The Chesapeake & Potomac Telephone Co., which has expressed interest in developing a cable television system in Washington, also is negotiating to gain part ownership or agreements to perform construction work with cable firms in Fairfax County, Baltimore and Baltimore County.
C&P officials described their moves yesterday as part of an effort by local telephone companies nationwide to find new sources of revenue in anticipation of the scheduled breakup of the American Telephone and Telegraph Co. next January.
"There's no way of forecasting revenues at this time," said Bernard R. Jacobs, C&P general manager for industrial sales, who confirmed yesterday that the company has held negotiations with Media General in Fairfax and Caltec Cablevision, which holds cable franchise rights in Baltimore and Baltimore County.
C&P, with its existing construction and maintenance facilities, could speed development of cable systems, industry experts said. The development of cable has been particularly slow in Washington, which is far behind other area jurisdictions and is still trying to establish guidelines for potential franchise bidders.
While profits that C&P would realize from cable ventures could help hold down telephone rates, some industry and government officials cautioned that C&P could develop political problems if it is seen as trying to squeeze out smaller communications firms, particularly those that are owned or run by minorities--an important distinction to officials in some jurisdictions, especially the District.
C&P stands to benefit substantially if it is able to use some of the sophisticated cable channels for the growing and highly profitable business of data transmission. One cable video channel could be used for as many as 30 data-transmission channels, according to cable officials.
C&P officials said earlier this week that their interest in cable for the District is only in the "concept" stage.
In a letter to the D.C. Cable Design Commission, which is exploring approaches to cable television for the D.C. City Council, C&P offered to build and maintain a cable system but not get involved in programming or direct ownership, which would still be prohibited after divestiture, officials said.
Representatives of Media General said yesterday the telephone company offered to play a larger role in Fairfax County during recent discussions about routine leasing of telephone pole space to carry Media General's cable lines.
" C&P brought up the suggestion, 'Why don't we build it, own it and lease it back to you?' " said Sam Jernigan, president of Media General Cable, a subsidiary of the Richmond-based Media General publishing and broadcasting firm.
Jernigan said his company is still studying the C&P offer but indicated it may be turned down.
"Historically, Media General is a company that likes to control its own destiny.Media General had projected they would build this system themselves and supply the funding for it. They still feel very strongly about maintaining control," Jernigan said.
Dr. Leonard Berger, president and chief operating officer of Caltec Cablevision of Baltimore, said his company has had "some initial conversations with some of their C&P marketing people about possibly doing some construction and lease-back of part, if not all, of the system in Baltimore city."
Although Berger said C&P's move "makes a lot of sense," he indicated his firm may be too far along in construction to reach agreement with the telephone company.
"It probably would decrease their costs and serve to create some savings on the telephone bills in the Washington area," Berger said. But he added that Caltec has nearly completed wiring its 1,100 miles of cable in Baltimore County and plans to begin construction in Baltimore soon.
"We are trying to move as rapidly as possible," Berger said. "They C&P) have been rather slow, we'll probably go without them."