Knology buys up Verizon video assets

Verizon has officially exited the video business — for the moment -selling off its cable systems in Cerritos, Calif., and Pinellas County, Fla., to Knology and St. Louis-based investment firm GLA New Ventures for an undisclosed sum.

The sale of the two systems, remnants from Verizon's acquisition of GTE, also closes the chapter on americast, the former telco/Disney video brand that was expected to take on the major cable operators in much of the country. Knology, the Knoxville, Tenn.-based cable overbuilder, will bring both systems under its own brand, said Taylor Nipper, senior director of marketing.

Previously, Knology had focused most of its efforts on the Southeastern U.S., including building systems in Knoxville and Huntsville, Ala. In Pinellas County, the company will be taking over a system that serves about 54,000 video customers. Cerritos, though smaller with about 8000 video and data customers, has some historic significance.

Among the first hybrid fiber/coax systems, Cerritos was a hotbed of test activity for telco video and high-speed data in the '90s. It also was home to some of the first fiber-to-the-curb trials. However, with the acquisition of GTE by Verizon, the telco had been trying to sell off both systems for some time. A previously announced deal to sell both to Adelphia was scratched after that cable company’s financial scandal was revealed.

“We began re-marketing these properties in June,” said a Verizon spokesman.

The sale, though, doesn’t mean Verizon will be out of the video market for good, he added. It is believed that the success of the company’s fiber-to-the-premises effort will depend to a large extent on the ability to deliver some type of video service.

“This merely exits us from our cable TV video operations business,” the spokesman said. “We’re still formulating our video strategy.” The Knology transaction is expected to close by the end of the year, pending regulatory approvals.