Montgomery County officials say they will consider reopening bids on the county's troubled cable franchise or, as a last resort, operating the system themselves unless negotiations to sell the system to a new company produce an agreement soon, government sources said yesterday.
County Executive Charles W. Gilchrist and County Council members will meet in closed session this afternoon to discuss ways to salvage the county's cable television network in the wake of major layoffs on the marketing staff of Tribune-United Cable Co., which is in the third year of a 15-year contract to build and run the county system.
Gilchrist is said by associates to be "very unhappy" with failure of Tribune-United to deliver on the promises made when the company bid for the contract, which was awarded in May 1983. With an estimated 170,000 homes, many in affluent areas, Montgomery was at the time considered by industry experts to be one of the nation's most attractive cable markets.
County government staff members, in an 83-page report completed last month, strongly recommended that Gilchrist deny Tribune-United's request to cut back the scope and quality of cable service in order to satisfy demands made by Hauser Communication of New York, which has offered to buy the franchise for $40 million. Tribune-United chose Hauser late last year from five companies bidding for the franchise.
In its Feb. 17 written response to those recommendations, Tribune-United lawyers wrote: "Quite simply, the staff report is biased, unfair and taints this proceeding."
Gustave Hauser said yesterday that his company can finish building the county-wide system only if the franchise agreement is modified to reduce the scope of service, allow the use of lower-quality equipment and scaling-back of United's commitment to public services, such as a promised $50 million in grants. Tribune-United has been running well behind its proposed schedule to wire the county, and the company has said that revenues to the system have been substantially less than what had been projected in the company's proposal.
"The Tribune people are clearly reaching the end of their rope," Hauser said in a telephone interview yesterday. "It's not possible to run the system economically. That's the problem Tribune was facing and that anybody faces."
On Tuesday, Tribune-United laid off 40 of its 150 employes, most of them marketing and customer service staff. The company also closed its Rockville cable store, capping a series of actions to cut its economic losses on the incomplete system.
Michael Pohl, vice president of corporate relations for Tribune-United Cable of Montgomery County, a subsidiary of Tribune Co. of Chicago, said the company's decision to lay off one-quarter of its work force "is purely a business decision," and has nothing to do with the discussions between company and county lawyers.
He said the marketing and customer service employes were not needed because the company has stopped laying cable and wiring homes. "We have nothing to sell," he said.
Gilchrist could deny the company's request for concessions on the franchise contract, as his staff recommended, or allow the company to offer reduced service. He can deny the requests any time before April 15, but if Gilchrist accepts some concessions he must do so by March 15 in order to allow the County Council 30 days to study the amendments to the franchise agreement and vote on them.
"There are several possibilities -- it could be Hauser" who completes the system, said David P. Towey, an attorney for the County Council. " . . . It could be another cable operator, or there could be some county role in running it. The decision will have to be made by elected officals."
In the meantime, lawyers for the county and Tribune-United have been meeting in private for weeks trying to settle their differences in order to allow the transfer to Hauser. Several lawyers on both sides contacted by The Washington Post yesterday would not comment on the status of those talks.
Hauser's contract offer to buy the franchise includes a stipulation that the offer is contingent on getting certain concessions from the county. The contract expires May 31 but includes a one-month extension.
The concessions that Tribune-United has asked for include permission to wire fewer homes than agreed upon and the option of severely curtailing company funding for the county's public access operations. Under the existing agreement, the company is obligated to pay about $50 million in grants and other fees during the next 13 years.
Tribune-United also wants to extend the deadline for wiring all of the county from November of 1987 to May 1989.
Some officials remain skeptical that the county and Tribune-United will reach a settlement soon.
"I would think that [Tribune] would not let go of its staff if they were about to reach an agreement," said Ralph Malvik, executive director of the Montgomery Community Television, the nonprofit agency that runs the county's public access cable operation. "That means that Hauser would be left without a marketing department."
Despite the layoffs, service to the 21,000 cable customers in Montgomery will not stop, according to county and company officials. Pohl said the technicians who service the cable are still on staff and the service to customers will not be affected.