The Arlington County Board opened the way yesterday for a public debate on whether it should start looking for a new operator for its cable television franchise, agreeing to hold a hearing next month on a proposed early renewal of its contract with Arlington Telecommunications Corp. (ARTEC).
Officials at ARTEC, the area's first cable network, have asked the county to extend the company's contract through 1995.It was not due to expire for four years, but ARTEC has told the board it needs assurances of long-term operation there before it can secure financing on about $6 million in debts.
A public hearing on the proposal is certain to subject the company to complaints from some subscribers. It could lead to open bidding on the franchise, although that decision is up to the county board. If competitive bidding results from the move, Arlington's would be one of the country's first major existing cable arrangements to face the test of such exposure.
"The reason to finance is that we are presently riding with time," said ARTEC president Thomas Richards, explaining that the company is under pressure to seek financing at the lowerest possible rate. "We contemplated interest at 6 to 8 percent in 1973. In 1978 we contemplated 12. nobody in the country contemplated 20 percent."
The $8 million ARTEC system, the Washington area's first, generated revenues of nearly $4 million last year. It began broadcasting three years ago after signing its contract with the county in 1973.
A representative of one of ARTEC's potential competitors, Cross Country Cable Ltd., called the proposal a "bailout" and labled ARTEC "Arlington's Chrysler."
County Board Chairman Stephen Detwiler said he thought ARTEC's plea "perfectly natural" in light of economic pressures.
The board recently appointed a three-member citizens committee to examine the company's finances. One of those chosen is former Federal Communications Commission Chairman Richard E. Wiley.
In the few years of its operation in Arlington, ARTEC has already come under public attack. It has yet to make good on some of its contractual promises, such as providing an equipped production studio and public access programming opportunities.
"ARTEC has complied with most of the provision in its franchise," ARTEC president Richards said. "We're going to try to comply with everything. The refranchising will allow ARTEC to meet those few commitments that need to be met."
Last year the county board deregulated rates charged to ARTEC's 20,000 household subscribers and earlier this year agreed to a 60-percent increase in installation charges, from $25 to $39.95.
Detwiler said yesterday that ARTEC could survive without the loan, but that it would probably mean another rate increase.
The proposed new contract would require immediate payment for equipment that thus far is undelivered, and radically increased financial penalties for future delinquencies.