Wednesday, August 02, 2006

Pepco's broken cable TV promise

Seven years ago today, Starpower received final approval from Montgomery County to provide cable television service to county residents in competition with Comcast (read original press release). At the time, Starpower was 50% owned by RCN and 50% owned by Pepco Communications, LLC (a wholly owned, unregulated subsidiary of Pepco). At the time, John McCallum was president of Pepco Communications, LLC which fell under Potomac Capital Investments (of which McCallum was also president).

In the original agreement, Starpower promised to wire 90 percent of County residents with competitive service within six years.

Now its 2006 and only a small portion of the county is covered by Starpower (now called RCN). What happened?

The only areas wired today are Gaithersburg (a separate deal from the County) and parts of Silver Spring, Takoma Park and Chevy Chase. Starpower ran out of cash and had to renege on their deal with the county in 2003. They also backed out of their commitments to Prince Georges County and the District of Columbia and other places.

A couple of years later, Pepco sold their 50% stake in Starpower to RCN communications.

Another broken promise from Pepco.

I hope the Pepco ratepayers did not subsidize their failed, risky telecom investment.


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