Denver Renews AT&T Broadbands Franchise

7/25/1999 8:00 PM Eastern

Denver -- AT&T Broadband & Internet Services and
city officials have settled on a new franchise that gives the MSO an incentive to
accelerate a $200 million upgrade of its local network.

The two sides have agreed on a 10-year deal that will
become effective Jan. 1, giving AT&T Broadband four years to upgrade its
112,000-subscriber system.

But as an incentive, Denver officials agreed to tack
another five years onto the franchise if AT&T Broadband completes the project within
36 months, or one full year ahead of schedule.

If the company fails to meet the four-year build-out
requirements contained in the franchise, the city can levy financial penalties totaling
$2,000 per day.

The Denver City Council approved the franchise on first
reading. A second reading will be held tonight (July 26), with public hearings tentatively
set for Aug. 16. By ordinance, the nonexclusive franchise must then go before the voters
in November.

"I feel like we got a good agreement," Denver
Office of Telecommunications director Dean Smits said. "The operator addressed and
responded to the needs of the community."

Once completed, the network will be a 750-megahertz, hybrid
fiber-coaxial system that will allow the MSO to introduce as many as 84 new analog and
digital offerings, bringing its overall programming lineup to 150 channels, AT&T
Broadband spokesman Matt Fleury said.

Its two-way capability will also allow the MSO to roll out
its high-speed Excite@Home service, while paving the way for it to begin offering local
telephone service in competition with U S West.

"This will be a system capable of carrying local phone
traffic, and that's certainly our intention," Fleury said.

He added that the new franchise reflects what the two sides
learned from surveys of AT&T Broadband's local subscribers.

"That was a critical component of all of this:
ascertaining exactly what local residents wanted," he said.

The city also gets three additional PEG-access (public,
educational and government) channels and financial support totaling $16 million over the
10-year life of the franchise, including a $3 million grant for equipment and upgrading

And AT&T Broadband agreed to adhere to existing
customer-service standards that include answering all inbound calls within 30 seconds 90
percent of the time; four-hour installation windows; 24-hour customer service seven days a
week; and follow-up calls after each installation.

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