Local cable TV providers debate outcome of Charter's troubles
WENATCHEE, Feb 02, 2009 (The Wenatchee World - McClatchy-Tribune Information Services via COMTEX) -- Will financially troubled Charter Communications pull out of the North Central Washington cable TV market?
Local cable TV providers are divided.
Charter failed to make a $73.7 million scheduled interest payment Jan. 15, according to a company spokeswoman and Reuters. It has $21 billion of debt on its balance sheets.
"What I don't think will happen is that they'll go out of business and stop offering service in Wenatchee," Dimitri Mandelis, president of East Wenatchee-based LocalTel Communications, said recently. "Someone will take them over. Service will continue."
LocalTel is one of two local companies that sells cable TV service over the Chelan County PUD's fiber-optic network. The other, also based in East Wenatchee, is Genext LLC.
Controlled by Microsoft co-founder Paul Allen, Charter, the country's fourth-largest cable TV provider, has hired an outside firm to negotiate a reorganization of debt with bond holders, Reuters reported.
Charter spokeswoman Anita Lamont said by e-mail that the company has 100,000 customers in Washington.
She said company officials were unable to specify the number of subscribers in North Central Washington.
Charter missed the interest payment, despite having more than $900 million in cash available, Reuters reported, leaving some analysts to suspect the company is considering bankruptcy.
Protection from creditors through bankruptcy could make Charter more appealing for takeover, the report said.
Drew Zabrocki, managing partner of Genext LLC, agrees a takeover could be a likely outcome of Charter's troubles.
But he added stiff competition from local providers and satellite TV companies could compel Charter to pull out.
"There are a lot of different avenues a company such as Charter could take," Zabrocki said. "If Charter were going to cut the bleeding, so to speak, I'd think one of the first markets they'd cut would be Wenatchee, primarily because of competition."
Zabrocki and Mandelis agree it would be good for their business if Charter folded.
"It would motivate more people to make a switch," Zabrocki said.
"If they went out of business, that would be good," Mandelis said. "We could get some new customers. ... But I don't think that's likely to happen."
Lamont said Charter expects to emerge stronger from its debt-restructuring process.
According to news reports, Charter scrambled late last year in negotiations to include some Seattle-based stations in its programming roster.
Charter customer service agents say Seattle stations KOMO, KING, KIRO, KCPQ/FOX and KCTS are all still included in its channel offerings.
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Christine Pratt
