News

Denver Overbuilder Heads for Ballot

5/28/2000 8:00 PM Eastern

Denver-Local voters will decide whether WideOpenWest LLC will compete for 116,000 area cable subscribers currently served by AT & T Broadband.

On second reading, the Denver City Council last week unanimously approved a 10-year franchise for WOW, a locally based start-up with plans for offering cable, Internet and telephone services to dozens of area communities.

"It's an unprecedented situation," said Dean Smits, director of the Denver Office of Telecommunications. "We've always had a de facto monopoly. Our citizens have never had a choice of providers. Now they will."

The measure now goes on the Aug. 8 primary ballot, setting the stage for a showdown sometime next year between WOW and AT & T Broadband.

"We enthusiastically look forward to the election," WOW president Mark Haverkate said. "We are confident that Denver residents want quality and affordable high-speed Internet connections, along with a competitive choice for cable-television and telephone services. WideOpenWest will make sure there will be more than enough broadband capacity to provide these services and others to all Denver residents for many years to come."

The company has already been granted franchises in the Denver suburbs of Jefferson County, Aurora and Greenwood Village, and it has also passed the first City Council franchise reading in nearby Boulder.

WOW spokesman Mike Steinkirchner said the overbuilder plans an advertising campaign that will educate Denver voters on the value of competition.

"We want to make sure voters understand the benefits we'll bring to the market," he said, adding that the first customer could come online by next spring. "We're ready to go. We're going to take it to the voters, and we fully expect them to approve."

Once the voters approve its franchise, WOW will immediately begin construction on a network that will pass 243,000 homes and is projected to cost $200 million.

Meanwhile, AT & T Broadband-which is in the midst of a $200 million upgrade of its metro-area network-believes it has a leg up on the competition.

"From a competitive standpoint, WideOpenWest's five-year build-out term assures AT & T's continued leadership in this community because it falls years behind our plan to offer voice, video and data throughout [the metro area]," AT & T Broadband spokesman Matt Fleury said.

AT & T Broadband has already completed the first phase of its upgrade, introducing dozens of new cable channels in west Denver and launching residential telephone service in Aurora.

Smits said the WOW franchise contains a clause granting the company a five-year extension if it meets specific construction deadlines during each of the deal's first five years.

"It's not like they can miss the construction criteria in the first two years, then make it up in the last three," Smits added. "That will not be acceptable."

As usual, WOW has agreed to provide open access to area Internet-service providers seeking to offer high-speed services to local consumers-a concept AT & T Broadband is opposing nationwide.

Even so, WOW's willingness to allow competitors onto its network may force AT & T Broadband's hand. "I think this is going to be a perfect example of the marketplace driving the final outcome," Smits said.

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