At one time, the "overbuilder" model was a Wall Street darling. Today, network operators building competitive HFC networks would be lucky if venture capitalists take their call. But despite some high-profile overbuilder flame-outs, the competitive model is being market-tested in a few regions around the country.
Texas is one place competition for bundled services is heating up. Deep in the heart of Texas (specifically in the Central Texas Corridor, made up of the cities of Austin, San Antonio and San Marcos), Grande Communications offers a bundle of high-speed Internet, phone and cable TV over a spankin' new network. Today, Grande announced the completion of its acquisition of fellow Texas provider ClearSource, adding cities like Waco, Corpus Christi, Midland and Odessa to the Grande mix.
At the center of the merged company is Grande Vice Chairman and CEO William Morrow, who has ties to the founding of the former ClearSource. In a previous position with competitive cableco Knology, Morrow brought together Knology investors to create ClearSource, and served as a founding executive and board member of the new company. In 1999, Morrow left Knology to start another company-present day Grande Communications.
The new combined company will have a quarter of a million homes passed and roughly 100,000 connections. "Grande is a fully-funded EBITDA-positive company, and ClearSource's markets of Waco, Corpus (Christi), and Midland/Odessa are all EBITDA-positive markets," Morrow says. "When we combine these two companies, it's an accretive transaction, and the combined company is even stronger, from a fully-funded perspective.