In an Oct. 15 article on the award of a cable television franchise by Montgomery County to Tribune-United of Montgomery County, it was incorrectly reported that The Tribune Co., one of the parent firms of the winning bidder, lost $129.2 million in the first half of this year. The correct figure is $29.2 million.
Montgomery County Executive Charles W. Gilchrist awarded the county's exclusive 15-year cable television franchise yesterday to Tribune-United of Montgomery County, which has promised to wire the entire county within four years while still providing the lowest possible monthly rates.
Tribune-United, the parent company, is the nation's 11th largest cable television firm and is a joint venture of the Denver-based United Cable Television Corp. and the Chicago-based Tribune Co., which publishes the Chicago Tribune and the financially ailing New York Daily News.
Gilchrist said he selected Tribune-United from a group of three roughly equal competitors because only Tribune-United could guarantee cable service to the farthest rural points of the sprawling county. Also, he said the firm's low rates for basic cable service -- only $1.50 per month for 42 channels -- puts cable within reach of the county's low-income households.
"It is important to serve the rural areas as well as the urban," Gilchrist said, "and it is important to have a basic entertainment and information service that is affordable by almost every household."
Gilchrist, in announcing his decision at a packed afternoon press conference, said the selection was based almost entirely on the evaluations of a citizen advisory committee, an outside consultant, and the county's in-house cable project manager, John Hansman. Hansman recommended Tribune-United in late July, for precisely the same reasons Gilchrist cited.
The county will now negotiate on a specific contract with Tribune-United that will include sanctions against the company should it fail to carry out its promises. Gilchrist and Hansman said they expect the process to be completed in about 10 weeks, when the final contract will be submitted to the County Council for approval. Tribune-United officials expect to be able to hook up the first homes within a year and a half, and to wire 217,000 homes within four years, offering a variety of services from movies to home banking.
In selecting the firm, which already this year won exclusive cable franchise rights in Oakland County, Mich., and Sacramento County, Calif., Gilchrist skipped over a competing firm with 37 percent local shareholders, saying local ownership should not be a factor. His decision was a direct slap at the time-honored cable firm tradition of courting local investors to curry favor with decisionmakers by touting their community ties and accountability.
Gilchrist said the county will have enough oversight over the winning firm to negate the importance of local ownership.
But one local owner who lost his costly, high-risk cable venture angrily disagreed. R. Robert Linowes, a prominent area zoning lawyer and board chairman for Montgomery Cable Communications Inc./Times Mirror Cable Television, said: "I'm disappointed, but I'm more disappointed for Montgomery County than for MCCI/Times Mirror.
"We're here. The money would stay here," Linowes said. "With Tribune-United, it the profit is going to Denver. It's going to Chicago."
Linowes also questioned whether the winning firm may have promised more than it can accomplish, and said the firm may be overextended by having won two costly franchises this year. He cited the losses of The New York Daily News and said the United side is up for sale.
The Tribune Co. suffered a $29.7 million loss for the second quarter of this year, and a net loss of $129.2 million for the first half of 1982, according to spokeswoman Susan Warzecka in Chicago. That loss was due to "unusual costs" from a management plan to restructure operations at The New York Daily News, she said.
But at the Rockville offices of Tribune-United, where employes were celebrating the award with balloons and champagne yesterday, spokesmen dismissed the losers' complaints that their company was either overextended or unable to fulfil its commitment.
"If there were any doubt that Tribune-United could build this system, we would not have made the proposal," said franchise director Jane Simons.
"Singularly, either one of the two companies can raise more than enough money," said Michael J. Pohl, Tribune-United's director of new market development. He said the Tribune company alone has $200 million in revolving credit, while United's revolving credit account is $175 million. "It's kind of a nonissue," he said.
Also, Simons and Pohl quoted United president Gene Schneider as saying reports that United is up for sale are "pure hogwash."
Gilchrist, in announcing the award, said he was aware of the report that United was up for sale. "We have been given assurances that these rumors are not valid," he said. "There is no plan to sell United."
Another big loser was sports entrepreneur Abe Pollin, whose First County Cable firm lagged behind in the staff ranking of firms but gained widespread community support for its promises to hire blacks and other minorities and women. The firm launched a last-ditch advertising blitz in local newspaper touting its community backers.
Gilchrist said the cable franchise will bring about 300 new jobs to the county, substantially more during the construction phase. The firm has promised to begin construction in 10 locations simultaneously, once the Council approves the contract.
The county also plans to set up a nonprofit corporation to promote community use of the system. That corporation will be substantially funded with the franchise fee the firm will pay the county, about $15 million over the life of the contract.