Rival falters in cable battle

Boston company indefinitely halting Balto. County efforts

Venture capital erodes

January 31, 2001|By David Nitkin | David Nitkin,SUN STAFF

One of two companies poised to bring cable competition to Baltimore County has apparently ended its effort in the face of evaporating money for new technology.

Edward T. Holleran, president and chief executive officer of American Broadband Inc. of Boston, said yesterday that "the company will need to indefinitely suspend its efforts to obtain franchise authority" in the county.

"The venture capital market has had significant change," Holleran said.

The county's negotiations with the second company, Starpower Communications Inc. of Washington, are proceeding slowly, dimming the prospect of cable, Internet access and long-distance telephone service being bundled on fiber-optic lines in the county.

Six months ago, Baltimore County appeared poised to enter a new world as two companies angled for the rights to invest a combined $365 million in fiber-optic networks.

But in recent weeks, American Broadband lost commitments for $150 million in debt financing and $50 million in venture capital it intended for several projects, including one in Rhode Island, according to published reports.

Despite Holleran's comments, county officials maintained yesterday that they continue to negotiate with both companies. They said they believe American Broadband wants to concentrate on its Rhode Island project while maintaining some interest in Maryland.

"I'm trying to strike a good bargain on behalf of the county and the citizens," said Councilman Kevin B. Kamenetz, the Pikesville-Randallstown Democrat who handles cable negotiations for the council.

The two companies promised better service and lower prices than Comcast, the county's monopoly cable provider, when they made their initial pitches last spring. But as talks dragged on, the economy weakened.

Next week, the County Council will consider granting a second, 90-day extension beyond the original 90-day negotiating period that began in August. Those participating in the negotiations -- while refusing to reveal details -- say the companies and the county continue to pursue agreements on construction schedules, community service contributions and the type of equipment and materials that should be used.

"I think we're closer, but the ball has been in their court for several weeks now," Kamenetz said.

Ted Venetoulis, the former county executive working as a consultant and lobbyist for Starpower, said yesterday that his company remains committed to Baltimore County.

"We're exchanging documents, and it's going pretty well," Venetoulis said. Asked what the most significant unresolved issues were, he said: "I wouldn't call anything `big' at this point. There are no insurmountable issues."

Keeping watch on the talks is Comcast, which has frequently warned against giving new companies an unfair advantage by allowing them to build only in higher-profit neighborhoods.

"The question I would have is, `Why is the county not yet there?' " asked David Nevins, a public relations consultant hired by Comcast. "I would certainly hope that this is not a tactic that either of these companies would be using to wear down the council to get a better deal."

Council Chairman Stephen G. Sam Moxley also expressed concern about the delays. "If [the deadline] is not met within the next three months, I'll be hard-pressed to extend it again," said Moxley, a Catonsville Democrat. "It's no secret what we want."

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