Potential Bidders Reaching Out to Adelphia on Local Cable Franchises
By DARRELL SATZMAN
As potential bidders line up in the days after its Chapter 11 bankruptcy filing, Adelphia Communications Corp. officials said no immediate layoffs or reductions in services are planned in Los Angeles.
Adelphia's interim Chief Executive Erland Kailbourne said last week that the company has received as many as 10 inquiries from interested parties.
"We believe there are viable buyers out there for our systems," Kailbourne told Bloomberg News. "It's a matter of getting appropriate value for our shareholders."
He didn't name potential buyers or price details. Charter Communications Corp., controlled by billionaire Paul Allen, abandoned a bid for the Southern California systems, considered among the company's most lucrative. The companies couldn't agree on a price, sources told Bloomberg News.
Adelphia officials remain tight-lipped about whether the company's local franchises serving 1.2 million subscribers are still on the block.
"Here in Southern California we have an operation that works real well," said Bill Rosendahl, vice president of political affairs for Adelphia. "We'll take the Cadillac and polish it off. If it goes back on the block it won't be with a note of desperation."
Officials in Los Angeles and other county cities said they would be closely monitoring Adelphia's performance to determine if they should renew long-term franchise contracts with the company, the nation's sixth largest cable provider. Local customers are not expected to suffer service interruptions jeopardizing its cable accounts, which are its primary source of revenue.
If the company moves to sell its local franchises, former Los Angeles Mayor Richard Riordan said he would not be among the bidders. Earlier this month Riordan joined the board of directors of Adelphia competitor Altrio Communications Inc.
"I put my toes in the water and somebody asked me to swim. It was exaggerated," said Riordan of a Los Angeles Times report that he was involved in putting a group together to negotiate for Adelphia's franchises in the city.
Los Angeles-based Altrio has raised $180 million to construct a fiber-optic network in the county to compete with cable and satellite television companies, as well as DSL providers such as PacBell and Verizon.
Altrio has launched its services in a handful of areas, including Pasadena, Monrovia and Arcadia, and the company has applications pending in other Los Angeles County communities, including Glendale, Burbank and Sierra Madre.
Riordan is the first outsider to join the now 10-member Altrio board, said David Rozzelle, the company's chief executive. An informal discussion between Riordan and Altrio Chairman Jim Crawford at a recent Princeton University function (they are both alumni) started the ball rolling for the ex-mayor to join the board.
"The mayor has an interest in the broadband space and he's been interested in high-tech and the applications of high tech for a long time," Rozzelle said. "He brings an insight into issues the founding members may not have and the investors may not have."
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