Adelphia Overbuild Buy Irks Cities


Some Ventura County, Calif., municipalities have hired lawyers to help decide whether to contest Adelphia Communications Corp.'s acquisition of several Verizon Communications systems.

Adelphia has purchased the telco's overbuild systems in Thousand Oaks, Camarillo, Oxnard and Port Hueneme, Calif. — localities where it is the incumbent. It will also buy a Verizon property in Pinellas County, Fla., that competes with Time Warner Cable.

In California, Adelphia would be eliminating a competitor — and buying a plant upgrade in the process.

"It's a real win-win for our customers, the community and the city," said Adelphia Southern California vice president Lee Perron.

Adelphia purchased AT&T Broadband's system in Ventura County, just northeast of Los Angeles, two years ago. The system it inherited was technically out of date.

Verizon's newer plant has 750-megahertz capacity and is two-way capable.

Adelphia intends to absorb Verizon's customers, then wreck out the aging former AT&T plant — eliminating the need for a two-year rebuild, as well as the inherent disruptions that would cause.

The Verizon plant will allow Adelphia to rapidly deliver 70 new channels and to expand cable-modem service, which the telco already offers.

Perron said Adelphia won't raise prices for the added cable channels — at least not this year.

Along with eliminating competition, the deal could violate the terms of the local franchises, according to letters Thousand Oaks sent to each company.

Verizon must give the city 60 days written notice if it intends to "abandon" its plant. Should the vendor decide to leave the city, the plant must be removed or deeded to the town, according to a letter sent to Verizon's local manager, in which Thousand Oaks said the telco was in "serious material breach" of its local agreement.

Instead of 60 days' notice, the city was called to an "impromptu meeting" Feb. 28 — after the deal was already done — said assistant city attorney Jason Alcala.

"We were shocked, to say the least," he said.

Thousand Oaks also took issue with a large number of permits that Adelphia had recently sought — which it took as evidence that the MSO was about to launch an upgrade without first obtaining municipal permission.

The cities hired Bill Marticorena, a prominent cable consultant and attorney, to weigh a challenge.

Prior attempts by operators to make such acquisitions as asset sales — which don't require franchise transfers — have met with varied success.

Three years ago, Adelphia tried to convince regulators in Moreno Valley, Calif., that its purchase of 75 percent of the local system did not need government approval because of a management agreement with AT&T Broadband.

That dispute ended up in court. Adelphia ultimately agreed this year to provide additional support for access channels and to rebuild the system.