More Competition Headed to Windy City?


Another potential overbuilder has stepped forward in
Chicago, applying for franchises in two Tele-Communications Inc. areas.

And one of the franchises areas could even end up with
three hardwire competitors.

Wedgewood Communications, which was initially formed to
provide telephone services to a development called Presidential Towers, has filed the
applications, said Joyce Gallagher, the city's cable administrator. The applications
cover Area 1, which stretches from the city limits through the so-called Gold Coast near
Lake Michigan, and which is currently served by TCI and overbuilder 21st Century Cable TV
Inc.; and Area 4, from Hyde Park south along the lakefront and west to Midway Airport.

Initially, Wedgewood indicated that it only wanted to enter
high-rises, but the city insisted on universal service.

Wedgewood's principals include developer James McHugh
and his children; and his partner, Daniel Levin, and his son.

Additionally, Gallagher said, the city is nearing
completion of franchise negotiations with Ameritech New Media for Area 5 on the South

But subscribers won't have to wait for expanded
competition to get a break on their late fees. Some current subscribers will pay as much
as $6 less in monthly late fees under the terms of an agreement with three of the
community's cable operators.

However, the timing of activating the new fees has not been
set. Although the city's two largest operators -- Prime Cable and Chicago Cable (a
TCI system) -- have agreed to lower their rates, the parties are still negotiating over
the trigger date, Gallagher said.

The city wants no fee charged until 45 days after the
initial billing, but the operators argued that this caused a problem with their billing
vendors' cycles. Twice-weekly negotiations on the issue will continue until it is
resolved, Gallagher said, noting that both incumbent operators are in refranchising
negotiations. As a result, it's possible that the new fees won't be instituted
until the new franchise agreements are completed.

"We're excited about the agreement,"
Gallagher said, but, she warned, "if the state or federal government come up with
anything lower, we'll go with it."

The city's only current overbuilder, 21st Century,
previously agreed to the amount and trigger date.

According to the policy proposed by the city, cable
operators may charge "reasonable costs of collection" if the bill is not
satisfied within 55 days.

Before this agreement, late fees in Chicago ranged between
$5 and $7.50 per month, and they are the subject of a class-action suit in an Illinois
state court. The cable industry's attempt to legalize late fees and triggers through
state legislation failed in the last session.