Overbuilds Gain Franchises, Seek Others

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Three newcomers to cable kept overbuild mania moving along last week.

Digital Access Inc. added three franchises to its Wisconsin cluster; Everest Connections struck as many deals in Michigan; and American Broadband Inc. set its sights on Buffalo, N.Y.

West Milwaukee and Whitefish Bay, Wis., joined Glendale, Shorewood and Fox Point in signing with Digital Access, which has 21,000 of that region's homes and businesses under contract.

Everest Connections, meanwhile, obtained its first three franchises in Michigan by signing 15-year deals with Grand Rapids, Granville and Wyoming.

American Broadband said it would apply for a franchise in Buffalo by Oct. 6, setting the stage for a $90 million overbuild of Adelphia Communications Corp.'s system.

Digital Access picked up 6,000 households in both Glendale and Shorewood, as well as 1,000 homes in Whitefish Bay; 3,000 in Fox Point; and 1,000 in West Milwaukee. Overall, the company has eight franchises in southeastern Wisconsin, for a total of 38,000 homes and businesses.

The three new communities are part of a consortium that represents cable subscribers in 23 Milwaukee suburbs. The group approved a model franchise that has been forwarded to its individual members for approval, said Digital Access spokesman Tom Gailey.

"That's why we've had a steady flow of franchises out of that area," Gailey said.

Elsewhere, Nashville and Davidson County, Tenn., lawmakers last week held first readings on a proposed franchise for Digital Access, which already has deals with the Nashville suburbs of Brookfield, Butler and Hales Corner.

Gailey said construction would begin in Brookfield within a month.

In Michigan, Grand Rapids, Granville and Wyoming are part of a 14-town coalition that is expected to award franchises to Everest. The company would ultimately get 150,000 area residents under franchise.

The three communities have the right demographics for a cable overbuild, said Everest Connections president and chief operating officer Michael Roddy.

"Grand Rapids, the second-largest city in the state, is a very attractive market," he said. "Everything is growing very, very well. There's been a tremendous investment made to attract outside businesses. Obviously, the others are smaller, but they have similar population densities and education levels."

Everest now has franchises in Lenexa, Kansas City and Mission, Kan., as well as Fort Lauderdale, Fla., and Tulsa, Okla.

The overbuilder also obtained franchises in nine communities represented by the Northwest Suburban Cable Commission near Minneapolis and St. Paul, as well as from the Southwest Cable Commission, which handles another five area jurisdictions. Overall, Everest has 50 franchises pending in Minnesota, including both of the Twin Cities, Roddy said.

Meanwhile, American Broadband continues to focus on second-tier markets in which it can offer a bundled package of cable, high-speed Internet access and telephone service.

Vice president of government and public affairs Donna Garofano said the company's presentation received an "enthusiastic reception" from the city council's telecommunications committee, which wants the Boston-based startup to locate its customer-service facilities there.

"We're perfectly open to that," Garofano said. "But obviously, if another community comes to terms first, the question of those facilities becomes a matter of speed to market."

In the running for those facilities is Rhode Island, where the state Division of Public Utilities and Carriers has granted American Broadband a certificate of compliance. The document covers seven service areas and allows the company to build a network capable of reaching 80 percent of the state's population, or 300,000 households.

Another possibility is Baltimore County, Md., where American Broadband is negotiating a franchise agreement covering 350,000 homes.

Elsewhere last week, RCN Corp. continued to expand its San Francisco-area cluster. The company, which competes against AT & T Broadband, won franchises in Millbrae, Redwood City and San Carlos.

The company already has regulatory approvals in San Francisco city and county, South San Francisco, Daly City, San Mateo and Burlingame. So far, it has designed or built 4,300 local-route miles of fiber in California.

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