Owners of the firm that operates Arlington's cable television gfranchise said yesterday the Arlington County Board didn't go far enough Tuesday night in extending the franchise until 1991 and the company is still in financial difficulty.
"It's not fatal," said John Evans, executive director of Arlington Telecommunications Corp. (ARTEC), who had asked the board to extend the franchise, due to expire in 1985, through 1995. "But I am concerned about that and ultimately it's the community that loses." He said the firm won't be able to take risks in acquiring new technology "which the subscribers should be able to expect."
Cable TV technology is expanding rapidly with such innovations as use of satellites and home burglar alarms.
ARTEC, the Washington area's first cable company, appealed to the board two months ago for a 10-year renewal of its franchise, saying that it was threatened with bankruptcy and needed the extension to acquire long-term financing for about $6 million in short-term debts. The company became fully operational less than a year ago and new serves an estimated 20,000 county households.
After widespread public criticism that ARTEC had not met its contractual obligations with the county and after 18 month, the County Board granted an extension four years short of what ARTEC officials had hoped for.
"All of the testimony showed that eight years would probably be the absolute minimum" to ensure favorable financing, said County Board Chairman Stephen H. Detwiler yesterday. "If we're going to grant an extension in terms of the lifetime of a community, why quibble between six years and 10 years?"
Detwiler had urged the board's four other members to grant a full 10-year refranchinising, but his efforts fell one vote short. Yesterday board member Walter Frankland, who voted against Detweiler's proposal, said he would be willing to reconsider extending the agreement to 1995.
"We do have to look at it longer and a little harder," Frankland said. "If there's something seriously wrong with the shorter period, I'm interested in looking at it further."
The board is scheduled to consider specifics of the new agreement in September.
In the course of the debate over the refranchising proposal, ARTEC admitted its failure to meet some contractual agreements, such as providing an equipped production studio and public access programming opportunities.
A special panel selected to examine the company's finances, headed by former Federal Communications Commission Chairman Richard Wiley, reported that many of ARTEC's problems were beyond the company's control. ARTEC had not anticipated the steady increase in interest rates, for instance, and last year the company spent nearly 25 percent of its revenues on interest.
Only one board member, Dorothy T. Grotos, was prepared to go through an open bidding procedure for the franchise, a prospect Detwiler described yesterday as "awesome."
The board has been very cooperative with ARTEC," Grotos said. "Are we going to let them off the hook, let them come in the back door?"
"I don't look at this as a refranchising in any way, but as a recognition that from 1973 to 1979 there were a lot of problems in the industry," Detwiler said. "To say that we've had a system for 10 years is not factual . . . I look at our franchise as being brand new."
"We know that promises are different from reality," Frankland said. "I wouldn't put this community through that [bidding] again. We have a company."
Although the cable television industry is considered extremely lucrative in the long run, industry analysts say the high cost of stringing cable to subscribers means that most cable companies must wait up to 10 years from the start of transmission before receiving a return on their investment. Although awarded the Arlington franchise in 1973, ARTEC ran into troubles early on, including the death of a company officer. The franchise did not go into effect until 1975.
Under terms of a new agreement proposed by the county staff, ARTEC would be required to install $515,000 worth of new equipment within nine months and would be subject to redically increased financial penalties for any further deliquencies.