RCN-Backed Venture Gets the Nod in Md.

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Prince George's County, Md., has become the latest locality to join in on cable's overbuild frenzy.

Under terms of a 15-year franchise approved last week by the Prince George's County Council, Starpower Communications LLC will offer video, high-speed Internet access and telephone services to 270,000 households in the affluent Washington, D.C., suburb.

It will compete against Comcast Corp., which acquired 177,000 customers in the area from Media General Inc.

In nearby Fairfax County, Va., the Board of Supervisors will consider Starpower's franchise request on Dec. 11. If its franchise is approved, the company will target 240,000 cable customers currently served by Cox Communications Inc.

The Prince George's franchise is Starpower's latest move in its bid for a network covering more than 2 million residents in the Baltimore-Washington corridor.

"It's huge for us," said Starpower spokesman James Mahoney. "Negotiations have been ongoing for about two years, but both sides walked away very pleased.

"Basically, we'll be bringing a new level of broadband technology to businesses in the area."

Starpower is a joint venture between Pepco Communications LLC, a non-regulated subsidiary of Potomac Electric Power Co., and Princeton, N.J.-based RCN Corp.

The overbuilder already offers service in the District of Columbia and Gaithersburg, Md., and in portions of Montgomery County, Md. It expects to launch in Falls Church, Va., by year's end.

Its six franchises give it some 900,000 households under contract.

In Fairfax County, Starpower is up against an incumbent that is struggling to mollify local officials. County supervisors recently fined Cox $14,600 for not meeting Federal Communications Commission telephone-response standards.

Under FCC guidelines, a cable operator must answer 90 percent of all in-bound calls within 30 seconds. According to county officials, Cox was out of compliance for 73 days during the third quarter, up from 41 days over the previous three months.

"This is not heavy-handed government," said Ron Mallard, director of the Fairfax County Department of Telecommunications and Consumer services. Mallard said that was the first instance in which the county felt compelled to levy such a fine against an operator, "including Cox's predecessor, Media General."

"We've been working with Cox since January," he added. "Things got better in the second quarter. But in the third quarter, it was worse than it's ever been."

Mallard said the county did not have the authority to fine Cox for not responding to service outages in a timely fashion. But a scheduled revision of the Fairfax County Code will grant regulators that authority.

In a written response to a letter from Mallard detailing the county's grievances, Cox vice president Gary McCollum said the MSO had been experiencing "abnormal" operating conditions. Those included the aging plant it inherited from Media General, a retransmission consent dispute with Fox Television, a tight labor market, insufficient employee training and inclement weather.

He blamed the telephone- response problem on an extraordinary amount of rain, which seeped into Cox's underground plant and resulted in 457,673 calls to the local service center during the third quarter, up 30 percent from the like period a year ago.

To cope with the increased volume, Cox's service center has extended its hours and is now open on Sundays, McCollum added.

Cox also intends to add 55 customer-service representatives and 44 field technicians to deal with service problems by year-end. It will also increase training for its employees and install a state-of-the-art telephone system, McCollum said.

Elsewhere, Philadelphia-based Digital Access last week was granted a 15-year franchise covering some 20,000 households in Wauwatosa, Wis.

Digital Access has agreement with 13 municipalities in the area, representing about 72,000 households in Southeastern Wisconsin.

Knology Inc., meanwhile, has applied for its second Kentucky franchise in Jefferson County. It has already been granted permission to offer a bundled package of services in Louisville.

And Rhode Island regulators are prepared to hold hearings for three days in January on Cox Communications Inc.'s request to expand its network into Bristol County, one of the few areas in the state it doesn't already control.

Here for a Western Show panel, Eric Palazzo, associate administrator with Rhode Island's Division of Public Utilities and Carriers, said a hearing examiner could render a decision soon after the proceeding concludes.

"It may only take one day," Palazzo said. "But we're setting aside three days."

The hearing may go the distance if Full Channel TV, the incumbent in Bristol County, has any say. Full Channel submitted more than 60 questions it believes must be answered.

Cox decided to overbuild Full Channel after the two companies failed to settle on sale terms for the 12,000-subscriber system.

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