Fairfax Telecommunications Co., which last summer lost a high-stakes cable television franchise battle in Fairfax County, is planning to sue in an effort to win the franchise in court, shareholders and directors of the company said yesterday.
The firm's directors voted the day before Thanksgiving to sue the county and ask a judge to overturn the award of a potentially lucrative 15-year cable monopoly to Media General Cable of Fairfax County Inc., the only other company that bid for the franchise. Fairfax Telecommunications officials have asserted the county showed favoritism to Media General and ignored county laws in awarding a franchise that a consultant has said could be worth $260 million in 15 years.
"With the arrangements we've made with our attorneys and the new stock we've sold, we can go all the way to the Supreme Court," one Fairfax Telecommunications shareholder said yesterday. "We're funded all the way."
Media General and county officials expressed fears that a lawsuit might further delay the availability of cable television in Fairfax, where the franchising process was studied and debated for years. Media General, a subsidiary of the communications company that owns the Richmond newspapers, has promised to eventually offer more than 100 channels of programming, with service beginning next summer in some parts of the county.
"If they're going to delay the thing, I think it puts a lie to their old claims of wanting to bring cable to Fairfax as quickly as possible," said Media General spokeswoman Lorraine Foulds. "I think they're hoping to create such a nuisance that Media General will simply come in and say, 'Hoo-hah, we'll buy your shares from you.' I think it's strictly monetary."
L. Gary Byrd, president of Fairfax Telecommunications, said, "We're not really ready to say anything publicly."
But several Fairfax Telecomunications shareholders, who confirmed the firm's intention to sue, said any delay would be the responsibility of county officials. "It's their wrong that may ultimately lead to some delay in citizens' receipt of cable, not our effort to correct that wrong," one said.
At the same time, Fairfax Telecommunications shareholders, many of whom have increased their investment in the company to pay for the suit, said they will not seek an injunction against Media General's construction of the system while the suit is pending. "If they want to go ahead, fine," said John Papajohn, a shareholder and director. "Maybe they'll want to sell it to us, if we think any of it is worth buying."
Media General and Fairfax Telecommunications competed head-on for the wealthy county's franchise after several better-known national cable companies dropped out, in some cases complaining about delays in the county's complicated franchise process. While Media General recruited five influential local citizens who will receive shares in the company, Fairfax Telecommunications was a partnership between 212 local investors, many of them politically prominent, and a huge Denver-based cable firm, Tele-Communications Inc.
Those local investors, although they would not have had to contribute toward the costs of building the system, invested an average of $4,000 each for the franchising battle itself. They did not recover those costs from the large Denver firm, and Tele-Communications has informed the local company it will not help pay for the suit.
Fairfax Telecommunications shareholders include the Democratic county chairman, a former Republican county chairman, state Sen. Adelard L. Brault, the county's senior legislator, and Andrew P. Miller, former Virginia state attorney general. Both Brault and Miller have been working on the lawsuit, which is expected to be filed in the middle of this month, according to the shareholders.
Although both companies were rated qualified by the county's consultant, Fairfax Telecommunications officials maintained that Media General was too inexperienced to do the job. They said the county illegally allowed Media General to amend its application as deficiencies were discovered.
"We made a decision that was in the best interests of the county as a whole," said County Board Chairman John F. Herrity. "It certainly wasn't appreciated by members of the business community, some 200 of them, but you can't make decisions for the financial advantage of some individuals."