Montgomery County's cable television company, in what county officials call a major breach of its contract, has halted all construction on the cable system, a move that the officials said yesterday could mean indefinite delays in the delivery of cable service to thousands of county residents.
Alexander J. Greene, an assistant to County Executive Charles Gilchrist, said yesterday that the county learned of the work stoppage last week after all six contractors building the system reported that they had been ordered to stop work by Tribune-United Cable Co.
"This is of major concern to us. It doesn't look like they can meet their schedules . . . and we're not happy about it," Greene said. About 70,000 of the county's 228,000 homes are now able to receive cable service, but 20,000 have not been contacted by company salespeople, so the residents have been unable to sign up, according to a Tribune-United spokesman.
William Hussmann, chairman of the county's Cable Communications Advisory Committee, said, "For people who are in close-in areas of the county where construction is scheduled . . . it looks like they are in for a substantial delay. For people who are in outlying areas it is questionable at this point whether Tribune-United intends to wire the whole county."
The county is preparing a detailed analysis of the situation that will be used as a basis to declare the company in default on its contract to build and operate the system, Greene added.
Michael Pohl, a Tribune-United spokesman, acknowledged yesterday that the company had stopped building new segments of the system, but he sharply disputed the county's contention that it had failed to meet its commitment to provide service.
"It's my firm belief that we are substantially in compliance with the bench marks for service as they exist today," he declared.
Pohl said the work stoppage was caused by a shortage of equipment to wire individual homes.
Under the terms of its contract, Tribune-United is required to wire the county in four phases. It was supposed to finish the first phase, which includes densely populated areas of Silver Spring, Bethesda and Rockville, in May of this year.
But according to a series of letters obtained by The Washington Post outlining the latest cable controversy, "signficant areas" covered under phase one either have not been wired or have not been activated for service.
In addition, according to the letters, the company has made no effort to extend the system to Poolesville, Olney and Damascus, which are slated to be wired by the end of the year under phase two of the construction schedule.
Pohl said the company is soliciting about 1,500 homes a week for services and is adding about 600 subscribers a week.
"The delivery of equipment is such that we can't do any more than that," he said. "Why put your assets in the air if you can't use them?"
The work stoppage comes only a week after officials of Tribune-United revealed that they had asked the county for major contract concessions to stem serious financial losses that would result if the system were built according to the present contract.
Tribune-United negotiated the contract after winning the franchise two years ago in intense competition against eight firms.
It promised to deliver more than 100 channels of cable television programming and an extensive package of public services that included a flagship county channel, municipal channels for Rockville and Takoma Park, educational and governmental access channels and an institutional network for county businesses.
Tribune-United was one of two firms that promised to wire the entire county for service.
The Gilchrist administration during the last several months has been tangled in a series of disputes over alleged cable contract breaches.
The latest controversy over the system's construction raised new questions yesterday about the commitment of the parent firm, the Tribune Co. of Chicago, to continue building the system while it seeks a buyer for its cable television holdings.
A renegotiation of the local contract is crucial to the success of that sales effort, the broker who is handling the sale said yesterday.
"There is no way either [Tribune-United] or a new buyer can make money on that system. If the system isn't going to be profitable, then it can't be maintained . . . and you can't provide quality service to the community," said Jay R. Bush, senior vice president of Daniels and Associates, a Denver investment and brokerage firm that is handling the sale.
"It's unreasonable for the county to expect to get the full level of commitment made in that franchise," he said.
"I think the county is in for a period of difficult negotiations," agreed Hussmann, whose cable advisory committee is overseeing the system's development.
County officials became suspicious that Tribune-United was engaging in a work slowdown during the summer after the company repeatedly failed to deliver progress reports on its work, Greene said.
The county dispatched inspectors to check on the company's construction crews and could not find them. They polled the contractors last week and learned that Tribune-United had ordered them off the job, he said.
In an Oct. 24 memorandum to the committee, Greene wrote, "We have confirmed what we suspected; there has been first a slowdown in construction and now a complete halt . . . . We are now preparing a detailed analysis on which to base a formal notice of default."
Pohl said the company plans to meet with county officials next week and will present an up-to-date accounting of its construction efforts that will show substantial compliance with the contract.
"Regardless of whether the system is for sale or not, we would be proceeding as we are now," he said.