The Montgomery County Council yesterday unanimously approved a cable television franchise agreement with Tribune-United of Montgomery County, giving that cable firm the exclusive right for the next 15 years to construct and operate what could be one of the most lucrative cable systems in the nation. Half of the 217,000 potential subscribers in the county could tap into the $130 million system initially, the company predicts.
The franchise agreement must now be signed by County Executive Charles W. Gilchrist and the cable firm representative, before construction begins simultaneously at 10 locations around the county. The cable firm expects to wire Rockville, Takoma Park and other portions of the lower county within 18 months, and about 95 percent of the county will have cable within 35 months.
The basic 42-channel system will cost households $1.50 a month, plus a $15 installation fee, with prices essentially guaranteed to remain at that level for four years. Tribune-United--a joint venture of Tribune Co. of Chicago and United Cable Television Corp., a publicly held television company in Denver--won the right to negotiate the franchise agreement because it promised to wire the entire county while guaranteeing low rates for the first four years of the service.
Tribune-United spokeswoman Fern Krauss said after the vote that the firm would not ask to renegotiate the contract, despite the council's last-minute passage of a law giving itself broad new regulatory powers over cable. Montgomery thus became the only known jurisdiction in the nation to enact its own local antitrust law.
After conferring with the cable firm's lawyers, Krauss said construction will proceed as scheduled, but that Tribune-United reserved the option to decide later what impact the new council law might have on rates and service. "This may pose a threat to consumers," she said. "We'll just have to assess that later on down the line."
Krauss and cable lawyer Jay Ricks had said the new regulatory role for the council would add another layer of bureaucracy, and thus more administrative costs, for the cable firm. Those costs would be passed on to consumers in the form of higher rates, they said. Yesterday, Krauss said, "All we have now is a paper document," and that Tribune-United would wait to see how the new law is enforced.
After the vote, council President David L. Scull--who sponsored the law giving the council more cable authority--sharply criticized a Washington Post editorial that called his bill "unnecessary" and its antitrust provision "superfluous."
"I am uncertain about The Post's objectivity on this question," because the newspaper may be planning to expand in the cable television market, Scull said.
Scull also quoted a New York law professor who suggested that because of The Post's "dominance in the advertising market in the Washington region," the newspaper was a potential target for antitrust prosecution if it tried to lease a channel to display want ad information.
Guyon Knight, director of corporate communication for the paper, said: "We believe the editorial in question is accurate and objective. Washington Post editorials are written by editors without regard to any corporate activity in cable communication."