Miami Delays TCI Franchise Renewal

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The Miami City Commission voted last week for a preliminary
denial of a refranchise request pursued by Tele-Communications Inc.'s TCI Cablevision
of Miami.

The panel said the franchise qualified for revocation under
four standards set down by the Federal Communications Commission:

<p> <strong id="d9e15-4-b">• If a system is not in substantial<br> compliance of its franchise;</strong> </p>

• If it has bad signal, customer-service or billing quality;

• If it is not financially, legally or technically viable to continue operation; and

• If it is not reasonable to expect that an operation will be able to meet the future needs of a community.

 

Elaine Buza, telecommunications administrator for the city,
said the next step in formal proceedings is an administrative hearing, adding that she
believes that informal talks will continue simultaneously.

The community is very unsatisfied, she added, and TCI
promises improvements, but written plans always come in looking much different than the
system improvements pledged in talks.

The parties can't even agree on the basics: TCI said
the system has been technically enhanced to 450 megahertz, and digital services are being
launched. But Buza said she hasn't seen any improvements, and she believes that the
system is 400 MHz and incapable of supporting widely available digital programming.

Consumers complain of chronic outages in some areas of the
city and difficulties reaching the operator, she added. Buza wants to see a proposal that
guarantees greater manpower in the local operation.

An attempted revocation could delay a system swap by TCI to
MediaOne. The MSOs have announced plans under which TCI would transfer its Miami-area
properties to MediaOne in exchange for the latter's systems in the Chicago suburbs.

However, Buza said, the city has not formally been notified
of transfer plans. "We are just considering a renewal of TCI," she added.

The city is not the only entity throwing a roadblock in
front of the system swap. Regulators in Dade County, Fla., where TCI serves 260,000 of the
480,000 cable subscribers, noted that the operator must resolve about a half-dozen
lawsuits before it will entertain any system swap or merger approval with AT&T Corp.

The county has received a Form 394 transfer notification
from TCI. According to TCI's strategy on the business deal, only about one-quarter of
the communities that it serves will get 394 submissions.

Although a Federal Court of Appeals decision has clarified,
to cable's benefit, how franchise fees should be formulated (that the fees should not
be included in gross revenues when computing the ultimate amount of the tax), TCI and Dade
County are still in court in tax suits predating the decision. The county has audited and
disputed payments for 1991 through 1993.

Another suit should raise a red flag for operators mopping
up from last month's Hurricane Georges: TCI is fighting an attempt by the county to
take a share of the business-interruption-insurance payment that the company received to
compensate it for damages that it sustained from the devastating Hurricane Andrew in 1992.

Mario Goderich, director of the Miami-Dade County
consumer-protection division, said he and TCI executives discussed their differences at
the recent National Association of Telecommunications Officers and Advisors conference in
San Diego, and he believes that they are amenable to resolving the situation so that the
community can move on to the merger.

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