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Technology Stocks : LAST MILE TECHNOLOGIES - Let's Discuss Them Here
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To: lml who wrote (2601)12/15/1998 8:00:00 PM
From: DenverTechie  Read Replies (1) of 12823
 
Good questions, lml. No easy answers though.

1. The answer to why renew the franchise is kind of straight forward. The cable company makes the promises up front at renewal time so that they can get renewed, then build in penalty clauses if they don't meet the upgrade dates promises at renewal time (and of course hardly ever pay due to the loopholes). But the key is that THEY ALREADY HAVE THE RENEWAL IN THEIR HAND based on the upgrade promises. Pretty nifty deal, right?

2. Length of franchise agreements vary all over the place. Most are anywhere from 5 to 10 years. I've seen some as long as 15 and 20 years, almost none less than 5 years (has to do with that capital intensive thing you discussed and time to recover investment and try to make profit).

3. Very few have early termination provisions. I've never seen one like that or heard of it happening. Every now and then a cable company will have such horrendous performance on rates and customer service that a municipality will try to oust them. A city around Denver recently tried to replace TCI at its last renewal date. The city government actually puts the matter to a vote and the people can decide. Wouldn't you know they voted to replace TCI there and sure enough TCI came back, made a bunch of additional promises, with penalty clauses, gave the government a free institutional network, etc. and people voted to keep them! That was after the city council let everyone know there would be disruption of service and higher rates if TCI was replaced (someone would have to buy the existing plant at inflated valuation of course).

4. It's nice that Century has an agreement with @Home but @Home has a very specific build plan and their own agenda. They will eventually get to you based on a schedule that only they know, where-ever your system fits in the grand scheme of things.

Cable business is interesting, no?
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