The president of Tele-Communications Inc., the national cable firm that has offered to put up at least $30 million to fund construction of the District's cable television system, said yesterday that his company probably will pull out of the project if the city insists that every home be wired for cable.
"If they want a hell-or-high-water deal that every home in the city will be wired then we are probably not going to have a deal here," John C. Malone said in an interview. " . . . It would be foolish on my part to make a commitment."
Betty Ann Kane (D-At Large), chairman of the council's cable television committee, said city officials will insist that TCI and District Cablevision Inc., the local firm holding the contract, agree by Oct. 7 to wire the entire city or face losing the franchise.
"If there is no commitment to universal wiring then there is no deal," Kane said. "The mayor made that clear also. The council made that clear. That was everybody on the council's bottom line when we voted."
TCI offered to bail District Cablevision out of its financial difficulties if the city adopted a $32 million package of modifications to the cable agreement and the company could negotiate an acceptable agreement with the Chesapeake & Potomac Telephone Co. to build the system.
Earlier this month, the City Council granted a number of financial concessions sought by District Cablevision, under 90-day emergency legislation, and gave the firm until early October to prove it can obtain the necessary financing. Those contract modifications, however, do not include any relief from the requirement for citywide cable service.
Malone said that TCI, the nation's largest cable operator, is considering funding the construction of cable systems in Baltimore, Detroit and other cities. "I don't believe at this stage that TCI needs Washington, D.C. Washington, D.C., may need TCI."
Also yesterday, District Cablevision President Robert L. Johnson accused a former rival for the franchise of "blackmail" and said that that company's $23 million suit filed Monday is an attempt to interfere with District Cablevision's efforts to obtain financing to build the cable system.
The suit charged District Cablevision and TCI with making "fraudulent representations" in its proposals to operate the franchise. The effect of the modifications requested of the council, the suit alleges, "is to substitute a completely new franchise agreement" for the one District Cablevision signed in February.
At a press conference at his Georgetown office, Johnson produced a letter he said was written in August by Early D. Monroe Jr., president of District Telecommunications.
In the letter District Telecomunications asked for an interest in District Cablevision, one-third representation on the board, money to cover District Telecommunications' expenses and control over 35 percent of the subcontract work on the system.
Johnson said the letter was an example of an earlier attempt to use the threat of a lawsuit to gain the assets of his company. He said he was releasing it "to show the people of Washington, D.C., the kind of company we are dealing with and their attempts to blackmail DCI."
Monroe declined comment.
Charles E. Tate, chairman of District Telecommunications, said he didn't recall the letter but said his company stood by the allegations contained in its suit. "No matter how much he may rant and rave, they are going to have to respond to these charges," he said.
Saying District Cablevision would "vigorously oppose" the suit, Johnson characterized it as "a very ludicrous and feeble attempt at blackmail and an attempt to forestall the process at a time when we are in critical negotiations with the city."
In discussing the current proposal for building a cable television system in the District, Malone of TCI said his company does not know how much it would cost to wire every District home and is "afraid of making any absolute commitment to universal service." Some sections of the city, he said, might be too expensive to wire.
"If it cost $3 million to wire 25 homes it would be absolutely absurb for the city to require us to make that kind of investment because we would have to recover it from the rest of the city," Malone said.
Kane characterized TCI as a "hard-nosed, no-frills" company that believes in the bottom line. "If it is a bluff, if it is a negotiating stance, I wouldn't want to comment what it bodes," she said.
Johnson said his firm intends to persuade the City Council and Malone in September that District Cablevision has the ability to wire the entire city at a reasonable cost. However, he also insisted that District Cablevision be granted some provision allowing the company to seek relief if it runs into major economic difficulties while wiring the city.
C&P, which has a contract with District Cablevision to construct the system, is expected to conduct a study to determine the cost of wiring the entire city for cable. Malone said he does not expect the study to be completed before the council votes this fall. Johnson said the study will be completed.