Knology Countersues Insight in Ky.

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Overbuilder Knology Inc. has returned fire in its battle with Louisville, Ky.'s cable incumbent, filing a federal lawsuit it hopes will expedite construction of its newly approved franchise.

West Point, Ga.-based Knology wants the court to support its efforts to build a cable, high-speed Internet and telephone system in Louisville, where it would compete with Insight Communications Co.

Knology's complaint for declaratory and injunctive relief, filed in U.S. District Court in Louisville, is a response to a suit Insight filed earlier this month in a state court. The city of Louisville is also named in the complaint.

Two weeks ago, New York-based Insight filed a complaint for declaration of rights in Jefferson (County) Circuit Court. The incumbent claims Knology was given more generous franchise terms. A franchise that is not "substantially similar" violates Insight's rights, the suit states.

Insight officials are especially concerned about disparities in build-out and franchise terms. Knology has been given four and one-half years to complete its system, but Insight was ordered to complete its upgrade within 15 months. Also, Knology's new pact allows it to operate for 15 years, while Insight's franchise is only 12 years long.

Also, the incumbent believes the build-out time frame would allow the overbuilder to initially concentrate on Louisville's most profitable neighborhoods, a strategy that was not available under Insight's timetable. According to the terms of Insight's franchise, all it must do to temporarily stop a competitive new build is file the suit, which effectively serves as a restraining order.

Knology executives have argued their franchise terms are substantially similar to the terms applied to Insight when its system was a new build.

The overbuilder will fight Insight on federal grounds, arguing the incumbent took an unconstitutional step in using the courts to create a long-term entry barrier for competitors.

The competitor also claims Insight has violated federal antitrust laws. Knology's suit also seeks treble damages and costs.

The competitive wrangling could be further complicated this month, as the city looks to add another player to the marketplace.

Louisville officials are entertaining a proposal from TotaLINK. The bundled-services provider is a partnership of Sigecorp LLC, which provides gas and electric power in Indiana, and Utilicom Networks LLC of Franklin, Mass.

Reports indicate city officials are mulling a franchise for this third operator that would match the disputed terms of the Knology franchise.

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