The Montgomery County Council approved a franchise agreement yesterday with a District-based cable company that will give nine of every 10 county households a choice of cable service, some as soon as next spring.
The agreement with Starpower Communications ends Cable TV Montgomery's 16-year monopoly in Maryland's largest jurisdiction. Council members who have complained about local service and rates said competition would bring expanded programming at lower costs as two companies vie for more than 320,000 household subscribers.
The Starpower franchise requires the company to offer service to nearly 90 percent, or 287,475, of those households, a broader swath than was covered by the contract proposed five months ago by County Executive Douglas M. Duncan (D). County officials hope service can one day be offered to the entire county.
By March, Starpower officials said, Takoma Park and Silver Spring residents will be able to subscribe to their fiber-optic cable service, high-speed Internet access and telephone service. Starpower's basic cable package of 94 channels costs $31.95 a month, though the company offers discounts if "bundled" with other services.
"We think there will be broad interest in Internet and telephone service," said Anthony F. Peduto, Starpower's general manager.
Over the next six years, Starpower's Montgomery service area will expand to cover an area bound by west Bethesda, Germantown and Olney to the north and the county line to the south and east.
Starpower also has agreed to cover Gaithersburg west of Interstate 270, North Potomac and Germantown after months of negotiations with council members. The company has a separate franchise deal with the city of Gaithersburg.
The agreement is the largest for Starpower, a fledgling company half owned by Potomac Electric Power Co. The company has about 10,000 subscribers in the District and is negotiating for franchises in Northern Virginia.
Under the agreement with Montgomery, Starpower will pay the county a franchise fee equal to 5 percent of its cable revenue. An additional 3 percent of its non-Internet revenue will be used by the county to support public-access channels.
Starpower's revenue projections are confidential. But Cable TV Montgomery is projected to pay the county $10.3 million this year under its agreement, which is equal to 5 percent of its cable revenue.
Cable TV Montgomery charges about $5 more for its comparable 73-channel basic cable service. Since May, the company has been in the midst of a $65 million change to fiber-optic cable that will allow it to provide more channels, Internet access and digital television. The work is scheduled to last through 2001.
"We are focused on getting our upgrade completed so we can provide the services our customers want," said Harris Bass, senior vice president for Prime Communications, the parent company of Cable TV Montgomery. "Rates will resolve themselves."