Comcast Corp. has put in the winning bid to buy the financially strapped municipal cable operation run by Alameda Power & Telecom in the San Francisco Bay Area.
According to a report this week by the muni, Comcast will pay $15 million for the system, which has 9,500 video customers and 6,600 data customers in the community east across the bay from San Francisco.
The municipal utility, which began as an electric company, launched video services in 2001 to leverage its existing infrastructure. However, the cable utility funded its plant and operations with revenue bond anticipation notes. A balloon payment is due next June on those notes of $35 million.
According to the utility, it attempted this year to refinance the notes and was unable to alter the terms. The utility also considered borrowing $2 million more from the city's general fund to finance the addition of telephony infrastructure so it could increase income through the sale of telephone services. However, that option was rejected.
Comcast already provides competition to Alameda Power & Telecom and is the dominant triple-play provider in the San Francisco Bay Area.
According to a report at the utility's Web site, 95% of the cable operation's note holders have agreed to the sale of the system. The city council will consider the sale recommendation to Comcast on Nov. 17.