Adelphia communications provides cable service to parts of New Hampshire.
And it’s the biggest cable company in Maine.
But the company is in trouble.
It faces an SEC investigation, possible de-listing of the company's stock, and most recently, an announcement that significant portions of its cable operations are up for sale.
And today, the Adelphia’s chairman and CEO John Rigas resigned….saying the company needs fresh independent leadership.
All this has town managers across Maine wondering if the company can live up to its promises.
As Maine Public Radio’s Naomi Schalit reports.
Adelphia owns cable systems in three quarters of the state geographically, and provides service for approximately half of the cable customers in the Maine. The only other major cable TV company in Maine is Time Warner Cable, which serves the greater Portland area. Adelphia got that big by going on a buying spree a few years ago.
IN 1999, THEY WENT THROUGH TWO OR THREE VERY LARGE ACQUISITIONS, INCLUDING ACQUIRING A COMPANY CALLED FRONTIERVISION, WHICH OWNED A NUMBER OF CABLE SYSTEMS IN MAINE.
Pat Scully is an attorney at Bernstein, Shur, Sawyer and Nelson in Portland. Over the last decade, he's helped many Maine towns negotiate
franchise agreements with cable companies. Scully says since Adelphia
came to Maine, there's been growing dissatisfaction with the company's ability to live up to promises they undertook. Those commitments include everything from wholesale rebuilding of cable systems to free provision of cable modem services in municipal buildings, libraries and schools.
THERE IS A THEME THAT I HEAR FROM TOWN MANAGERS AND OTHER LOCAL OFFICIALS, THAT THEY'VE HAD A LOT OF CONCERN ABOUT ADELPHIA COMPLYING WITH THE TERMS OF THEIR LOCAL FRANCHISES, PARTICULARLY THINGS THAT MAY BE UNIQUE TO A GIVEN TOWN; RESPONDING TO COMPLAINTS, RESPONDING TO TELEPHONE CALLS, BOTH FROM THE MUNICIPALITY AND FROM CUSTOMERS.
In Auburn, for example, there have been problems with Adelphia not providing service to areas of the community where they'd been obligated to , and poor response to service calls. There was also a recent uproar in that city over Adelphia's 63% price hikes for minimal service....from nine dollars a month to sixteen. Mark Adams is Auburn's assistant city manager:
619 WE HAVE NOTICED THE COMPANY OF VIOLATIONS OF THEIR AGREEMENT WITH US; WE ARE WORKING THROUGH THAT WITH THEM, WE ACTUALLY HAVE PROVISIONS IN OUR AGREEMENT TO TERMINATE BASED ON A FEW OF THESE BUT OUR AGREEMENT OBVIOUSLY ALSO PROVIDES THEM AN OPPORTUNITY TO CURE OR FIX SOME OF THESE PROBLEMS BEFORE WE CAN JUST SIMPLY MOVE AHEAD WITH TERMINATING OUR AGREEMENT.
There are similar problems just over the border in New Hampshire, where the town of Merrimack has found Adelphia in breach of contract for not meeting their obligations for timely response to phoned-in complaints.
And now, with the company's deepening financial problems, SOME MUNICIPAL OFFICIALS are concerned that Adelphia may not be able to perform as expected. BILL Bridgeo, TOWN MANAGER OF AUGUSTA, SAYS there's very little any cities can do to force good behavior out of local monopolies, which cable providors are:
2/48 I THINK THAT MUNICIPALITIES WERE LOTS BETTER OFF PRIOR TO SOME OF THE OMNIBUS FEDERAL LEGISLATION THAT DEREGULATED THE TELECOMMUNICATIONS INDUSTRY AND PROVIDED A LOT OF RIGHTS AND PROTECTIONS TO THE TELECOMMUNICATIONS INDUSTRY; THE MOTIVATOR THERE, THEORTICALLY AT LEAST, WAS THAT COMPETITION WOULD MAKE THE INDUSTRY BETTER, SHARPER AND THE CONSUMERS WOULD BENEFIT. BUT I DON'T NECESSARILY THINK THAT THAT GOAL HAS BEEN REALIZED.
Local Adelphia spokesman Mike Edgecomb says his company has lived up to all of its agreements:
ANY FRANCHISE AGREEMENT THAT WE HAVE MADE TO PROVIDE CABLE OR CABLE MODEM SERVICE, WE ARE CERTAINLY PROVIDING THAT; EVERY TOWN THAT WE OFFER CABLE MODEM SERVICE, IF THEY ARE A TRANSFER TOWN OR THEIR FRANCHISE REQUIRES THAT WE OFFER HIGH SPEED INTERNET, WE ARE CERTAINLY DOING THAT; I DON'T KNOW OF ANYPLACE THAT WE'RE NOT DOING THAT.
And Edgecomb says that as far as he knows, Adelphia's got the funds to keep functioning in Maine at current levels:
416 OUR OPERATING BUDGET AS FAR AS I KNOW HAS BEEN UNTOUCHED; WE'RE HIRING EMPLOYEES AS WE NEED 'EM; WE'RE OPERATING AS NORMAL, BUYING EQUIPMENT AS WE NEED IT, WE HAVE NOT SEEN ANY CHANGES IN THAT. SOME OF THE CAPITAL CONSTRUCTION PROJECTS HAVE SLOWED DOWN SOMEWHAT.
In general, industry observers say that despite Adelphia's troubles, the cable business is robust. One cable industry analyst says that even if the current management of Adelphia changes, or the company is sold, Maine's systems will still end up in well-financed hands.
For NHPR News this is Naomi Schalit in Augusta
