Cablevision expansion in Milan on hold

Company plans to reassess the area after failing to sign enough customers

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Cablevision has closed its circuit in Milan for now, saying it hasn’t signed up enough customers yet to make ongoing cable installations worthwhile.

In a meeting with Milan town officials Sept. 24, Adam Falk, Cablevision’s Vice President for Government and Regulatory Affairs, said no further installations would be done while the company evaluates conditions in the area.

Those conditions include extra installation costs, which have apparently caused potential customers to shy away, as well as extra utility pole replacements that doubled Cablevision’s construction costs. Also blamed was the lack of anticipated housing developments in the north part of the town.

Supervisor Bill Gallagher asked Falk, “Under worst circumstance, we have a 15-year contract — five years of it is gone, 55 percent of the town is finished, approximately — I want to see the whole town finished and I would like to know what is the best approach for the town, working with you, so that we can accomplish that?”

Falk replied that the company needed more time to evaluate the sign-up rate in Milan and consider whether any circumstances, especially new customer sign-ups, would change in the future. He estimated that such a study could be completed in no less than five years, “certainly within the remaining nine years of the contract.” But he reaffirmed there would be no work on new cable line until the company completes its evaluation.

However, residents who live in areas of Milan where cables have already been installed can still get connected if they want.

Falk said the sign-up rate among potential customers has been lower than predicted because so many homes are set back from the road.

“The standard installation costs … are normally absorbed by the company if the customer is within 150 feet of the existing plant [at the road],” he explained. The increased costs, he added, have affected residents’ interest in signing up for cable service.

Per hundred feet, Falk said, the estimated cost to a new customer was running between $2,000 and $4,000, depending on the need for special wire, whether there was an existing pole for attaching the cable, and how much labor was required.

Falk also cited unforeseen costs to Cablevision during the “make-ready” phase when it was discovered that many utility poles in Milan needed to be replaced in order to accommodate both power lines and cable service lines. Hundreds of new poles were installed during the last five years with the cooperation of Central Hudson, Falk said, which doubled the estimated construction costs.

Finally, Falk said, when the company entered into the contract with Milan in 2008, it believed that new housing developments outlined in the town’s 2007 comprehensive plan would be built. They haven’t been, he added.

“There were eight separate projects, many of them in the northern portion of the town that today are the areas that don’t have service….[T]hose developments would have…provided a better situation for us to build,” Falk said, indicating that potential customers from those developments would have offset lower sign-up rates in less dense parts of the town.

Councilwoman Marion Mathison summed up the situation this way: “You basically have a return-on-investment situation that is not feasible. It is not a situation which your corporation, strategically, can live with. So, there are…strategic decisions that Cablevision has to make about where they put their investment money. Is that an accurate statement that would describe what is impacting us?”

Falk said that it was.

Mathison then asked if there was anything the board could do to speed up the five-year evaluation process.

In reply, Falk asked the town board to make sure residents know about cable availability where cable lines have already been installed.

Gallagher also asked that Cablevision take another look at Spring Lake Road, which had about 20 houses on half-acre or less parcels. He said the delay in receiving Cablevision there was a sore point among some residents whose neighbors get cable from Time Warner Cable because they live in the Town of Red Hook. The two towns’ borders cut across the road (and across several parcels).

Falk suggested that Cablevision could explore a deal in which Cablevision could give Time Warner a waiver to extend their coverage to the rest of that road, as has been done in other places.

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