Charter Faces Falcon Delay

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Los Angeles -- Poor performance by a Falcon Communications
Inc. operation may delay transfer of the system in Suffolk, Va., to Charter
Communications.

City officials voted last week to extend negotiations to
Dec. 17, rather than taking a vote that could have blocked the transfer. Charter agreed to
buy Falcon, which has about 1 million subscribers, for around $3.6 billion in May.

Council members said the 60,000 residents have tolerated
outages and poor picture quality for years. As a result, some regulators want the city to
hold out for a written agreement that will ensure the community an improved plant. Charter
officials have asserted that improvements will happen, but regulators want specifics, in
writing.

The franchise, signed by Falcon in 1986, did not anticipate
the progress made in the telecommunications industry. Indeed, the document requires little
of the operator in terms of video-only improvements.

But now, with the deployment of high-speed-data access,
city officials want a commitment that their residents can benefit from the latest
technology. Falcon currently passes 18,145 homes, fewer than 10,000 of which are
subscribers, according to industry statistics.

Regulators asserted that Falcon promised in February to
extend its plant to 1,200 unserved homes in the region. Also, they want a written
guarantee that Charter will rebuild the 15-year-old cable system to a higher-capacity
network supporting high-speed data.

Falcon officials said the system meets federal standards
for customer service, but city officials want data supporting that claim.

Mark Biberdorf, senior administrative analyst for the city,
said residents were invited to call a city help line, initially dedicated to offer help
with other neighborhood problems, if they have a problem with Falcon.

"The majority of calls during the past couple of years
have been about Falcon," he said. He added that the city then faxes the complaint to
the operator, and Falcon has "been pretty good" about responding to those
complaints.

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