The D.C. City Council approved a number of concessions to District Cablevision Inc. yesterday to help the firm raise enough money to build a cable television system here, but rejected a provision that might have freed the company from having to wire the entire city.
The council, seeking to salvage the District's troubled cable franchise, in effect postponed taking final action for 90 days, to give the firm time to demonstrate that it can obtain the necessary financing. Otherwise, it could face the loss of its 15-year franchise agreement with the city.
District Cablevision President Robert L. Johnson said he was "very pleased" with the council's emergency legislation, approved by a vote of 11 to 1, that incorporates most of the modifications sought by the firm. But he added that his company still wants a provision allowing it to seek future relief if it encounters major economic problems in building the system.
Council member Betty Ann Kane (D-At Large), who introduced the measure as a compromise version of a bill submitted Monday by Mayor Marion Barry, said the council's action represents a "good-faith" effort on the part of the city and is the council's "bottom line."
Adoption of the emergency legislation, which will remain in effect for 90 days, capped several weeks of debate and intense negotiations over District Cablevision's request for a package of modifications that would save the firm $32 million.
District Cablevision said it needed changes in the franchise agreement, which it signed last February, to make the proposed cable system economically viable and to secure financing from Tele-Communications Inc., the nation's largest cable operator. District Cablevision officials said that TCI was prepared to put up at least $30 million to fund the cable project.
Under federal cable law, the council must respond to requests for changes in the terms of the franchise by deciding whether those terms are commercially impracticable.
Barry said after the council's action that the compromise bill is "workable" and will bring cable to the District. "We've waited this long; another 90 days won't kill us," he said.
The modifications included in the legislation would allow District Cablevision to reduce the number of residential channels from 78 to 54, eliminate some of its financial commitments to community and municipal programming and revise its schedule of payments to the city.
Under the legislation, District Cablevision would be required to supply the council with a firm construction schedule detailing neighborhood-by-neighborhood wiring plans under the company's modified construction schedule. By Sept. 1, the cable firm also would have to supply the council with legally binding agreements with TCI and the Chesapeake & Potomac Telephone Co., which has a contract to build, maintain and own the cable transport lines.
District Cablevision and TCI insisted that they needed some type of escape clause that would allow them to seek modifications if the system was no longer economically viable or there was not a reasonable rate of return, but no such provision was included in the council legislation.
In fact, the council eliminated several controversial modifications that some members argued could mean that some homes in the city would not be wired for cable.
Excluded from the emergency legislation were proposed modifications that would have limited District Cablevision's capital construction costs to an average of $500 per unit, exempted the company from wiring buildings that had a competing technology if it was too costly, and permitted the company to charge an additional fee for nonstandard installations.
Johnson said he is confident that once the council is provided with a construction schedule and agreements with C&P and TCI, it will be "receptive to our position on economic viability and give us the modifications necessary to make cable viable."
TCI vice president John Sie said his company needs time to review the emergency legislation before it makes a decision on whether it will provide funding for the District's cable system.
"I'm glad the city passed legislation of some sort," Sie said. "That's a positive sign. But I'm not saying whether we will play or not, get in or stay out."
Barry said that he believes that District Cablevision and TCI had made a mistake by introducing the $500 cap. "I gave them a little advice," Barry said. " . . . Stop talking about the $500."
Carol Schwartz (R-At Large), the only council member who voted against the cable legislation, said she could not justify granting the changes and that it was time for the city to tell District Cablevision "to live up to its promises."
However, other members maintained that the council's cable television committee did a good job in responding to the modifications and that it will be up to District Cablevision to demonstrate that it can build a cable system.