The District's cable television contractor unveiled a five-year construction schedule yesterday calling for scattershot wiring to begin next June throughout the city, except in Ward 2, the center city area, and Ward 3 in Northwest where underground construction will be required.
An official of District Cablevision Inc. told the City Council that the firm could obtain $45 million in cash and loans to build the long-awaited system provided the council approves additional modifications to the franchise agreement that go well beyond the numerous changes that were provisionally granted by the council in July.
The firm now wants an open-ended provision that would allow it to alter the construction plan if the firm ecounters major economic problems. Company officials have said that District Cablevision should not be required to wire the entire city if the plan proves economically unfeasible. Mayor Marion Barry and a majority of council members are committed to a project covering the city.
Company officials revealed yesterday that they are seeking to transfer the city franchise to a limited partnership formed by District Cablevision and a subsidiary of Tele-Communications Inc. (TCI), the nation's largest cable operator. TCI has pledged to put up 75 percent of the financing. The move further fueled speculation that TCI would control the franchise that originally was intended to be held by a local, minority-controlled firm.
Richard Maulsby, the director of the city's cable television office, told members of the council's cable television committee that the mayor had no problems with District Cablevision's construction schedule and proposed changes in the franchise agreement. But the City Council must give final approval to any changes this fall, and several council members raised objections yesterday.
Council member Nadine P. Winter (D-Ward 6) said she disagreed with the plan to transfer the franchise.
"That's a new situation," she said. "You could transfer it to Joe Blow or Rolark and Winter . . . . Nowhere was it represented to me that we would give away the franchise agreement."
Council member Wilhelmina J. Rolark (D-Ward 8) complained about the contractor's piecemeal approach to construction and said she had been led to believe that a major portion of her Southeast Washington ward would be wired first. "I'm very disappointed with what I see," she said.
In the first year of the plan, beginning June 1986, construction of the cable system would get under way in 23 neighborhoods in six of the District's eight wards, including Dupont Circle and Adams-Morgan in Ward 1; the Crestwood and Petworth areas of Ward 4; parts of wards 5 and 6; eight neighborhoods of Ward 7 in Southeast, and the Buena Vista and Knox Hill areas of Ward 8.
In the second year, construction would begin in a small part of Georgetown, Woodley Park, Foxhall and Cleveland Park in Ward 3; Takoma and Fort Totten in Ward 4, and Brookland and Trinidad in Ward 5.
Construction in wards 5, 7 and 8 would be completed by the end of 1988, and the remaining wards, with the exception of Ward 2, would be completed by 1989. In the final year of the plan, the contractor expects to wire Foggy Bottom, the K Street corridor, the downtown area and portions of Southwest Washington.
In July, the council adopted emergency legislation modifying the franchise agreement for 90 days to give District Cablevision time to demonstrate that it could obtain financing to build the cable system.
Yesterday, the cable committee received details of a negotiated but unsigned limited partnership agreement in which TCI Development Corp. (TCID), a wholly owned subsidiary of TCI, would become a limited partner with a 75 percent interest in the limited partnership and District Cablevision would have a 25 percent interest.
Under the arrangement, TCI would transfer its $200,000 investment in District Cablevision to the limited partnership and District Cablevision, with the council's approval, would transfer the District franchise, valued at $1.5 million, to the limited partnership.
TCID then would be committed to contributing up to $15 million in cash and $30 million in credit.
In addition, the Chesapeake & Potomac Telephone Co. would continue its arrangement with District Cablevision to construct, maintain and own the cable transport lines. However, a revised agreement between District Cablevision and C&P calls for C&P to receive its construction fees based on the area wired rather than getting a flat fee.
Rolark noted during the meeting that the arrangements between TCI and District Cablevision made it seem as if District Cablevision is involved in "name only." As an example, she noted that Satellite Services Inc., a TCI subsidiary, is to be the exclusive distributor for pay cable programs for the District's system.
Tyrone Brown, a lawyer and member of the District Cablevision board of directors, contended that District Cablevision would control the cable system, including setting policy and budgets for the system.
He said the recommendation to transfer the cable television franchise to the limited partnership may be necessary for tax purposes and that the arrangement with Satellite Services Inc. would save District Cablevision money.
Under the proposed limited partnership, District Cablevision could not purchase more than 50 percent of that entity during its first six months without buying out TCID's entire interest.
In effect, this would prevent District Cablevision from taking control of the limited partnership, even if it could find another source of financing.
In addition, after seven years, either District Cablevision or TCID could sell its entire interest in the system to the other.
City Council member Betty Ann Kane (D-At Large), chairman of the cable committee, said she will recommend amending District Cablevision's latest proposal, particularly in areas where the firm is attempting to "tie the hands of the council."