Ky. Town Condemns Falcon -- Now What?

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A small Kentucky community, frustrated after free years of
failing to complete refranchise talks with Falcon Cable, has voted to begin condemnation
proceedings against the operator.

Now all the Somerset city council has to do is figure out
what that means, exactly.

"Our city attorney will advise us of the next
step," said mayor Jim Williams. "We don't seem to be making any headway ...
We're not satisfied with Falcon."

The vote has confused the operator, and even some of the
townspeople.

"We called them and said, 'What does this mean,
that we can't go in our offices?'" said Mike Kemph, Falcon's
divisional vice president. "They explained maybe 'condemned' was too strong
a word. They just wanted us to know they still aren't happy."

At this point, the city has not stated, nor has Falcon been
told, that "condemnation" should be translated literally -- that is, that the
city intends to demolish or remove cable facilities and bill the cost of that action to
the owner.

But some in town read it that way.

"I got a call from some guy asking if that meant our
office had been condemned. If so, he wanted to buy our furniture. Apparently, he likes the
sofa in our office," Kemph said.

The Somerset system serves about 13,000 homes in the city
and two surrounding counties. It is a 30-year-old plant plagued with picture problems,
according to Williams. Falcon acquired the system from local owners in 1992.

Kemph said Falcon put on hold its plans to rebuild and
upgrade the system until the town refranchises the operator.

Kemph attributed the delay in refranchising to improper
demands by the community. Rates are a concern there, and pricing and programming issues
have been raised in the course of negotiations. Kemph said Falcon is willing to talk about
community needs but federal law prohibits their inclusion within the franchise.

Because of the lack of agreement with the incumbent, the
city issued a request for proposals last year to get a competitor for Falcon. Falcon did
not submit a bid and the firm that did, BSG LLC, would only agree to serve the community
if the city ousted Falcon from its plant. Because of the conditions, Somerset rejected the
bid.

The Somerset area is served by a 17-channel wireless
provider, CNI Wireless Inc., plus national DBS services. That, plus lack of density --
Falcon has only 90 miles of plant -- make overbuilding financially infeasible, Kemph
explained.

Both Williams and Kemph said talks continue. No date has
been set for acting on the condemnation vote.

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