow suit but cannot, because it is a heavily regulated utility, according to its division chief in Kansas. For now, Everest is not much of a threat to the big companies. Its network will pass only 70,000 homes by year's end, or less than 10 percent of the metro area. The company is losing money and relies on Aquila Corp., the troubled energy giant that owns 90 percent of Everest, to keep it in business. Yet Everest has one asset that its competitors do not: a state-of-the-art wire that brings telephone, Internet and cable services into the home at an attractive price. Its fiberoptic network is similar to the ones Time Warner and Comcast Cable installed in the late 1990s. But Everest's $25 million nerve center in Lenexa is designed to provide all three services over one wire. Interviews with 13 current or former Time Warner Cable customers in the three communities served by Everest found price was the overriding reason for switching. Some families preferred to save money with one of Everest's "bundles" of voice, data and video services, starting at $49.95 per month. Others went with higher-end bundles with such extras as premium cable and faster Internet speeds for about what they paid for basic service from other providers. "It's a no-brainer when you look at it," said Suzanne Mohr. "I think we're going to save $50 a month." She and her husband, John, decided to switch at the Breidenthals' block party, where neighbors raved to them about Everest's prompt customer support. While Everest plans eventually to cover the entire Kansas City area, it has no current plans to build in any of the areas served by Comcast Cable. Like Time Warner, Comcast - which serves 100,000 households in Olathe and eastern Jackson County - offers both cable and high-speed Internet service. Everest has completed its network in Lenexa (excluding some apartments that are exclusively signed to Time Warner). Overland Park will be 75 percent complete by year's end, as will 65 percent of Shawnee. On the Missouri side, Everest installed fiber in the Red Bridge area last year and soon will expand to the Waldo and Brookside neighborhoods. Everest also serves Kearney through a system it acquired from another company. Doug Durst, who lives in the Forest Park neighborhood in Shawnee near Interstate 435, has called Everest on several occasions to ask when they are going to arrive in his area. The answer: very soon. "I'm happy with Time Warner Cable," said Durst. Still, he probably will switch to Everest to save $20 to $30 while getting an extra digital cable box. "That way, while the kids are watching 'Barney' in the basement, I can go upstairs and watch something," Durst said. Word appears to be spreading beyond Everest territory. Anderson said the volume of calls at the company's customer-service center had tripled in the past 60 days. Three-fourths of the calls are from people who live outside the areas served by Everest, he said. When callers learn that it may take several years for Everest crews to make it to their communities, "they're not very happy," Anderson said. "People are very passionate about their ability to have a choice." Lezlee Bryan wants to switch to Everest but has been told she cannot. Yet she lives in Lenexa, the heart of Everest country, in an apartment at the Oaks at Mill Creek. A couple of years ago Bryan's landlord signed a long-term exclusive marketing agreement with Time Warner Cable. That means Everest representatives cannot knock on doors of the 119-unit complex, or even hold a barbecue in the parking lot. Everest decided not to wire the Oaks. Later, when Time Warner sent "retention representatives" throughout Lenexa offering to knock as much as $50 off the monthly bills of customers who stayed with the cable company, Bryan's complex was skipped. No one offered to cut her cable bill. "If I think about it a little too long, I get upset," Bryan said. The long haul Can Everest keep its prices this low over the long haul? Time Warner officials are skeptical, but Anderson said the company's highly efficient network was built from the ground up to handle video, voice and data. "One spot, three services," Anderson said. "It's not rocket science. We're achieving economies of scale." Everest is not for everybody. Time Warner Cable has a decisive content advantage over Everest - if you're willing to pay for it. Its basic tier includes Metro Sports and Metro Weather, which are owned by Time Warner Cable and off-limits to competitors. Time Warner's digital tier costs more but offers more channels. Time Warner has special packages for high-definition TV, international and Spanish-language channels; Everest does not. Time Warner's customer satisfaction surveys show strong support of the company's services, said Carol Rothwell, vice president of public affairs. If there is unhappiness with Time Warner, "our retention people are not finding that," Rothwell said. Time Warner plans to add local telephone to its cable and high-speed Internet services in the future. SBC offers the three services Everest does, but it currently does not bundle them. Its prices are higher than Everest's, because SBC must pay outside vendors to supply some services. Its video offering is the Dish Network satellite system, owned by EchoStar Communications Corp., and its DSL Internet service is a partnership with Yahoo. SBC is at a disadvantage, said Randy Tomlin, its Kansas president, because its prices are fixed by state utility boards, so it cannot offer discounts that will compete with Everest. Yet rival local-phone providers, including Everest, can lease SBC's network for less than it costs the phone company to maintain the network. SBC is lobbying to have those regulations changed. It also has launched a PR offensive: In a new TV commercial, SBC refers to its competitors as "parasites" who leech service from its network. In an interview, however, Tomlin made an exception for Everest, complimenting the company for investing in infrastructure instead of relying solely on SBC. Infrastructure is expensive, and many industry experts question where Everest will come up with the estimated $1 billion to serve the entire Kansas City area. Anderson said Everest was on target to be profitable in 2003, thanks to its success in signing up customers. Profits would help Everest secure venture capital, which would reduce its dependence on Aquila. Meanwhile, the dig goes on. In Overland Park, Everest crews struck gas lines in the summer and angered Time Warner by accidentally cutting into its cable. Joni Breidenthal said an Everest installer did not hook up her VCR correctly. She was pleased, though, at how quickly the problem was fixed. And she loves saving money with Everest. "I know they're a young company," she said. "But if they're cheaper and they're willing to make it right, I can forgive a few glitches." To reach Aaron Barnhart, call (816) 234-4790 or visit the TV Barn Web site at www.tvbarn.com. SERVICES/PRICES Everest Channels: 75 cable channels 43 digital cable channels 45 music channels 2 premiums channels Additional services: Local telephone with voice mail, call forwarding, caller ID, call waiting and three way calling; installation of up to four outlets per home 1.5-megabit Internet connection Price: $99.95/month Time Warner Cable Channels: 72 cable channels 62 digital cable channels 45 music channels 2 premium channels Additional services: 2-megabit Internet connection Price: $129.95/month $79.95/month "win-back" rate* Comcast Cable Channels: 72 cable channels 36 digital channels 45 music channels Additional services: 1.5-megabit Internet connection Prices: $100.84/mo. $75.84/mo. "win-back" rate* SBC Services: SBC/Yahoo DSL 1.5-megabit Internet connection Price: $49.95/month SBC/Dish Network Channels: 108 cable channels 51 music channels Premium channels extra Additional services: Internet and telephone service extra Prices: $56.98/month Primary phone line with voice mail, caller ID and call waiting with ID: $39.95/month* THE SMALL PRINT Prices do not include taxes. One megabit is about 18 times the speed of a 56kb modem connection. Time Warner Cable is offering discounts in areas served by Everest. Cable installation includes one terminal for viewing digital channels; dish installation includes two terminals for viewing all channels. Equipment is included in high-speed Internet packages. Internet speeds listed are maximums and may be lower during peak usage times. SBC charges a $49.95 installation fee but currently waives the first month's service fee. * A "win-back" rate is a discount offered to satellite-TV subscribers and customers in areas served by Everest. Comcast's rate is good for 16 months. @ARTPhoto @ART CAPTION:Durst @ART CREDIT:JOHN C. SOPINSKI/The Kansas City Star; Sources: Companies' published rates @ART:Graphics (2, one map)