At the District Building yesterday, the only thing less popular than the idea of giving the city's cable television firm the concessions it asked for Tuesday was the notion of starting the drawn-out franchising process all over again.
District Cablevision Inc., which signed a 15-year cable agreement, is seeking modifications that include releasing the company from its commitment to wire every home in the city, reducing the size of the system and delaying payments to the city.
The firm maintains that the concessions, worth at least $32 million, are necessary for the company to make the system economically viable.
Even with the proposed modifications, company officials say that some homes would be wired for cable by next summer and all construction would be complete in four years.
The company, however, does not want to be required to wire homes where the cost would exceed $500 apiece. Instead, the company would provide an alternative service, provided that the cable system has reached a 30 percent penetration level.
But several City Council members said that placing a condition on which homes receive cable would remove a crucial aspect that made the District Cablevision proposal so attractive.
"Either everybody is going to have the opportunity to get it or I don't want to do it at all," said Council Chairman David A. Clarke.
William R. Hyde, an official for Capital City Cable, one of the losing bidders for the cable television franchise, said yesterday that his company remains "willing and able to build the system" if the council would reconsider.
District Cablevision's request for modifications is hardly unprecedented. Indeed, in many large urban areas, cable companies have tried to scale back on their promises after finding that the elaborate systems they agreed to build are not economically feasible.
In addition to awarding the franchise to another company, the council's options include accepting the modifications or renegotiating the agreement.
Some members said that seeking new bidders would be the least attractive option because they might again be forced to consider modifications once a new bidder is selected.
"I think the council is going to try every way it can to retrieve a viable system," said Wilhelmina J. Rolark (D-Ward 8). "To start all over would be devastating. I'm still hopeful that the situation is not as bleak as it may appear."
Robert L. Johnson, president of District Cablevision, said that if the council accepts the modifications, Tele-Communications Inc. (TCI), a Denver-based firm that is a major District Cablevision shareholder and one of the country's largest cable system operators, would supply $30 million in financing for the District system or become the lead investor in a limited partnership offering for the same amount.
District Cablevision has maintained that it needed to secure $50 million in bank financing and $30 million through limited partnerships to construct the $130 million system.
But the company has been unable to collect $600,000 of the funds pledged by its stockholders and maintains that it has been unable to raise the necessary money, said Richard Maulsby, director of the D.C. Office of Cable Television.
"TCI is calling the shots on the deal at this point," said Maulsby. "They're saying, 'We'll see that it gets funded if you get these concessions from the city.' "
Meanwhile, District Cablevision has $52,000 in cash on hand and has requested that all of its financial obligations, including a $250,000 payment due to the city on June 30, be deferred until 30 days after the council approves the proposed modifications.
Maulsby said District Cablevision has already failed to pay $100,000 in cash and $212,000 in the form of an irrevocable letter of credit that had been required as part of a $2 million security fund negotiated to protect the city's interests if the firm defaulted on the cable agreement.
Before awarding the cable franchise, the city's representatives granted District Cablevision concessions that would help the firm reduce its initial construction costs. Now, some council members say they are angry about the latest request for modifications.
Nadine P. Winter (D-Ward 6) said that District Cablevision has "misled" the city and that she would be "totally opposed" to allowing the company to keep the franchise. Winter said she prefers to see the District government build, own and operate a cable system.
Betty Ann Kane (D-At Large), chairman of the council's cable committee, said District Cablevision will be forced to present evidence to prove that it needs the concessions. "I need to be convinced that they really did try to get financing and couldn't," said Kane.