News

King County Likely to OK TCI Deal

5/31/1998 8:00 PM Eastern

The King County (Wash.) Council will likely act within 90
days to approve a deal that calls for Tele-Communications Inc. to give rebates to
subscribers, but also allows the operator to begin its rebuild before the critical summer
construction season.

The tentative agreement centers on TCI's request for
changes in its local franchise.

King County spokesman Leslie Collins said it was likely
council members will approve the deal, which was negotiated two weeks ago, even though
they are still not satisfied.

"They're not happy with TCI, but they realize
they have to deal with a real-world situation," Collins said.

Under the deal, TCI will give subscribers credits in the
amount of $1.6 million while receiving a 12-month extension -- until March 1, 2000 -- to
complete changes to its system rebuild, or face financial penalties.

The deal includes compensation for subscribers affected by
the delay in completing the rebuild by March, 1, 1999, as required under the original
franchise. Subscribers living in areas where TCI has not rebuilt the system by then will
receive a $5 credit on their monthly bills until the job is completed.

TCI can offer the credit in the form of withholding any
rate increases the company might implement.TCI had insisted that the upgrade was put on
hold last October when county officials refused to grant a variance incorporating new
network architecture."All along, what we've wanted was to get started on our
rebuild in King County and the suburbs around Seattle," said TCI spokesman Steve
Kipps.

Kipps said the agreement will allow TCI to take advantage of the critical summer
construction season.

Collins estimated that TCI's rebuild will only reach half of the 100,000 homes in
King County by next March. "That's compensation, but it's also an incentive
because TCI does not have to pay as much [if it reaches more homes]," Collins said.
TCI will also be required to pay liquidated damages of $1 per subscriber, per month, if it
does not reach certain construction milestones along the way. It must also increase its
performance bond from $800,000 to $21 million.The agreement was negotiated with county
executive Ron Sims, who was preparing to ask the King County Council to reject TCI's
request for a 20-month delay in completing the upgrade.

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