The Times Mirror Co., one of the nation's largest cable television system operators, yesterday entered the fight for the lucrative Montgomery County cable franchise by signing up the support of a group of 22 influential county citizens.
The group, headed by prominent county lawyer Robert Linowes, received a 35 percent share of the company's local subsidiary in return for an initial investment of $5,000 apiece.According to conservative industry estimates, the county's cable franchise could be worth more than $50 million within 10 years of its award.
Announcement of the partnership appears to represent the first political manuever in what is likely to be an intense struggle of up to two years for the county's franchise award.
The arrangement, which earmarks $500,000 to operate the campaign to win the franchise, brings the powerful Los Angeles-based corporation into the Washington area for the first time. Times Mirror officials said they were also carefully considering an effort to win the cable franchise for the District, although the Montgomery County investors would not be involved in that project.
Linowes and Robert Erburu, president of the Times Mirror Co., stressed in an interview yesterday that the partners have each agreed to put up 35 percent of both the costs of the franchise application and the construction of the system, a venture that could cost as much as $70 million.
The local group will provide $175,000 of the intitial $500,000 for the venture. The agreement provides they will subsequently contribute a maximum of $5.25 million, compared to a Times Mirror investment of $9.75 million. But the pact prescribes no required minimum investment.
If the group wins the award, the two groups would then seek to "obtain loan commitments" to cover construction costs. A management committee will be made up of three members of Times Mirror management and two members of the local group.
Officials of the two concerns sought to discourage comparisons with so-called "rent-a-citizen" campaigns, a widespread industry practice in which cable companies grant influential community members shares in the company if it is granted the franchise award. Federal officials and municipal officials have been sharply critical of that process.
"It ought to put to rest the kinds of problems that have been raised in other areas," Erburu said. "The relationship is quite different here."
"We're going to remain part of the community and that's why we think we're different," said Linowes, whose group, Montgomery Cable Communications Inc., has been seeking the franchise there for about 10 years.
Times Mirror was not a major power in the cable business until their purchase in 1979 of Communications Properties Inc. That purchase made the company the sixth largest with 51 systems serving nearly 600,000 subscribers in 15 states.
But it also set up a bitter fight with Connecticut officials about cross ownership of both franchises around Hartford and Meridan and the Hartford Courant. That fight is continuing in federal court.
The fight for the franchise could begin in earnest next month when a Los Angeles consulting firm, Telecommunications Management Corp., and the county's Office of Management and Budget release a draft request for proposal -- the document that will ultimately be used to solicit formal franchise bids.
At that point, the County Council, county executive and a citizens advisory committee will critique the proposal before it is issued in final form.
A report issued by the consulting firm in January suggested that the system connect public facilities in the county to an institutional network, linking county government and citizen group organizations. The county, the consultant's report said, should also require that a portion of the cable system's revenues be devoted to community programming. Further, the report suggested, the county should require the company to supply at least one fully equipped van and studio for programming purposes.
More than 20 cable television firms are on the county's mailing list and many of those are considered certain to aggressively seek the franchise. Among those are Warner Amex Cable Communications, Time Inc.'s American Television & Communications Corp., Cox Cable Communications, and United Cable Television Corp.
Industry observers have repeatedly said that Montgomery County, because of its growth and affluence, is likely to be one of the nation's most contested and potentially lucrative cable television franchises.
In addition to Linowes, other stockholders include Linowes' law partner, Joseph P. Blocher; William Greenhalgh, president of the company and former president of the County Council; James Helliwell, former campaign manager for Prince George's County Executive Larry Hogan; Rose Kramer, former member of the County Council and school board; John Roper, former director of the county's Office of Economic Development, and Frederick Ford, an attorney who was a member of the Federal Communications Commission. CAPTION: Pictures 1 and 2, Times Mirror Co. President Robert Erburu and lawyer Robert Linowes: company, local group joining for cable television venture that could cost as much as $70 million. Photos by Harry Naltchayan -- The Washington Post