Your Jan. 2 editorial "Franchise Freedom" was incorrect in numerous assertions regarding the cable industry, to wit:

It is grossly unfair to categorize cable companies as "usual suspects crying foul" and to levy accusations that we are directing local authorities to "slow roll approval and make unrelated demands" of the phone companies. We've met similar demands from local franchising authorities, both reasonable and unreasonable, for more than 40 years and welcome reform for all players.

Cable did not get a "free pass" to enter the telephone business. The regulatory relief cable received as a new voice entrant is comparable to the relief the phone companies now enjoy in video: pricing flexibility and access to essential facilities. Since 1997, when Cox was the first cable company to launch competitive telephone service, we have played by substantially the same rules as the Bells. Today, we have as much as 40% market share in some cities, proving that special regulatory favors are not needed to successfully compete. Consumers are the beneficiaries; in 2007, we estimate that Cox customers will save a quarter of a billion dollars on their telephone expense.

In video, cable does not enjoy a monopoly. Since the launch of direct satellite services more than a decade ago, consumers have had at least three choices for video service in every market in America. Cox also faces wireline overbuild competitors in many of our markets.

Allowing Bell companies preferred entry into the video market will not magically lower prices for consumers, but creating an unfair advantage for these large companies does hold the potential to unjustly damage existing competitors. The Journal fails to recognize that both Verizon and AT&T already charge prices for their video services that are similar to cable, a function of the fact that the primary driver affecting the retail price for video service is the cost of programming. It's disappointing that a leading business newspaper would demonstrate so little insight into the economics of this business by overlooking the effect of wholesale costs (programming) on retail costs.

Overall, your positioning of cable companies as anti-competitive is inaccurate since we compete for customers not only in video, but also in broadband and telephony. With $16 billion in private capital invested since 1996 to build a state-of-the-art broadband communications network, few companies have invested more or worked harder to meet evolving consumer appetites for entertainment and telecommunication services. As a result, Cox has received numerous honors for delivering an outstanding value proposition to our customers, including five JD Power and Associates honors in 2006 alone. We agree that franchise reform can be beneficial -- if it treats all providers equally and reduces taxes and fees for customers. When the Bells are ready to compete where it counts, in the marketplace, on value and service, we say bring it on.

Pat Esser
President
Cox Communications
Atlanta