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Neb. City Eyes Cable as Utility No. 5

With an eye on launching their fifth municipal utility,
officials in Hastings, Neb., are weighing the possibility of acquiring their local cable

Despite transferring their franchise from
Tele-Communications Inc. to Bresnan Communications, officials in the community of 23,000
said they might try to purchase the local 6,000-subscriber network after the franchise
expires in 2001.

"It's something that we need to explore,"
city administrator Barbara Bramlett said. "This could be our fifth [utility]."

Bramlett said the city's franchise gives it the right
of first refusal if an offer is made to acquire all or part of the local cable network.

Not surprisingly, the two MSOs disagreed with the
city's contention, arguing that their recent joint venture did not trigger the
purchase provision in the franchise, since TCI still owns 50 percent of the Hastings

"Obviously, we must have made our case successfully,
because the city decided to transfer the franchise, as requested," Bresnan
spokeswoman Suzanne Thompson said.

TCI and Bresnan announced in late 1997 that they were
creating a six-state partnership with Blackstone Capital Partners III Merchant Banking
Fund L.P. that would serve 660,000 cable subscribers, including those in Hastings.

Nevertheless, Bramlett said, operating a cable system would
be a natural for a city that already has four municipally owned utilities.

"We already have the overhead in place, so it would be
simple for the city to become its own cable-service provider," she added.

Such an acquisition would allow the city to connect its
municipal facilities, as well as to offer new services such as remote meter-reading, she

However, the city has elected to wait until its franchise
expire in order to give Bresnan time to make good on several system improvements that it
has promised.

"Bresnan has made representations to the city about
technical improvements like two-way interactivity," Bramlett said. "We thought
that we'd give them a chance to perform."

Thompson said the company is prepared to follow through on
its promises.

Bresnan has an "aggressive rebuild" plan for the
Hastings system, she said, including an upgrade to 550 megahertz from its current capacity
of 360 MHz. It also plans to interconnect the network with its operations in nearby Grand
Island, Neb., thereby making both systems larger and allowing it to deploy a host of new

"We've got a track record of operating good
systems," Thompson said. "And we intend to demonstrate that it's in the
community's best interest for Bresnan to operate the system."