TCI, Century Complete Plans for Partnership

In a move aimed at improving local cable service, Tele-Communications Inc. and Century Communications Corp. have finalized an agreement to pool their subscribers in Southern California to speed the roll-out of new services, including high-speed access to the Internet and telephone calling.

TCI and Century first announced the planned partnership last December, in the wake of an industrywide drive to consolidate cable ownership within the nation’s cities to compete with rival satellite and phone companies. Today, major cities such as New York, Chicago, San Francisco, Phoenix and Dallas are dominated by single cable operators.

Los Angeles has lagged other markets in “clustering” because of the number of operators here and the scale of the region. This partnership will make Century a dominant cable supplier, with roughly 300,000 subscribers in metropolitan Los Angeles and 837,000 in Southern California. Media One serves about 400,000 customers in Los Angeles.

TCI, the nation’s second-largest cable operator, will contribute nearly 250,000 customers in Arcadia, Hemet, Los Angeles County and Ventura, for 25% of the partnership. Century, the No. 10 operator, will contribute 594,000 customers for the remainder. Century’s subscribers are in Anaheim, Brea, Chino, the eastern San Fernando Valley, Glendora, Hermosa Beach, Los Angeles, Redondo Beach, Santa Monica, Sherman Oaks, Ventura, Walnut and Yucca Valley.

TCI President Leo Hindery said the partnership should accelerate the roll-out of advanced services in the region, with high-speed Internet connections available to some customers in 1999 and telephone service available in 2000.

“We are going to make this the Cadillac service,” said Bill Rosendahl, senior vice president for operations for Century Communications of Southern California. Century is based in New Canaan, Conn., and controlled by entrepreneur Leonard Tow.

Sources say the deal makes it more difficult for computer billionaire Paul Allen to buy Century. Allen was interested in consolidating the Los Angeles market using the base of 300,000 subscribers he has acquired here. Sources say talks between Allen and Century broke off in late August over price, with Allen offering in the low-$30-a-share range, and Tow holding out for more.

Century shares closed unchanged Wednesday at $21, down from a 52-week high of $28.12. Sources say Allen has turned his attention to a few smaller acquisitions.

Analysts say Century may have a harder time rolling out these services than some other operators in the area because the company has angered many customers with its poor customer service and high prices.

After years of complaints from consumers, Century agreed to pay $12.3 million in refunds and rate reductions to about 135,000 customers under the terms of a settlement signed Tuesday with the city of Los Angeles.