News

New TCI GM in D.C. Hot Seat

1/11/1998 7:00 PM Eastern

Washington -- At a community meeting last month to discuss
the franchise renewal of the local Tele-Communications Inc. affiliate, District of
Columbia residents recited a long list of complaints to cable regulators and to Mayor
Marion Barry.

Spanish-speaking customers asked why, in a city with a
large Hispanic population, there is only one Spanish-language station on the D.C. system.
Other residents complained that VH1 is only available for part of the day, and that the
system doesn't provide popular channels such as Comedy Central, ESPN2 and The
Nashville Network.

Customers also complained about service interruption, rate
increases and repair and installation delays.

Sitting in the hot seat was Brad Anderson, who had just
been named general manager of District Cablevision.

Receiving complaints about programming and customer service
is standard at any cable system, but District is not typical. First of all, it is located
in Washington, D.C., home to many powerful cable viewers. Paradoxically, District has a
reputation as one of the worst affiliates in the TCI system.

Every month, the D.C. Office of Cable Television collects a
steady stream of complaints about District. For August, September and October, the office
received a total of 340 complaints. In comparison, the suburban governments surrounding
D.C. average 10 to 55 complaints per month.

But Anderson, who started running District at the end of
November, said he is upbeat about his new job. He said he brings a 'fresh set of eyes
to an established culture.'

Along with Anderson's appointment as general manager,
TCI has put the system's operations under the oversight of TCI Communications
Inc.'s chief operating officer, Marvin Jones.

BETTER THAN IT LOOKS

'I am favorably surprised and impressed. I had read
things about this cable system, but what I have found is that reality is better than
perception,' said Anderson, former CEO and general manager of the Cable
Communications Co-Operative in Palo Alto, Calif. Anderson also worked for Viacom Inc. for
13 years.

For example, earlier this year, District had a huge backlog
of 6,000 customers waiting to get their cable installed. At one point, people had to wait
more than 30 days for installation. But that problem has, for the most part, been taken
care of, said Anderson in an interview in December. The wait for installations is down to
a more acceptable two to six days.

But how is TCI faring with those that matter, the local
regulators?

Linda Wharton-Boyd, acting director of the D.C. Office of
Cable Television, said it is still too early to assess District's new management.

'I look forward to working with District Cablevision
on resolving outstanding issues,' said Wharton-Boyd, who has been acting director of
the agency since the end of September.

One issue, said Doreen Thompson, executive director of the
Office of Cable Television from 1995 until this fall, is system upgrades. During her
tenure as D.C.'s chief cable regulator, Thompson said, District never upgraded the
system to the capacity called for in the franchise agreement.

The franchise agreement, Thompson said, called for an
upgrade to 79 channels when the technology became both viable and economically feasible.
While the technology is certainly viable, she said, District maintained that an upgrade
would be economically prohibitive. The system has 66 channels.

The system is operating above capacity, Anderson said,
transmitting five channels more than it was designed to supply.

While Anderson said there are no plans to upgrade the
system in the near future, the issue of channel capacity is certain to be a big one during
franchise-agreement talks with the D.C. government. The agreement expires in 2000, and
discussions have just begun.

Anderson acknowledged that he will have to address a number
of problems at District Cablevision.

Complicating matters for both the cable company and its
regulators is the rampant cable piracy in Washington. While District has 98,000 customers,
some media reports estimated that 70,000 people were stealing cable in D.C. The piracy
hurts not only TCI, but the city, which misses out on millions of dollars in franchise
fees.

Anderson said a key way to tackle unauthorized cable use is
to make sure that the system disconnects customers who have canceled service in a timely
manner.

IMAGE COUNTS

Anderson said the operator must first change the way that
people look at District.

'We have to raise the perception of the system to
match the current reality, because the current reality is better than the former
reality,' he said. 'We have made the system better.'

How the system is perceived is important because unlike any
other cable operator, District works in the same city as Congress and the Federal
Communications Commission.

This fall, several hearings were held in both Senate and
House committees about the increase in cable rates since the enactment of the
Telecommunications Act of 1996. Lawmaker after lawmaker expressed outrage that cable rates
are going up at a time when competition is supposed to be driving prices down.

The Consumer's Union cited District's rate
increases in the petition that it filed with the FCC earlier this fall, asking the agency
to freeze cable rates. The consumer group noted that cable rates in Washington increased
at almost triple the rate of inflation in 1996.

Anderson said he is aware of the importance and
responsibility of District's location.

'I want us to be the best representative of our
industry, period. And because of our location, I think it is critical that we are the

best,' he said.

COMPETITION COMING

The tricky task of making District the best will become
even more difficult as Washington becomes a more competitive cable market.

RCN Corp. has plans to launch open-video system service
with the local electric company, Potomac Electric Power Co., in 1998.

The companies will begin providing local phone service
early in the year, and they plan to offer cable services by midyear, said RCN spokesman
Jim Maiella.

RCN's 105-channel cable system will not initially be
available in all areas of the city, but 66-channel District is still sure to feel the
pinch.

But Anderson said he was confident of District's
ability to operate and succeed in a competitive situation. And he has some experience
delving into new markets: Anderson implemented cable-modem service at his last post in
California.

'I think that we have to begin operating our system
under criteria that would not be any different if we were in a competitive situation -- in
preparation for competition,' Anderson said.

States News Service

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