Cox’s Plan For Cable Network Down Under Hits Roadblock

Cox Cable’s plans for a $A500 million ($370 million) broadband cable system in Australia have hit a roadblock.

The fourth-largest MSO in the U.S., Cox announced last August a scheme to build a cable network serving more than 700,000 households in Queensland, stretching from Brisbane, the state capital, north to the Sunshine Coast and south to the Gold Coast.

The hitch, evidently unforeseen at the time, is that rival cabler Optus Vision has exclusive agreements with the electricity authority of Southeast Queensland to string cable wires over electricity poles.

‘No decision’

Cox Cable now says “there is no decision to proceed,” noting its plans were contingent on getting access to those poles. The alternative – going underground – would be much slower and more expensive.

Dick Rowe, Cox’s longtime Australian rep, insists that does not mean the entire project is off, and says he’s still talking to the utility.

But execs at Optus Vision (whose shareholders are telco Optus, U.S. cabler Continental Cablevision and Kerry Packer’s Publishing & Broadcasting), say they’re proceeding alone as part of their plans to construct a $2.2 billion national network.

Rowe’s company Rowcom Holdings has licenses for up to 28 cable services but thus far no means of distribution, as Optus Vision and the dominant telco Telstra race to build their own systems.

However Cox is not out of the pay TV business, having taken a 24.5% stake in the Australian Broadcasting Corp.’s two pay channels due to launch midyear.

The ABC has 51% of the $74 million co-venture, Australian Information Media, with Cox and the John Fairfax press group holding the rest.

The channels are The News Channel (20% owned by Turner’s CNN) and a hybrid channel consisting of Nickelodeon’s children fare during the day and dramas, docus and general entertainment in the evening (Nick parent Viacom owns 40%)

Nick’s Karen Fleischel, senior VP, research and development, has been confirmed as head of the second channel, and she starts March 6.

AIM wants to offer its services on a nonexclusive basis to the three major pay TV operators – Australis Media’s Galaxy, Optus Vision and News/Telstra – but may end up in one camp to secure the optimum share of subscription fees.

Kim Williams, general manager of ABC pay TV, says he’ll know in the next few weeks what kind of deal is viable.

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