Bill would give franchise to second cable company

June 07, 1995|By JoAnna Daemmrich | JoAnna Daemmrich,Sun Staff Writer Sun staff writer Michael Dresser contributed to this article.

A day after calling for an end to the cable monopoly in Baltimore, the City Council has begun readying a bill to grant a franchise to an upstart local cable television company.

The swift move by the council to propose a franchise agreement for UltraVision LLC signals a growing dissatisfaction with United Artists Cable's stronghold in the city.

"I strongly feel we need to have some competition here with service, cost and selection," City Council President Mary Pat Clarke said.

Mrs. Clarke intends to introduce a bill as early as tomorrow night to grant UltraVision a franchise to become the second major cable provider in Baltimore.

The proposal, which would require a summer review and approval by the Board of Estimates, comes after the council unanimously endorsed a resolution Monday night to open up the market for competing cable companies.

Carl Stokes, a 2nd District councilman who does not have cable, says he is nonetheless supportive of having two companies in town. "More than one franchisee will be a good deal for all the citizens, all the potential subscribers."

UltraVision already has submitted a proposal to Mayor Kurt L. Schmoke to create the first cable competition in the city under the nonexclusive franchise awarded in 19884 to United Artists Cable of Baltimore, now a division of Tele-Communications Inc.

"We've been in the private cable television business in the city for a few years, and it became more than intuitively obvious that a competitor for United Cable was needed," said Gary I. Goldberg, founder and president of the Dickeyville firm.

To offer widespread cable service throughout the city, UltraVision needs an ordinance by the City Council granting land-use rights. The ordinance would have to be approved by the Board of Estimates, the five-member panel that reviews almost every aspect of city business.

UltraVision now supplies cable services without using public streets to 700 subscribers in 12 apartment and condominium buildings in the Coldspring New Town and Greenhill neighborhoods.

The company has proposed investing $36 million to install cable wiring throughout the city and begin providing basic service within 18 months of approval.

In contrast, United Artists Cable serves roughly 101,000 subscribers, about half the potential base of 250,000 households. United Cable generates an annual gross revenue of roughly $45 million, of which the city receives 5 percent under its franchise agreement.

"From our standpoint, we welcome the competition," said Kathy Roberts, United Artists Cable's marketing manager. "We know it's coming, whether it's from another cable company or Bell Atlantic or another source."

UltraVision was the first competitor to come forward with a serious proposal to provide cable service in Baltimore, said Joyce Jefferson Daniels, director of the Mayor's Office of Cable and Communications. Even without exclusive franchise rights, United Cable enjoyed a monopoly for the past 11 years because there were no rival offers from other cable companies.

Mayor Schmoke has promised to give strong consideration to granting a second cable franchise in Baltimore.

Only three months ago, Mr. Schmoke took a tough stance with United Cable after chronic complaints from residents trying to get wired for cable television.

City Hall issued an ultimatum to the company to provide installation of cable converter boxes within the seven days required by the franchise agreement. If the company did not correct the problem within 45 days, the city announced it would declare United Cable in default of the agreement.

United Cable cleared up most of the problems by placing employees on overtime and hiring additional workers to reduce the backlog of orders, Ms. Roberts said. The company streamlined its ordering of equipment and has already received 2,000 converter boxes this week, with another 600 on the way, she said.

The company also is in the midst of determining whether to add new programs to its lineup, including ESPN2 and the Sci-Fi Channel. Customers who testified before the city's Cable Communications Advisory Commission in late March complained that some of the most popular channels have never been offered.

Even though United Cable has made progress, some council members said Monday night that they still receive complaints about poor service.

The council passed the resolution, which does not require another vote because it is not going to the mayor, as a show of will.

The resolution called for developing a process by Oct. 1 to provide franchises for competing cable companies, but the city already is in the midst of doing so, Ms. Daniels said. The likely result of the work by the cable agency and the law department will be a questionnaire asking companies to provide financial information, construction plans and technical details so the city can determine if the proposals are sound.

"We obviously think the idea of competition is good," Ms. Daniels said. "Right now, we have so many potential players that the market itself is carrying us without a doubt toward competition anyway."

The Baltimore metropolitan area is becoming one of the hottest telecommunications markets in the nation. Bell Atlantic Corp., for example, wants to offer "wireless cable," which does not require an extensive land-based network.

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