Ex-InterMedia Execs Hop to Overbuilder

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Yet another privately financed overbuilder surfaced last week and said it plans to build telecommunications networks to challenge the likes of Charter Communications Inc. in Southern California.

Altrio Communications Inc., headed by the former executive management team at InterMedia Partners, is eyeing 600,000 households in Los Angeles, Ventura and Orange County.

The Los Angeles-based startup last week asked the Federal Communications Commission for an open video-system license allowing it to enter the Southern California market. It has also informed "hundreds" of area communities of its intentions.

"We'll be working with the communities on OVS agreements, or traditional cable franchises where it seems appropriate," Altrio chief executive officer Dave Rozzelle said.

Rozzelle said the company had closed on $125 million in equity funding from an investor group headed by Frontenac Co. and Bessemer Holdings. The group also includes Soros Private Equity Partners, SSB Capital Partners, Bank America Capital Investors and Grove Street Advisors.

The investors have also committed to supply additional funding equal to, or greater than, the initial investment. In the meantime, Altrio plans to raise an additional $125 million in debt. "We're coming out of the gate fully funded," Rozzelle said.

Initially, Altrio plans a hybrid-fiber coaxial network with 125 homes per node. Over time, however, it will evolve into a fiber-to-the-home network, Rozzelle said.

Joining Rozzelle at Altrio are chief financial officer Ted Liebst and chief technical officer David Large. The three were among the original team that helped take InterMedia Partners, under deal-making CEO Leo J. Hindery Jr., from zero to 750,000 subscribers in 30 months.

Southern California "is a big market, an attractive market, and one we know very well and feel comfortable with," he said. "We have a chance to apply the expertise we gained at InterMedia."

Though Altrio had told "hundreds" of localities about its intention to enter their markets, Rozzelle said, officials in the company's new hometown of Glendale and in neighboring Burbank, were still in the dark as of late last week.

Officials there said a potential overbuilder-named either Winstar or Winfirst-had contacted both legal departments to gauge the city's expectations. Neither city would comment on another overbuilder until they saw a formal proposal. Officials in Los Angeles did not return calls requesting comment.

At Charter, which serves both Glendale and Burbank, the sentiment was: Bring 'em on.

Charter offers a 200-channel lineup in those communities, has deployed Charter Pipeline high-speed data service and is about to roll out video-on-demand.

Elsewhere, Philadelphia-based Digital Access Inc. continued to grow in Wisconsin, at least on paper. It added franchises for an additional 5,500 Milwaukee-area households.

And in Tennessee, Georgia-based Knology Inc. picked up franchises in Nashville and Davidson County to go along with earlier deals in Knoxville, Brentwood, Franklin and Williamson County.

Knology currently operates broadband systems in Columbus, Augusta and West Point, Ga.; Montgomery and Huntsville, Ala.; and Charleston, S.C., with 160,000 existing connections. It plans to grow its Southeast cluster to more than 1 million homes passed by year-end.

Knology vice president of business development Felix Boccucci said the company is not concerned about being the third player in the Nashville market. The company added 20,000 overall connections in the first half of the year, he noted.

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