News

City Praises Bresnan, Shelves Cable Plans

1/11/1998 7:00 PM Eastern

A town on Michigan's Upper Peninsula has shelved plans
for a municipal video network after discovering that it's already served by the
'Cadillac' of MSOs.

Gladstone, Mich., a community of 4,565 residents on the
Lake Michigan shore, pulled back after its consultants informed the city that only 2
percent of U.S. cable viewers get better service than what's offered locally by
Bresnan Communications Co.

'I've been told that it's some of the finest
[cable] service in the country,' said city manager Brian Horst, who called Bresnan a
'Cadillac' in an industry where 'there aren't many Rolls-Royces.'

The city's reluctance to compete with Bresnan was
immediately characterized as a victory for the entire industry, which has seen a growing
number of municipal governments building their own cable systems in an effort to boost
revenues.

'It's a clear-cut victory for cable and a
powerful endorsement for Bresnan,' said Chris Horak, a spokesman for the Michigan
Cable Telecommunications Association.

A report by the city's consultant, Wisconsin-based
Power Energy Engineers, also revealed the fact that construction costs would approach $4
million, making a city-owned video network a nonpaying proposition.

Moreover, with a state-of-the-art, hybrid fiber-coaxial,
interactive-capable network, Bresnan already controls 92.2 percent of the town's
1,984 households.

'Our consultant saw that and said,'We don't
think that you want to try to compete with them,'' Horst said.

Horst said the city began looking at a municipal system
after local consumers complained about Bresnan's rates and about the system having
'too many channels of little value.'

Despite the setback, the city has not totally abandoned its
plans to try to find a niche in the cable business, he said.

Possibilities include a direct-broadcast satellite
'starter program' that would deliver service to hard-to-reach areas, or even a
partnership with Bresnan where the city would lease bandwidth on the MSO's system and
use it for municipal purposes.

'We're looking at all of our options and trying
to sort things out,' Horst said.

Bresnan officials were unavailable for comment.

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