Mid-Atlantic Cable rate increase starts tomorrow

September 30, 1992|By Adam Sachs | Adam Sachs,Staff Writer

Starting tomorrow, about 2,700 western Howard subscribers to Mid-Atlantic Cable will see a 13 percent increase in their bills.

The rate boost from $25.15 per month to $28.31 for customers of its 49-channel service is a move Mid-Atlantic's general partner says is necessary to meet rising costs and reduce an $18,000 a month operating deficit. Rates for the 22-channel basic service also will increase 10 percent from $15.70 per month to $17.28.

The larger Howard Cable TV charges $27.25 monthly for its 40-channel package and charges slightly more for premium channels.

John Norcutt, the company's general partner, said the 4-year-old western Howard franchise has been losing money each year, and has raised rates annually.

"As with any young company, we're in a negative cash flow position," he said. "Banks are insisting we bring in more than goes out."

Mr. Norcutt said it has taken four to seven years for the Bethesda-based company's three other franchise operations to begin making a profit.

The company also was unable to meet its July 1990 deadline for wiring western Howard, forcing it to seek deadline extensions from the County Council. The company has found it costly to wire the still-rural area, which has fewer subscribers per mile than heavily populated eastern Howard.

A combination of increasing rates and hooking up new subdivisions to the system will help Mid-Atlantic reduce its debt and eventually break even, said Mr. Norcutt.

In the meantime, the company's more established franchises and its 31 private cable systems in condominium and apartment communities are subsidizing the Howard operation, he said.

Mid-Atlantic is required by its franchise agreement to serve areas in which density reaches a minimum of 20 homes per mile of cable. It must construct about 35 miles of cable by the end of the year to fulfill its obligation to the county.

It is currently constructing the system for The Chase and Farside subdivisions and expects to complete work there by December, Mr. Norcutt said. The company recently completed construction for the Meadowood, Willow Springs, Ashleigh Green and Waterford developments, he said.

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