Overbuilder Approaches L.A.


A potential telecommunications competitor has approached
city officials in Los Angeles, but the presentation was notable mostly for its lack of

The potential overbuilder is CoreComm Ltd., which is a part
of NTL Inc., the third-largest telecommunications provider in Great Britain. The company
is active in Ohio as a telecommunications reseller to businesses.

CoreComm is "highly interested" in building a
fiber network in Los Angeles and the company has raised $50 million from the capital
markets, said chairman George Blumenthal, adding his purpose was "education"
rather than the presentation of a franchise proposal.

Alan Arkatov, chairman of the Board of Information
Technology Commissioners, said CoreComm appears to have "a good track record."
That the company chairman appeared to make the presentation shows CoreComm is serious,
but, he added, "We have lots of questions."

He indicated that the city anticipates a presentation by
RCN Corp. soon, also.

Blumenthal said CoreComm would build something like the
infrastructure it is laying down in South Wales, with fiber extending into neighborhoods,
not just the industrial core, to nodes that serve 600 homes.

On one point Blumenthal was specific. CoreComm is not
interested in overbuilding the entire city. He estimated that would cost $5 billion. But
Los Angeles has 14 cable franchises, served by operators including Century Communications
Corp., Time Warner Cable and Tele-Communications Inc., each of which dispatched employees
to the meeting to take notes on CoreComm.

But Blumenthal, noting the company is not ready to request
a franchise or even commit to a date for a proposal, declined to say what area or areas
his firm would be interested in entering.

Blumenthal noted there is one potential hurdle: access to
sports programming. Fox Sports Net controls the rights to all major sports franchises in
the market and program access laws allow Fox to keep the games cable-exclusive if it
distributes them via fiber rather than satellite.

Cable executives at the meeting said they are not looking
for competition anytime soon, based on the presentation.

"They'd have to have more of a strategy to amaze
us," one said.

Jonathan Kramer, a technical consultant to cities who
listened to the proposal, said, "Cherry picking will be a huge issue."

Companies that offer bundled services look for the
territory that offers the highest "minutes per mile," which is most likely to be
industrial or affluent corridors, he noted. Los Angeles officials have always been
vigilant against creating information-poor communities within city limits.