Four or five months from now, when Malibuites turn on their television sets, no longer will Falcon Communications cable service greet them as it has since the mid-’80s. On May 26, Falcon, founded in 1975, and Charter Communications, headquartered in St. Louis, announced an agreement in which Charter will buy Falcon and its million nationwide subscribers for some $3.6 billion in cash and stock. With the acquisition, Charter becomes the nation’s fourth-largest cable operator.
So what does the change portend for the 15,000 Falcon subscribers in the Malibu/Calabasas area, a mere drop in Charter’s bucket of 5.5 million customers? Well, for one thing, Malibu will be a little more involved with Charter owner (and Microsoft Corp. co-founder) Paul Allen’s vision of a wired world, interconnected global network. What that means to the man and woman on the beach is a potential for a host of new services, including Internet access and interactive TV delivered by cable wires.
To achieve his vision, Allen, a billionaire who owns the former Rock Hudson Beverly Hills estate, the Seattle Seahawks and the Portland Trail Blazers, and has a big stake in Dreamworks SKG, has been on a “buying frenzy” (to quote the Los Angeles Times). Acquired by Allen in 1998, Charter was ranked that year as the eighth-fastest growing company in the United States by INC. magazine. They also have a good reputation; also in 1998, Charter’s quality of service was ranked by its customers as among the top three companies in the industry according to a J.D. Powers & Associates survey.
“Paul Allen and Marc Nathanson [CEO of Falcon who will become vice chairman of Charter] are both committed to bringing advanced services to non-urban areas,” said Art Maulsby, Falcon’s PR director. “Just because you live in a small town or rural area doesn’t mean the quality or breadth of your services should be any less advanced.”
Although Charter plans to begin upgrading its systems in Pasadena and the San Fernando Valley this year, and Long Beach and Riverside in 2000, much of Malibu’s system is already in pretty good shape to move into Allen’s brave new wired world. “Malibu is already an upgraded system,” Maulsby said. “Actually, it’s a hybrid system with some digital wiring — not all fiber optics yet — and some analog wiring. It may be delayed a few months, but the system will allow the launching of Internet access.”
But what about telephone service, one of the services the cable giant MediaOne (itself the target of AT&T whose 46 percent stake in Falcon will be sold to Charter) is offering as an incentive as it rewires its Los Angeles territories? “Telephone is another thing,” Maulsby said. “It has to be interactive capable because it’s two way. We want to get Internet up and running before telephone.” As far as changes in Pay-Per-View services (PPV), Maulsby sees none, nor could he predict, at this stage in the transition (it takes time to get franchise consent from the communities), if subscription rates would change.
“Charter is known for having smooth acquisitions and for its smooth transitions,” Maulsby added. “They don’t shake up things. Any changes are well-thought out and have very little disruption to customer.”