Poor reception for cable operator Government's refusal to discuss new deal irks Prestige officials

February 27, 1997|By Sheridan Lyons | Sheridan Lyons,SUN STAFF

Prestige Cable TV Inc. officials say they are frustrated by Carroll County's refusal to link costly system improvements to contract renewal talks.

Prestige wants to discuss renewal of its 15-year contract, which expires in 1999, and the county's desire for multimillion-dollar improvements, said Seth Hopkins, a company spokesman and a negotiator for Prestige, based in Cartersville, Ga.

Its contract requires that improvements be made before 1999. The county, however, wants the company to do more than what is included in Prestige's $13 million proposal.

First the improvements and then contract talks, said Maggy MacPherson, administrator of the county's Office of Information and Communication Services, and its representative on the Carroll County and Towns Cable TV Committee.

Whatever the outcome, Prestige customers are likely to see a price increase -- but how much is uncertain, both sides agreed.

If the company were to accede to all of the county's demands and pass the cost on to customers, Prestige would price itself out of competition, Hopkins said.

The county's demands would cost the company a couple of million dollars more, he said, "which is real money to us. We're not a multimedia company: Our only business is cable, so the only money is from subscriber fees."

"So, if you add millions and millions of dollars [to the $13 million], pretty soon we're as expensive as Direct Star or Prime TV, and we're not competitive," he added.

Hopkins said the disagreement could find its way into court, but both he and MacPherson stopped short of calling the situation an impasse.

"We've already been negotiating for nearly two years," Hopkins noted. "We got a letter from them in March of 1995 that it was approaching the 12-year mark and time to discuss" [the upgrade].

Franchise-renewal talks normally take about three years, he said, and Prestige isn't sure who has authority to negotiate for Carroll County.

MacPherson said she serves as spokeswoman but is only one member among equals on the cable committee.

Hopkins provided a copy of the section of the contract that gave rise to the disagreements. It requires that Prestige begin upgrading the cable system in the contract's 12th year to "as advanced as the state of technology will allow."

The state of the state-of-the-art is to be determined by both sides, according to the contract.

And they don't agree.

'Institutional network'

Hopkins said Prestige negotiators were taken aback not only by the county's refusal to discuss renewal but by its attempt to dictate technical details of the improvements, and by a demand that Prestige provide a link among about two dozen public buildings.

MacPherson said the county wants Prestige to set up "an institutional network, which is part of a lot of good cable systems, to link government buildings, schools, libraries [and] the community college" that have to use expensive telephone service. "It only makes sense to do it," she said. " They are a public communication company, using the public airways for profit. We have a need."

Hopkins said Prestige's $13 million proposal would increase its 61-channel capacity to 78. But the county wants a 110-channel upgrade, "which is much more expensive -- in the range of millions. And running fiber to 20 or 25 county buildings would be a couple million more."

Instead, he said, Prestige "offered some goodies for the county." VTC It wouldn't have run fiber to the buildings but would have made nearby lines available for the cost of connection.

Second, he said, Prestige offered to increase the franchise fees it pays to the county from 3 percent of the gross to 5 percent -- about $250,000 a year above the $400,000 it paid in 1996.

Third, he said, the company offered a $50,000 cash payment for a public-access studio. "They said, 'No, we want to deal with them separately' [from the renewal], and we said, 'OK, but all these things go away,' " Hopkins added.

Prestige serves about 26,000 customers, of a potential 35,000, and covers all of Carroll County except Manchester, which already had a cable provider, and some Mount Airy residents who can choose between Prestige and a Frederick company.

Carroll County is the company's only contract in Maryland, Hopkins said. A family-owned enterprise that deals only in cable television, Prestige is ranked about 50th among the nation's cable operators and has about 150,000 customers, with similarly sized franchises in Virginia, North Carolina and Georgia.

Limited resources

A large gap exists between the resources of small companies such as Prestige and the top 10, which are experimenting with more sophisticated information systems over cable lines.

"We're not in that league," Hopkins said. "But it seems that even if we gave them everything, the county is still not going to talk about renewal."

"The clause in the current contract says they have to bring it to state-of-the-art by the 12th year," MacPherson said, "and that's where we are now, and that's what we're negotiating.

"Prestige would like to discuss the franchise-renewal concurrently," she said, "but they have a contract clause requiring the upgrade that they have to resolve with us before we negotiate renewal. The only other issue is whether there's anybody else out there. The cable franchise is not exclusive."

But it is unlikely that another cable operator would come into Carroll, she said, adding, "I don't think we have enough people. Our population density doesn't make it that attractive."

Pub Date: 2/27/97

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