News

WINfirst Must Wait First in L.A.

5/25/2001 12:38 PM Eastern

The backers of the first citywide franchise for Los Angeles will have to wait
at least two weeks longer for preliminary approval while regulators get a
consultant's report on the financial viability of the venture.

Western Integrated Networks LLC, which will do business in the area as
WINfirst, anticipates passing 1.5 million homes in the 13 franchises that serve
the city. But incumbent operators asserted that the company -- which already has
eight franchises and is under construction in Sacramento, Calif. -- is
'overextended by a factor of two.'

The incumbents faulted WIN's business plan, which calls for its build-out to
be funded from cash flow from the high-income areas where it intends to launch
the build.

The competitor needs about 30 percent penetration to be viable, according to
its consultants, and current operators in WIN's launch area noted that incumbent
AT&T Broadband barely has that penetration now. This means WIN would have to
cannibalize all of AT&T Broadband's customers in that area or find more than
100,000 new customers just in that franchise area.

Other competitors are waiting in the wings. RCN Corp. has applications
pending for five franchise areas, and Altrio Communications Inc. seeks one. If
all earn approval, some areas will have a choice of three cable
providers.

March