Angry Seattle May Challenge TCI

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The city of Seattle was weighing its options last week, in
the wake of Tele-Communications Inc.'s failure to meet the deadline for upgrading its
local network.

Angry City Council members were reportedly studying
everything from terminating TCI's franchise to possibly launching a municipal
overbuild of the MSO.

"The possibility exists for initiating a termination
process for a breach of the franchise," said Steve Holmes, director of the Seattle
Office of Cable Communications. "And this is a breach of the franchise."

TCI Cablevision recently informed local officials that it
will not make this week's deadline for completing the project, requesting up to nine
additional months to upgrade portions of its network serving some 60,000 of its 140,000
area cable subscribers.

The city is not scheduled to vote on the company's
extension request until next month.

Local TCI officials conceded that the MSO had gotten a late
start on the job after it put construction plans on hold in 1996, while it was studying
the possibility of substituting digital compression for more expensive upgrades.

"We knew going in that this upgrade schedule was an
aggressive one, and that everything would have to work perfectly to meet it. But we simply
got started too late," said Steve Kipp, a Seattle-based TCI spokesman.

As a result, TCI has indicated that it will readily pay the
$10,000-per-month fine that is called for in its franchise.

Meanwhile, another option for the city is to negotiate a
package of credits, services or rebates that would be doled out to consumers until the
rebuild is completed, Holmes said.

"We're looking at other jurisdictions that have
had similar problems," Holmes added. "I'm aware that Aurora, Colo.,
recently negotiated a settlement over its own rebuild problems."

But whether city officials are in the mood to settle may be
problematic.

On Jan. 4, local officials received a briefing from
representatives of Click! Network, a competitive cable system launched last year by the
city of Tacoma, Wash., through its municipal electrical utility, Tacoma City Light.

"[The council] certainly had an interest in the
project, and I suspect that we're going to be directed to look further into it,"
Holmes said.

The council has also held hearings on TCI's customer
service in the wake of calls from consumers indicating that "it's time to get
somebody else," Holmes added.

Meanwhile, the Seattle Post-Intelligencer has thrown
its support behind a municipal overbuild.

In a recent editorial, the newspaper said a municipally
owned network could operate a low-cost system that would serve schools, libraries and
community centers, "priced in the context of a public-service ethic, rather than a
profit motive."

"TCI's record of broken promises rivaling that of
Saddam Hussein is not going to change, despite its mea culpas," the paper said.

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