Time Warner Cable has asked the Ohio State Auditor to
review the city of Lebanon's plans for a municipal telecommunications network capable
of competing for area cable subscribers.
The MSO requested that the proposed overbuild be audited
when the city declined to provide financial details about the project -- an allegation
that local officials readily admitted was true.
"What we're asking for is information that any
citizen has a right to know," said Time Warner spokeswoman Jennifer Mooney.
"They're a public entity and, frankly, we've provided them with whatever
they want to know about our business."
Time Warner -- which operates a 3,000-subscriber system in
Lebanon, a community located 35 miles north of Cincinnati -- is interested in such items
as the specific vendors and consultants that the city has contracted with on the project.
The audit was reportedly under way last week.
"The bottom line is that they're not responding
to us," Mooney said. "Maybe the state auditor will get a quicker response than
The Lebanon City Council voted 7-0 in August to authorize
building the network, after a survey found that 86 percent of local residents approved of
The proposed $4.7 million system remains on hold pending a
final vote on funding. However, the city has already spent more than $1 million on the
project, making it likely that officials will eventually vote to proceed.
In the meantime, Jim Baldwin, director of the Lebanon
Department of Telecommunications, admitted that he has deliberately avoided putting a
business or marketing plan on paper where Time Warner could review it.
"I've offered to let them come up and search my
office," Baldwin said. "I'll be completely honest: I'm not creating
records on paper, because legally, I'd have to show it to them. I'd be letting
my competitors know what my strategy is. But I don't have the right to look at their
Baldwin was willing to say that the city-owned cable system
will be interdiction-based, with no set-top converter box required.
Municipal cable service will cost $20.98 per month, with
franchise fees built into that rate. That would be 42 percent below Time Warner's
rate of $36.60, not including franchise fees, Baldwin said.
"People here hate Time Warner," he said.
"Our market research indicates that if we offer service at 10 percent below their
price, we'll get 90 percent of their universe. If they want to get into a price war,
it's not going to hurt us."
Baldwin said the city is also looking at offering Internet
access through a local Internet-service provider, and at possibly partnering with Sprint
Corp. to introduce a new local-exchange carrier into the market.