After some years of indecision, Montgomery County is about to open the door to a period of fierce competition for the count's multi-million-dollar cable TV franchise.
The struggle for the valuable franchise, to be awarded by County Executive Charles W. Gilchrist and the Montgomery County Council, will involve two opposing local cable TV groups composed of prominent county residents, in addition to several other cable companies represented by prominent Montgomery lawyers and public officials.
At stake, said one cable TV expert, will be revenues that could reach $15 million a year when the cable wiring is completed in the county. Stockholders in the group or firm that wins the franchise stand to reap heavy profits from their investments.
Montgomery plans to award its cable franchise in about a year, during which heavy lobbying is expected.
One key event in the cable fight will by the appointment within two weeks by Gilchrist and the county council of an advisory committee to study cable applicants and their proposals.
Approved firms will be submitted to Gilchrist, who plans to choose one and send the name to the council for approval.
When the system is complete, an estimated 82,000 Montgomery homes are expected to subscribe to the cable service, which will provide viewing on at least 50 channels for a monthly fee.
Stockholders in both Montgomery cable TV organizations have been waiting for more than seven years to get in on the ground floor of the lucrative cable business.
One of the two Montgomery groups is Montgomery Cable Communications Inc. (MCCI), headed by former Montgomery council president William W. Greenhalgh. A list of its stockholders includes a number of past and present county officials and otherwise-prominent people.
Each of the 22 stockholders holds between $2,000 and $5,000 in stock, sold originally for $1 a share, according to attorney R. Robert Linowes, a founder of MCCI and former president of the Greater Washington Board of Trade.
The other group, Montgomery Community Cablevision (MCC), is headed by Sen. Victor L. Crawford (D-Mont.). The group refused to provide a list of its stockholders.
In what has become a national trend, firms competing for cable franchises often sell stock to and otherwise corral prominent local citizens to help them influence local governing boards in awarding cable franchises. In the cable business, the process is sometimes called "rent a citizen."
One of the reasons for the intense lobbying efforts, said Martin Malarkey, a national cable consultant based in Washington, is that just bidding for a franchise can cost a firm up to half a million dollars in preparation costs.
One Washington-area cable firm widely publicizes its new board members, apparently with the idea that the more local identity the firm achieves, the better its chances of convincing a local governing board that the cable system will be in good hands.
Because the awarding of cable TV franchises in many areas of the country, including the Washington area, has ben accompanied by political infighting and complaints of influence-peddling, Montgomery officials acknowledge they are frightened of the potential for scandal.
"If there was any way I could justify getting out of making a decision about a franchise, I would," said Gilchrist. "There is an awful lot of money involved and there is an inference that if prominent local citizens are given interest in a company, an application will be looked upon more favorably."
Gilchrist himself once had ties to cable firms. As a member of the Washington law firm of Lee, Toomey and Kent, Gilchrist gave tax advice to two cable companies -- Via-Com, a spin-off of CBS, and Storer Communications, a Miami-based firm participating in Prince George's current cable franchise competition. Gilchrist said he broke off all connection with the companies when he became county executive.
Gilchrist is not alone in his wariness of the cable TV process.
County council member Rose Crenca put it this way:
"Any time I talk with a lawyer or a politician, I won't talk about television -- not even Johnny Carson. We're all avoiding it like the plague."
She continued, "Anybody who gets involved in cable TV can't belong to a sweet little old ladies' club."
So heated do cable TV controversies become that former U.S. rep. Newton I. Steers, a former member of the MCCI board of directors, said he cut his connections with the firm two months ago because of political considerations. Steers said he sold his stock, 2,000 shares at $1 a share, and resigned from the board.
Steers, seeking to regain his House seat, faces a tough rematch of his 1978 battle with Democratic Rep. Michael Barnes. "The stock portended to be more of a political liability than a financial asset," Steers said.
Another clear sign of the nervousness of Montgomery officials was the recent enactment of anti-lobbying legislation barring the county executive and members of the county council from privately discussing franachises with applicants.
At the same time, the council adopted a resolution stating that the franchise would be awarded on the merits of the applications, without consideration of whether the cable firm was owned by local residents or by outsiders.
Skepticism about the effectiveness of Montgomery's anti-lobbing law was voiced by consulant Malarkey, who prepared a cable TV study for the county some six years ago and is Fairfax County's cable TV consultant.
"Only the most blatant lobbying -- the wining and dining of county officials and the flying of council members to out-of-state locations to inspect present cable sites -- will stop. The rest, the more subtle forms of pressure, will continue," Malarkey predicted.
Chatting with elected officials at cocktail parties will inevitably continue, he added. "These people (prominent citizens and county officials) travel in the same circles and have known each other for years. How could a person (a county official) ignore a friend's request to look at his proposal?"
Competing for the Montgomery franchise will be the two local groups and several national cable organizations.
Cable firms which have expressed interest in applying for the Montgomery franchise include Metro Vision, an Atlanta-based subsidiary of Newhouse Broadcasting Co.; McLean-Hunter, a Canadian cable TV firm; American Television and Communications, a Time Inc. subsidiary; Cox Cable Communicatins Inc. of Atlanta; Warner-Amex of New York; storer Communications of Miami; Arlington Communications Corp. (ARTEC) of Arlington, Va.; Cross Country Cable, based in New Jersey.
Among the Montgomery lawyers hired by some of these firms are:
Sen. Laurence Levitan, chairman of the state Senate's Budget and Taxation Committee. Levitan's law firm has been hired by MetroVision, the Newhouse subsidiary.
Darrel L. Longest, former deputy stae's attorney, representing McLean-Hunter, the Canadian firm.
Howard J. Thomas, former Democratic county chairman and co-chairman of the State Democratic Committee, representing American Television and Communicatins of Time Inc.
Stanton J. Gildenhorn, former Montgomery Democratic chairman and delegate to the recent Democratic National Convention, representing Cox Cable Communications Inc.
Peter J. Messitte of Chevey Chase, a delegate to the recent Democratic National Convention, said he was negotiating to represent a cable televison firm, but would not reveal its name.
Shortly after its formation eight years ago, Montgomery Community Cablevision (MCC), headed by Sen. Crawford, was merged with another cable organization, First Communications Inc., headed by Bethesda businessman Arthur Barber. Barber's firm recently won part of the cable franchise in Alexandria and operates a cable franchise in Roanoke.
First Communications currently is seeking franchises in Fairfax and Prince George's counties, in addition to other franchises on the East Coast.
Montgomery Cable Communications Inc. (MCCI), headed by Greenhalgh, is considering joining forces with one of three national cable television firms. They are Warner-Amex, Cox Cable Communications and a third company that MCCI officials would not identify.
While MCCI's Linowes and MCC's Crawford say they endorse the anti-"rent-a-citizen" sentiment of the recent county legislation, both feel a decision on the franchise that does not include consideration of geographics reflects an anti-local bias.
"It is silly and destructive not to encourage local participation," said Linowes. "We live in the community and have to face our neighbors when a commitment is not met, unlike outside representatives."
"We will not be front men for the big operators," Linowes said, referring to national companies which have offered stock but no management positions to his local cable group. "We are men and women of responsibility and reputation who feel a commitment to our local commuity. Any partnership will be an equal partnership."
Bidding for a franchise is expected to begin in February and a franchise may be granted the following November, according to Montgomery cable manager John Hansman. Service should begin in some homes as early as September 1982, he said.