Houlton, Maine: Town in Transition

5/05/2002 8:00 PM Eastern

Houlton, Maine, has got its wish: It's been cleared to oust its cable operator, Houlton Cable TV, now that a U.S. appeals court has dismissed pending a legal challenge.

But as the old adage says, be careful what you wish for: The town now finds itself with no transition plan to ensure that Houlton Cable will stay up and running until a new franchisee can build out its plant.

And, in an interesting twist, the dispute has pitted two small and similarly situated cable operators against one another.

Houlton's town manager did not return a half-dozen phone calls seeking comment on the situation, but the operators and news accounts said the dispute began in May 2000, during refranchise negotiations between the town and Houlton Cable's owner, NEPSK Inc.

NEPSK, a small MSO, operates area cable systems and local broadcast station WAGM-TV in Presque Isle.

In the renewal, Houlton wanted to include a requirement for high-speed data service. But NEPSK president Gordon Wark told town officials that cable-modem service wasn't financially feasible, and would cripple the 1,620-subscriber system.

"That was the majority of the issue" between the locality and Houlton Cable, Wark said.

Houlton's town council declined to renew the operator's franchise. Instead, it issued a request for proposals that led to the selection of another small MSO — Pine Tree Cablevision, owned by Pennsylvania-based Pine State Management Inc. Pine Tree operates small systems in Maine, New Hampshire and South Carolina.

Pine Tree proposes to build an 862-megahertz plant and anticipates launching its own data service, called PTX or Pine Tree Express, said general partner Walter Kemmerer.

"But ever since I got the franchise, Houlton's been in court," said Kemmerer.

NEPSK sued the city, claiming the town improperly denied the franchise without giving legitimate reasons.

Last summer, the case was dismissed by Magistrate Margaret Kravchuk in U.S. District Court in Bangor. NEPSK then appealed to the First U.S. Circuit Court of Appeals in Boston.

NEPSK's appeal was dismissed in mid-March. Wark asserts that's because his company missed some filing dates with the court.


Once the legal challenge was dismissed, city attorneys sent Houlton Cable a cease-and-desist letter. Because of that action, Wark said, he could have shut the system down on March 30, but decided against it.

The franchise loss has affected NEPSK's finances. Not only was it forced to contest the lawsuit, but it's losing customers in other towns, who believe the problems in Houlton will affect systems elsewhere.

The legal mess has prompted 30 subscribers to cancel service, said Wark, half of whom are from outside Houlton. Those customers said they have bought satellite dishes, Wark said.

To cut the confusion, NEPSK is changing the name of its cable systems to Polaris Cable Services, said Wark.

The Houlton system is continuing to operate without a franchise, said Wark, and NEPSK is also readying an application for a competitive franchise. If the city refuses — and Houlton Cable goes dark —"we lose the value of the plant, and then we're talking damages," he said.

The competitive franchise bid will include a proposal for high-speed data via open access. Wark hopes to partner with three local wireless high-speed data providers who've started up in the city since the franchising row began.

Pine Tree's Kemmerer just wants an orderly transition. A second franchise is fine, but Pine Tree wants to get up and running first, he said.

Kemmerer's MSO serves 26 small communities in the region. Houlton's 32 miles of plant passes 50 customers per mile and "makes me feel like I'm in a big city," he joked.

Said Kemmerer: "Me, my bank and my lawyer just want an orderly transition."

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