Swap's Demise Relieves Some


The collapse of a $2.8 billion system swap involving AT & T Broadband and Charter Communications Inc. relieved some local officials and disappointed others.

Unable to agree on the value of their respective assets, the companies pulled the plug July 7 on a pending deal that would have sent 704,000 AT & T Broadband subscribers in Missouri, Alabama, Illinois and Georgia to Charter for 632,000 in Texas, Connecticut, Massachusetts, California, Tennessee and Kentucky to Charter.

AT & T Broadband would have finally gained control of the Dallas metroplex, after years of trying, and Charter would have made its hometown of St. Louis into a flagship operation.

In Fort Worth, Texas, assistant city manager Pat Svacina said the city wasn't upset Charter would be hanging onto the former Marcus Cable system, with 70,000 subscribers.

"We're very happy with Charter, which continues to improve customer service and to build out the system," he added.

At the same time, canceling the deal throws a monkey wrench into Fort Worth's plans for requiring open access as part of the transfer process.

Fort Worth was one of 29 area communities, with 200,000 Charter subscribers, that planned to demand open access in exchange for transferring their franchises to AT & T Broadband. Such a requirement would have been a blow to AT & T Broadband's plans for growing its Dallas-Fort Worth cluster to almost 700,000 subscribers.

But Svacina said the city expects to award a competitive franchise to WideOpenWest LLC by the end of July. The deal will feature a provision under which WOW agrees to allow area Internet-service providers onto its high-speed network. Charter's franchise does not contain such a provision.

"We think the business pressure is going to be on [Charter] to do the same thing, whether it's in the franchise or not," he added.

Meanwhile, St. Louis cable administrator Susan Littlefield said the city was sorry it would not be able to benefit from Charter's reputation for delivering quality customer service in St. Louis County-something neither AT & T Broadband nor predecessor Tele-Communications Inc. enjoy inside the city limits. "They do have a good reputation," she said of Charter. "We're sorry we won't get a chance to develop a relationship."

Francis Slay, president of the St. Louis Board of Aldermen, said scuttling the swap would not alter the city's stance on open access. Earlier this year, aldermen passed an ordinance requiring all cable operators to open their networks to independent ISPs.

The Ninth Circuit Court of Appeals decision that struck down a similar law in Portland, Ore., will have "little effect" on the St. Louis ordinance, since the court's jurisdiction does not extend to Missouri, Slay added.