A procession of executives from Montgomery County's troubled cable television company called for sweeping cutbacks in promised services last night to avert huge financial losses and substantial subscriber rate increases during the next several years.
But the pleas, made before a county hearing examiner in Rockville, were countered by a county official who said none of the proposed changes was justified under a year-old federal law that allows cable companies to seek modifications in contracts to operate cable systems.
Michael Goldman, a member of the county's Cable Communications Advisory Committee, said the Tribune-United Cable Co., operator of the local system, used questionable assumptions on crucial financial projections to demonstrate the need for massive changes in the county cable system.
Gardner F. Gillespie, a Tribune-United executive, said the county cable system would lose in excess of $64 million during the next 15 years unless it were relieved of several promises it made when it won the county franchise in 1982.
Gillespie, other Tribune executives and five expert witnesses presented by the company testified that unforeseen changes in the market had sharply reduced demand for such things as home security services, a business network, a two-way system for home banking and shopping and community access programming.
Under the terms of its contract, the company had agreed to provide $99 million in programming grants, equipment and fees to the county based on rosy revenue projections from those services. Last night, Gillespie asked the hearing examiner to approve reducing the amount to $29 million over the 15-year life of the contract.
In addition, the executive asked for relief from a promise to wire all 228,000 county homes and reduction by half in the 120 promised television channels.
Last night's hearing was the first of two that are scheduled to hear testimony on proposed contract modifications as required under the federal Cable Communications Policy Act of 1984. The law was passed by Congress to set up a procedure under which cable companies could renegotiate so-called "blue sky" contracts that promised an array of services that proved not to be profitable.
Michael J. Pohl, a Tribune vice president, said the company originally envisioned more than $127 million in surplus revenues for taxes, interest payments and profits.
The county is in the midst of separate hearings to revoke Tribune-United's franchise for alleged contract violations, and earlier this month the cable company's parent firm, Tribune Co. of Chicago, announced the system's sale to Hauser Communications Co. of New York.
Gillespie said all of the companies that bid for the system, including Hauser, made the purchase contingent on similar contract changes.
The hearing examiner will make a recommendation to County Executive Charles W. Gilchrist, who must seek approval of the County Council for contract changes.