56 Maine Cities and Towns Approve Historic Cable Transfer Agreement

Effort Largest in State History, Municipal Attorney Says

Officials in 56 cities and towns throughout Maine have voted to sign a comprehensive cable transfer agreement, the largest organized effort by a group of municipalities in the state's history to improve how cable service is provided.

The agreement, crafted by municipal attorney Patrick J. Scully, a partner at Bernstein, Shur, Sawyer & Nelson in Portland, expands cable service in rural areas, provides free and unlimited Internet and cable service at schools, libraries and town buildings in the communities, and commits the new company to rebuild its cable systems to provide state-of-the-art service.

The agreement stems from the $2.1 billion sale of FrontierVision Operating Partners of Denver, Colorado, to Adelphia Communications Corporation of Coudersport, Pennsylvania. In Maine, FrontierVision serves more than 200,000 households. The company was required to obtain approval of the sale from about 75 cities and towns with which it had cable franchise agreements. Of those towns, Scully was able to form a coalition of 56 municipalities to negotiate the most favorable possible conditions for the transfers. Each town had until August 12 to vote to approve the cable television franchise transfer.

"This is a major victory for these cities and towns as it shows how they can improve their cable agreements when they join together," said Scully. Attorney Lee Bragg of the Augusta office of Bernstein, Shur, Sawyer & Nelson also worked on developing the agreement.

Cities that signed off on the agreement include Lewiston, Auburn, Augusta, Waterville, Gardiner and Hallowell, and towns include 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.

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 agreement Scully negotiated 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 it's 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 Adelphia's gross revenues.

Finally, Adelphia will rebuild any town's 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.

Scully, a resident of Brunswick, concentrates his practice in the areas of municipal and administrative law, telecommunications and public utilities. He serves numerous Maine towns in legal and public finance matters. He is a 1984 magna cum laude graduate of the University of Maine School of Law and a 1979 graduate of Dartmouth College in Hanover, New Hampshire.

Bernstein, Shur, Sawyer & Nelson is one of the state's largest law firms with more than 60 lawyers in offices in Portland and Augusta. In addition to departments in corporate and commercial real estate, tax and estate planning and litigation, the firm's municipal law department provides legal services to more than 100 towns throughout the state.

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