a004  2146  10 Feb 86
PM-Cable TV, Bjt,0764
Today's Topic: Expecting Too Much of Cable TV in Capital?
By DEBORAH MESCE
Associated Press Writer
    WASHINGTON (AP) - The District of Columbia had set lofty goals for
its cable television system - local ownership with strong minority
involvement, 80 channels with 16 set aside for public and municipal
access and a two-way communications link for businesses, hospitals
and schools.
    Yet nearly two years after it negotiated the original contract for
cable service, the system is in the hands of the country's largest
cable operator, the proposed services have been scaled back and still
none of the city's 250,000 households has been wired.
    ''There were a lot of unrealistic expectations on both sides about
what cable operators could provide,'' said Richard Maulsby, executive
director of the District of Columbia's office of cable television.
    The District began debating cable legislation in the mid 1970s,
finally passed a law in 1982 and two years later negotiated a
contract with District Cablevision Inc., whose lead investor was
Robert L. Johnson, a local black businessman.
    But financing problems developed, and a new agreement was forged.
While Johnson remains president of District Cablevision, Denver-based
Tele-Communications Inc. is providing the lion's share of the
financing and controls the operation.
    In the new pact, the city made contract concessions, agreeing to
fewer channels and reduced public access programming and abandoning
the two-way communications link.
    ''If you look around the country, these are the same kinds of
concessions being made'' by a host of other cities trying to settle
on a framework for cable, Maulsby said.
    Johnson said through a spokeswoman he had no comment.
    Of 32 of the largest cities where initial cable franchise awards
were made over the past decade, there have been lawsuits in 18, said
John Mansell, an analyst for Paul Kagan Associates, a research and
consulting firm for the communications and financial industries.
Contracts were renegotiated in eight cities before cable construction
began and in 15 others after operators began building.
    ''This is something that has gone on in Chicago, Los Angeles,
Minneapolis, Pittsburgh, Miami, Atlanta, Denver ... you can go right
down the line,'' he said.
    The process began as long as 20 years ago in some cities, where
officials have tried to decide who should award franchise contracts,
how many cable companies should operate in the city, what services
operators must provide and how much control the city should retain.
    Mansell blames politics, in part, for the slow progress in major
cities. ''You have all these wish lists of pressure groups and that's
going to result in delays,'' he said.
    The pressure groups cover a range of interests - businesses,
hospitals and schools that want to be included in two-way data
transmission links; police and fire officials who want a say in any
security alarm services provided; and community groups that want
studios and expertise made available for them to produce programs
which give citizens access to the airwaves.
    Political struggles even pitted mayors against city councils for the
power to award a cable contract. In some cities, local politicians
and others with political connections were incorporated in groups
trying to get the city's cable contract, Mansell said.
    ''Both sides want to be able to maximize their patronage powers,''
which added a ''potential for corruption,'' he said.
    Businesses wanting to offer cable services have competed fiercely
for contracts, often bidding too low for agreements that call for
elaborate systems embellished with sophisticated features.
    ''Cable operators were committing to build cable systems that were
gold-plated,'' said Steve Tuttle, a spokesman for the National Cable
Television Association, the principal trade association for the
industry.
    ''When the cable operators went into the marketplace to sell these
services, the public yawned,'' he said. ''In a great many
circumstances, there was no great demand for the bells-and-whistles
service cable operators were trying to offer.''
    The cost of such services drove up the overall costs of the cable
system, adding to the monthly rates subscribers would have to pay for
the basic entertainment service.
    Cable operators also anticipated a greater demand for entertainment
service than the public delivered. Maulsby notes that ''back in the
late 1970s, nobody anticipated the impact of VCRs ... and satellite
dishes.''
    In many cases, cable operators whose plans had been marred by market
realities began seeking to renegotiate their franchise contracts.
That has often led to cities agreeing to less service than initially
agreed upon, but Tuttle says that's usually the most prudent course.
    ''In the best interests of the subscribers, do you continue to
operate an overblown, inflated service or do you pare it down?''
    
AP-NY-02-11-86 0045EST
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