Cable One Inc. has until Dec. 20 to address problems in Modesto, Calif., or the city might reject the transfer of its franchise to AT&T Broadband.
The Modesto City Council also wants any transfer to include a written agreement that spells out who is responsible for improvements to the local system.
On Nov. 7, the city found Cable One breached its franchise and gave the MSO until Dec. 20 to fix the problems.
At stake is an agreement that would swap 108,000 Cable One customers in California's San Joaquin Valley-including Modesto-for 107,000 AT&T customers in Oregon, Utah and Idaho.
The City Council staff, which will evaluate the company's attempts to resolve service problems, could throw a monkey wrench into the MSOs' plans at a Dec. 12 meeting.
"Right now, the staff recommendation is not to transfer the franchise until the breach issues have been resolved," said city spokeswoman Donna Hansen.
Cable One officials said the city will work with AT&T on a renewal, leaving the incumbent to address existing problems.
"We're working cooperatively with the city," Cable One vice president Mitch Bland said. "But we've told them that some of things will take longer than others."
The problems in Modesto include hundreds of alleged electrical violations, poor picture quality and $60,000 in back franchise fees.
The electrical problems were found by Jonathan Kramer, president of Kramer. Firm. His California-based consulting group estimates it may take 18 months to resolve 4,000 electrical violations at Cable One's system, including 1,800 improperly grounded drops that could allow electrical surges to affect subscribers' television sets.
Kramer also found Cable One's evaluation of its picture quality unreliable because testing equipment had not been correctly calibrated since 1996.
"The Federal Communications Commission standards for picture quality are clear," Hansen said. "What isn't clear is the picture on my television."
Cable One officials declared some of Kramer's findings "speculative," and said he inspected only 72 miles of Cable One's 387 miles of area plant. Even so, it hired engineers to ensure all 80,000 drops in Modesto were properly grounded.
"I'm basing my estimates on doing this for 17 years and being in this situation countless times," replied Kramer, whom the city has asked to conduct periodic reviews of Cable One's progress. "Given the staffing levels they're talking about, I think they're being optimistic about completing the work in the time frame they're talking about."
Meanwhile, in a letter to Mayor Carmen Sabatino, Bland said that annual evaluations have consistently found the MSO to be in compliance.
The letter also offered to upgrade operations at its public, governmental and education channel through additional staff training and a customer-outreach program.