Comcast calls off Millennium deal

September 29, 2007|By Lorraine Mirabella | Lorraine Mirabella,Sun reporter

Comcast Cable has withdrawn its offer to purchase the assets of Millennium Digital Media in northern Anne Arundel County, where Millennium has 40,000 cable subscribers, Comcast said yesterday.

Comcast, the nation's largest cable provider, did not say why it backed out of the agreement, which Anne Arundel County officials approved in June. Comcast was awaiting Federal Trade Commission approval, but the FTC had not yet ruled.

"The purchase agreement between Millennium and Comcast for cable system assets in Anne Arundel County has been withdrawn," said Jeff Alexander, a Comcast spokesman. "We appreciate the county's efforts and support throughout the process."

A spokesman for the FTC said the agency could not comment.

Peter Smith, a senior vice president of programming for Millennium, said he could not address Comcast's reasons for pulling back its offer. Millennium will focus on operating, rather than trying to sell, the system, he said.

"We're putting together our plans for improving the reliability of the system, increasing customer care personnel and returning to a competitive mode," Smith said. "Now that the Anne Arundel system is no longer for sale, we will resume our investment and upgrades and improvements that we try to do on an ongoing basis."

In the short term, Comcast's move means the county will not lose a cable competitor, and "that's a good thing," said John Lyons, cable television administrator for the county, who said the county currently has three cable providers - Comcast, Millennium and, since August 2006, Verizon Communications.

The county will soon have a fourth provider, when Cavalier Telephone and TV will join the mix, offering cable television and Internet service as well as phone service in Glen Burnie, Brooklyn Park, Linthicum and Maryland City. Cavalier is awaiting County Council approval.

Lyons said the level of competition in the county is unusual and that he is not aware of any other jurisdiction in the nation with areas served by four cable competitors.

"The obvious question is, can this market support four companies," Lyons said, "and we don't have the answers."

The Anne Arundel County Council approved the Millennium and Comcast deal in June. The council had turned down similar requests in past years when the county had only two cable companies because such agreements would have limited cable competition, Lyons said.

When the county approved the Millennium deal, the company's chairman, Kelvin Westbrook, told The Sun that privately held Millennium had invested $30 million in upgrades in recent years to offer customers a bundled service of high-speed Internet, phone and cable. But despite the upgrades, he said, the customer base had dropped from 56,000.

According to its Web site, Millennium ranks among the nation's 25 biggest cable providers, serving more than 130,000 customers in Maryland, Michigan, Washington state and Oregon.

Lyons said that both Comcast and Millennium overlap in serving northern Anne Arundel County north of U.S. 50. The county has a total of 144,000 cable subscribers divided among the current three providers.

lorraine.mirabella@baltsun.com

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