AGREEMENT LARGEST IN STATES HISTORY: Coalition of 56 municipalities participated
(from Maine Townsman, August/September 1999)
Fifty-six Maine municipalities are involved in what probably is the largest, group cable agreement in the state's history. Patrick J. Scully, a municipal attorney with Bernstein, Shur, Sawyer & Nelson, created and negotiated the agreement on behalf of the municipalities.
Earlier this year, FrontierVision Operating Partners of Denver, Colorado, announced the $2.1 billion sale of all of its cable holdings to Adelphia Communications Corporation of Coudersport, Pennsylvania. In Maine, FrontierVision serves more than 200,000 households.
The company is required to obtain approval of the sale from 75 cities and towns. A coalition of 56 municipalities joined together to review the sale and to negotiate the most favorable possible conditions on their approvals. Each town had until August 12 to formally sign off on the cable television franchise transfer.
Municipalities that participated in the group negotiation include the cities of Lewiston, Auburn, Augusta, Waterville, Gardiner and Hallowell, and the towns of Anson, Baileyville, Baldwin, Bethel, Buxton, Camden, Carrabassett Valley, Coplin, Damariscotta, Glenburn, Greenbush, Harrison, Hiram, Hollis, Jay, Limerick, Limington, Lisbon, Litchfield, Manchester, Mechanic Falls, Mount Vernon, Naples, New Portland, Newcastle, Newry, Norway, Oxford, Paris, Parsonsfield, Poland, Porter, Readfield, Searsport, Sidney, St. George, Smithfield, Standish, Tremont, Vinalhaven, Waldoboro, Waterboro, West Paris, Windham, Windsor, Winslow, Winterport, Winthrop, Wiscasset and Woodstock.
"We were able to get the new owner to agree to several major improvements in the existing cable franchise agreements for each town, and that means improved service and access for many Maine residents," said Scully. Attorney Lee Bragg of the Augusta office of Bernstein, Shur, Sawyer & Nelson also worked on developing the agreement and MMA's Legal Services division provided assistance to their effort.
Among the most significant improvements included in the agreement is a condition that once Adelphia offers Internet access service to its customers in a town, it must provide one free modem and unlimited Internet access service to each municipal building, school and public library in each town. Adelphia will also provide free basic and satellite tier cable service to every municipal building, school and library within 300 feet of its system.
In addition, the negotiated agreement requires Adelphia to extend its cable service to many more homes in rural areas than FrontierVision currently does and to provide a public access channel to towns that presently do not have one. Scully said the agreement also dictates that Adelphia provide each town with a $100,000 bond to assure performance of its obligations, an annual financial report which each town can then audit, and technical audits upon request.
Also, the agreement stipulates that for at least three years Adelphia must use the federal "benchmark" method for establishing any basic cable service rate hikes and that it will not seek to pass through to customers in basic cable rates any inflation in the price its paying for the FrontierVision systems over the net book value of those systems. Towns also will be able to adjust their franchise fees charged to Adelphia up to five percent of Adelphias gross revenues.
Finally, Adelphia will rebuild any towns cable system to provide a state-of-the-art fiber optic system no later than 2002 if the town extends its current franchise agreement through 2009. The new systems will allow Adelphia to provide customers with a range of new services, including Internet access, local and long-distance phone service, music and additional TV channels.
"Certainly, there is strength in numbers, and by joining together for the negotiations these 56 Maine communities will have improved cable services as a result of this agreement," Scully added. "This major development may also help shape how cities and towns in Maine negotiate able contracts in the future."