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Picture on United Cable TV Appears to Be Brightening

June 23, 1987|JON D. MARKMAN | Times Staff Writer

When United Cable Television Corp. won the coveted East San Fernando Valley cable franchise in 1983, it promised to finish the job in two years. The company's confident slogan was, "We build on time."

Now that United is nearly three years late finishing the job, the company's new slogan is: "It's been worth waiting for."

From a technological point of view, that seems true. "What they are building is state of the art, and the rest of the city is doing a rebuild to get to that level," said Gayle Johnson, an aide to Councilman Ernani Bernardi, whose 7th District covers much of the franchise area.

But United Cable also stumbled its way through three construction extensions and many wiring violations while piling up $350,000 in liquidated damages, much like a fine, from the city. Nevertheless, cable analysts lay much of the blame for the delays on a tangled city bureaucracy that slowed United's ability to get financing for the project.

The real wonder of it all is that it probably will be worth the wait for United, a $200-million company based in Denver that is the eighth-largest cable operator in the nation. The enormous East Valley franchise, bounded by the San Diego Freeway on the west, Ventura Boulevard on the south, Burbank on the east and Sylmar on the north, is the third-largest, with 175,000 dwellings, of the 13 cable franchises awarded by the Los Angeles City Council.

"United has a very long-term approach to its systems and investments and views the East Valley as tremendously attractive," said West Whittaker, a cable industry analyst for Kagan Associates Inc., a market research company in Carmel, Calif.

Although 55% of its potential customers in the East Valley are still waiting for cable hookup, United officials talk of earning $5 million a year on $42 million in revenues by 1995 from the company's $67.5-million investment.

But the delays aren't over. United's goal is to have 1,110 miles of copper-lead wire cable strung by May, 1988. On June 11, however, only 463 miles had been activated for customers.

United has hired contractors to attach its cable to about 43,000 utility poles that belong to the Department of Water and Power, General Telephone and Pacific Bell. The DWP must approve the work before the lines may be attached to an amplifier that relays United's signal to homes. And, until recently, the utility's inspectors often have not liked what they have seen.

United maintains that the DWP has allowed them to activate only 40 of the 200 miles of cable that its contractors have strung this year. "They're just nit-picking little violations, not major safety violations," said William Cullen. He is head of United Cable's Los Angeles operation, based in Van Nuys, that encompasses two other groups of cable systems serving seven communities in Los Angeles County and Arizona.

John Owen, superintendent of pole line specifications for the DWP's Power Distribution Division, disagreed. "They are creating some life-threatening infractions in the field, which they need to correct," he said.

The sniping between United and the city isn't over, either. "The bidding people promise the moon--but they aren't the ones who end up having to deliver it," Johnson said.

Still Waiting

Meanwhile, potential cable customers are still waiting. "I'd just love to have it," said Cherie Willis of Studio City, whose husband was art director on "Right of Way," a Home Box Office-produced television movie that could only be seen on cable television. "We don't get to see half of my husband's work. Everyone else has it but us. We have to get friends to make a tape."

The problems trace to late 1980, when eight companies submitted bids for the franchise, attracted by estimates of $15 million a year in revenues, or as much as $100 million over the life of the contract.

The battle for the East Valley franchise was rancorous, political and financially rewarding for City Council members, a Times survey found. The council members netted an estimated $300,000 in campaign contributions from cable bidders.

After three years of public hearings, the race narrowed to East Valley Community Television of Sherman Oaks and United's Los Angeles subsidiary. East Valley won three recommendations from the city's consultant, but United hired veteran City Hall lobbyist Philip Krakover for the home stretch.

In late August, 1983, after intense lobbying by Krakover and $30,000 in campaign contributions to City Council members in the final five months, United won the franchise.

It was the financial strength of United's corporate parent--not its political contributions--that gave it the edge, according to Charles Firestone, an East Valley Cable TV investor who later became head of the city Board of Telecommunications Commissioners. "Everyone else had to drop out along the way," Firestone said. "Plus Krakover was better. In his long career of lobbying, this was his biggest coup."

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