After more than three years of trumpeting extensive plans to bring competitive TV to its customers, Ameritech Corp. has yet to launch a single video delivery system.
And while Ameritech officials say they are stringing cable and will start delivering TV services to some customers within months, many municipal officials in Chicago suburbs say their impression is that the big telephone company doesn’t know what it’s doing when it comes to cable television.
Suburban discontent was fueled last week when Ameritech said it would step back from bringing cable TV to five northwest suburbs because it is prevented from offering several premium movie channels due to an exclusive contract held by Continental Cablevision Inc., the current cable provider.
For months, municipal officials say, executives from Ameritech have been “running hot and cold” on cable television by making slick presentations about their planned services, then failing to follow up with hard negotiations or detailed written proposals.
For its part, Ameritech can point to eight cable franchises won in the Detroit area, compared with only two in the Chicago area, and claim that an Illinois law favors incumbent cable companies and hinders the firm’s efforts to deliver competition.
As has been true in Ameritech’s dealings with companies aspiring to deliver competitive local phone service in the Chicago area, efforts so far have delivered far more heated rhetoric than actual competition.
“I felt like the groom waiting at the church, and the bride didn’t show up,” said James Petri, an Elk Grove Village trustee and chairman of a cable group representing the five northwest suburbs.
While Continental Cablevision delivered a fat written proposal to meet the group’s deadline, Ameritech responded at the last minute with a faxed message asking for a deadline extension, Petri said.
Using Continental’s exclusivity agreement with Home Box Office for premium movies as an excuse for not making a proposal struck Petri as lame, because Ameritech knew about that arrangement last year and also knew that it will expire the end of 1997.
Petri said he was also put off by the statement made by Greg Brown, president of Ameritech New Media, in a press release that the Continental deal with HBO meant Ameritech wouldn’t invest some $20 million in video infrastructure in the communities.
“They’re giving a price of somewhere around $20 million for the five suburbs to build a new system,” said Petri. “Continental is estimating between $80 million and $90 million to rebuild their system. There’s a little disparity there.
“(Ameritech officials) claim Elk Grove’s portion would be about $3.5 million. I think when we first put the system in, Warner Image spent that much on sod replacement.”
Carole Pagan, director of the Northwest Municipal Cable Council, said that Ameritech has approached several of her member communities.
“You’ll hear from them with all their talk and plans,” Pagan said. “You ask them some specific questions, and then you just don’t hear from them again. It’s like they just disappear.”
Cheryl Pasalic, communications administrator in Mt. Prospect, said that Ameritech officials “seem to run hot and cold” on cable television by talking up plans but then failing to follow through with written proposals.
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Scott Randall, Streamwood village manager, said that cable negotiations with Ameritech “were running pretty strong until last July, but now it seems like we’re on the back burner.”
Ameritech officials say some misunderstandings over their ability to provide HBO stem from their own inability to see written contracts spelling out precisely what rights Continental Cablevision has, and they acknowledge mishandling the matter with municipal officials.
“Should we have told them earlier that we were nervous about going to market without five channels? Probably, and that was a mistake,” said Donna Garofano, public affairs vice president for Ameritech New Media.
But, said Garofano, much of Ameritech’s difficulty in negotiating cable television agreements in Chicago suburbs stems from an Illinois law requiring that municipalities not favor one company over another when granting competing cable franchises.
The only two suburbs to grant cable franchises to Ameritech, Naperville and Glendale Heights, have been sued by cable interests, Garofano noted.
“This law has clearly had a chilling effect,” she said. “Most communities are enthusiastic about getting competition, but most are also wary about finding themselves in the middle of a lawsuit.”
Besides eight cable franchises in the Detroit area and the two here, Ameritech has obtained two in suburbs of Columbus, Ohio, and one in the Milwaukee area.
In some cases, Garofano said, communities have asked for things like scholarship funds or money to renovate village halls in exchange for the franchise agreements.
Ameritech has declined those requests. “We thought agreeing to such things would unduly burden cable customers,” she said.
What Ameritech may be seeing is a growing sophistication among municipal officials who believe that in the past they weren’t demanding enough in making deals.
Elk Grove Village’s Petri said his people don’t intend to sign a long-term deal likely to stick their communities with old technology in the fast-changing video communications arena.
“Those five communities want to put Ameritech’s and Continental’s feet to the fire, and they will be tough on both of them,” said Gary Maher, president of the Illinois Cable Television Association.
“(Ameritech) didn’t expect the communities to play one off against the other. They don’t deliver. They go to all these communities and talk a good game, but they never deliver.”