AT&T Gets Franchise -- and Standards

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Annoyed about anticipating its third cable operator in nine
months, the city of Fort Worth, Texas, dropped plans for a three-year moratorium on
franchise transfers.

Instead, it approved the transfer of 70,000 local Charter
Communications Inc. subscribers to AT&T Broadband & Internet Services -- along
with some of the nation's toughest customer-service standards.

"We decided that as long as a company is committed to
our service standards -- and paying huge fines when they screw up -- who provides the
service isn't as important," Fort Worth assistant city manager Pat Svacina said.

The city began considering a three-year prohibition on
transfers of its cable franchise after learning that Charter planned to swap area systems
serving 200,000 subscribers, including Fort Worth, to AT&T Broadband.

Charter vice president Dave Barford admitted that enactment
of the ordinance could have hampered the overall deal between the two MSOs.

Barford traveled to Fort Worth, where he reminded local
officials that Congress dropped a national three-year waiting period on cable-franchise
transfers when it passed the Telecommunications Act of 1996.

"We reminded the city that they had the right to
review the legal, technical and financial qualifications of the new operator -- that
there's a process for this, and we should let the process work," Barford said.

Barford added that the city was likely looking for leverage
to ensure that recent service improvements would continue under AT&T Broadband.

Svacina said the city was reacting to an industry
consolidation frenzy that has bounced Fort Worth from Marcus Cable to Charter and then to
AT&T Broadband in less than a year.

The City Council was also reluctant to lose Charter, which
has dramatically improved customer service since taking over for Marcus last March.

"We hate to lose them," Svacina said. "These
folks have done what they said they would do. I've met with AT&T representatives
and told them I expect them to live up to every bit of those customer-service
standards."

Svacina added that AT&T Broadband officials have
indicated that they expect to meet the city's standards.

After years of dealing with service complaints aimed at
Marcus, a consortium of 20 Fort Worth-area municipalities demanded a stiff set of service
guidelines before agreeing to transfer their systems to Charter last year. AT&T
Broadband inherits those guidelines.

Failure to comply will result in a $1-per-subscriber fine,
or $200,000 for all 20 cities. The fines escalate to $3 per subscriber, or $600,000, for a
third infraction.

The deal, however, provides AT&T Broadband with a
performance incentive by dropping the first-time fine to 25 cents per subscriber after
three years of good service.

Other requirements include: making customer-service
representatives available seven days per week, 24 hours per day; answering 90 percent of
inbound calls within 30 seconds, as required by National Cable Television Association
standards; and repairing service interruptions within 24 hours.

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