Balto. Co. banks on Comcast's future County would receive cut of fiber optics

October 29, 1997|By Larry Carson | Larry Carson,SUN STAFF

In an unusual and potentially lucrative deal, Baltimore County would get a cut of any services Comcast Cablevision offers through its new fiber optic network -- even if they don't involve television.

The proposed 15-year agreement, which goes well beyond the typical cable franchise, guarantees the county won't be left behind as the cable industry develops profitable new fiber-optic ventures -- which could include anything from high-speed Internet access to local telephone service. The county gets about $4.3 million annually from Comcast's cable television franchise deal, but no estimates have been made on future revenues.

The new agreement also would provide fiber optic service to county offices and libraries and renews Comcast's 1996 promise to wire all county schools with high-speed Internet access as part of a nationwide push.

"Baltimore County is our flagship system in the country," said Comcast Vice President Stephen A. Burch, adding that the agreement -- with a $100 million fiber optic upgrade under way -- would give the county "the best cable system in the country."

Comcast is the nation's fourth-largest cable company and serves nearly 200,000 county subscribers, plus 110,000 more in Howard and Harford counties.

Baltimore County gets 5 percent of gross Comcast revenues under its nonexclusive contract.

If approved by the County Council, the new agreement would put Baltimore County ahead of most other localities by guaranteeing the county revenue from any future uses Comcast may make of its fiber optic system.

Except for Howard County, where Comcast is also upgrading to fiber optic cable, the other local jurisdictions have slower, more limited coaxial cable service. Some, like Harford and Carroll counties, collect 3 percent of gross revenues as a fee.

"This is an unprecedented deal in favor of the county," said County Councilman Kevin B. Kamenetz, a Pikesville-Randallstown Democrat who negotiated the agreement.

The deal is the county's attempt to cash in on Comcast's $100 million upgrade of its system to fiber optics, which Burch said is about 75 percent complete and should be done by mid-1998.

Fiber optic cable can carry more kinds of signals than older co-axial cable and at a higher speed. Already, Comcast has begun advertising high-speed Internet service to the public. Cable companies also are hoping to gain a foothold in the local telephone business using fiber optics.

Talks between Comcast and Baltimore County, which began nearly two years ago, took months longer to conclude than expected because of the county's insistence on getting 5 percent of all future revenue from fiber optics, both sides say.

Because Comcast was well into its upgrade -- and facing expiration of its franchise in April 1998 -- the county had a bargaining advantage.

Without a guarantee of revenue from all new fiber optic uses, Kamenetz said he was only willing to agree to a five-year pact. Comcast wanted a long-term deal to secure its investment.

"It's a tough agreement, a good agreement, fair," said Comcast's Burch. "If I'm going to make a $100 million investment in the county, I've got security."

The agreement also calls for Comcast to provide fiber optic service to county schools, libraries and to the County Council and the county executive's offices. Comcast in July 1996 already had announced plans to provide fiber optic service to county schools as part of a nationwide push.

Baltimore City, by contrast, is paying to build its fiber optic system for public buildings, according to Cedric Crump, program compliance officer. The city's cable provider, Tele-Communications Inc., isn't upgrading its system. "I kind of wish they would," he said.

Comcast's high-speed Internet service in Baltimore County will not conflict with earlier fiber optic service provided to some high schools in Maryland under a state government agreement with Chesapeake & Potomac Telephone Co. of Maryland, a subsidiary of Bell Atlantic.

Bill Rust, director of information technology for county schools, said the C&P agreement is used only to broadcast classes being taught at one school to students in another location.

That program is called Distance Learning. The county's eight participating schools pay nearly $1,800 per month to use those lines. The new Comcast service will be free and be used only for Internet access.

County library director Jim Fish said he is "quite excited" about the high-speed Internet access for libraries.

"This will be a great boon to county residents," he said, because of the greater speed and the increase in the variety and type of information they'll be able to get. "It opens a whole new vista."

The agreement also calls for one of three channels used by the county's three community colleges to instead be devoted to 10 hours of government programming a week, plus coverage of County Council meetings.

The agreement and a resolution calling for its approval will be introduced at the County Council meeting Monday. A public hearing will be held after the council meeting Nov. 17, and the pact will be discussed at a work session Nov. 25. A final vote is scheduled Dec. 1.

Pub Date: 10/29/97

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