Cable subscribers will get a bigger, more technologically advanced company when Time Warner Cable takes over the Buffalo-area system next year, industry experts said -- but not necessarily lower prices.
"Time Warner does have a reputation for being more on the cutting edge of technology," said Thomas Tarapacki, director of Buffalo's office of telecommunications. "They've rolled out new services a lot quicker than Adelphia."
In a deal valued at $17.6 billion, Time Warner and Comcast Corp. won the bidding for Adelphia's systems, the companies announced Thursday. If regulators and Adelphia's bankruptcy court approve the deal, Time Warner gets the Buffalo region network with about 300,000 subscribers, filling in a territory that already includes much of upstate New York and Ohio.
After the deal closes in nine to 12 months, jobs on the cable system will remain in place -- a relief for about 1,700 area workers -- but subscribers should begin to see changes in service.
Time Warner, the nation's No. 2 cable company, will add home telephone service in its new territories, executives said in a conference call, something that Adelphia so far lacks.
Customer service levels may also improve. Time Warner Cable ranked fifth of 11 cable companies in J.D. Power's customer satisfaction survey last year, while Adelphia shared a three-way tie for last place. The results were based on a survey of 8,668 households.
What subscribers might not see is a break on prices, which depend on local living standards and competition from satellite dishes. Time Warner already charges more for standard service in neighboring Rochester than Adelphia charges here.
Pricing "does vary by market," Time Warner Cable spokesman Keith Cocozza said.
Worries about jobs at Adelphia Communications have hung over the region for nearly three years, since the cable company filed for bankruptcy in June 2002. Time Warner executives heightened fears Thursday, saying in a conference call that they plan to consolidate operations with Denver-based Adelphia at the corporate and regional levels, saving $200 million a year.
However, the new owner plans to keep current workers in place when the takeover is complete, Cocozza said.
"All Adelphia systems employees in good standing will be offered the same job in the same location," he said.
Adelphia has 1,700 workers in its Buffalo region operations, including about 1,000 at call centers for customer service and tech support.
Time Warner performs most of its customer support in-house, using outsource providers for limited tasks that amount to 20 percent of its call center work force, Cocozza said.
Workers at Adelphia's call center in Buffalo's Waterfront Village development, who spoke on condition of anonymity, said they were taking the news in stride.
"I think it will stay -- none of us are worried," said one. Another said Time Warner needs the call center to service Adelphia's 1.4 million Internet subscribers.
Before the sale can close, Buffalo and other cities must approve the transfer of cable franchise rights. Tarapacki said the city will continue to work on wrapping up its agreement with Adelphia this fall, while contacting Time Warner about a transfer. The franchise pays Buffalo 5 percent of cable revenue from the city's 80,000 subscribers. It also mandates a monthly 22-cent surcharge on customers to support four public access channels.
In Albany, Syracuse and Rochester, Time Warner Cable operates a 24-hour local news channel, an idea that Adelphia had considered but dropped, Tarapacki said.
The deal will bring 3.5 million subscribers to Time Warner Cable, making its 14.4 million total second only to Comcast, with 23.3 million. Time Warner will become the sole owner of the Buffalo system, taking Comcast's current one-third stake.
Still undetermined is what creditors of Adelphia will receive for their claims. The company will file a reorganization plan within three months that describes how money from the sale will be divided, spokeswoman Erica Stull said. Many cable installers and other businesses in Western New York are awaiting payments that were frozen by the bankruptcy.
Adelphia's founding Rigas family won't receive a portion of the cash-and-stock buyout deal, Stull said. Founder John Rigas and son Timothy, the company's former chief financial officer, await sentencing June 1 for fraud and conspiracy.
It's also unclear whether cable companies they owned separately from Adelphia will be included in the sale. The family-owned systems are the subject of settlement talks with the Rigases.