East Coast Firm Moves to Buy Troubled CommuniCom, ACCESS Cable Systems

Two of Los Angeles’ most troubled cable-television franchises--CommuniCom Cable TV in West Los Angeles and ACCESS in the city’s South-Central core--are being sold to a major East Coast company that plans to pour millions of dollars into repairing and building the operations, The Times has learned.

American Cablesystems Inc., a Beverly, Mass., company with extensive cable holdings in the East, has reached agreement to buy CommuniCom for $70.4 million and is expected to formally conclude a deal for ACCESS sometime this month, said Terry Soley, American’s director of development for California. Further terms of the ACCESS deal could not be released, he said.

The two deals, subject to a series of regulatory approvals, drew strong initial support by city officials hoping to improve CommuniCom’s problem-plagued service in West Los Angeles and to begin building a system in the largely blue-collar South-Central area, where ACCESS has been thwarted for three years by financing and legal problems.

The deals could make better service available to 315,000 households in West Los Angeles and provide the first cable service of any kind to about 180,000 homes in a region that includes Watts and portions of the Harbor Gateway Strip, city officials said.

“The primary goal is to serve those people, and if this company can do that, it’s the best thing for Los Angeles,” said Chuck Winner, president of the city’s five-member Telecommunications Commission, which must approve the transactions. Based on credit and management reviews of American Cablesystems, “the company has a good reputation and has operated well” in its other markets, which include New York, Florida, Illinois and Massachusetts, Winner said.

By acquiring CommuniCom, which filed for federal bankruptcy protection early last year, American Cablesystems would take over the city’s largest franchise--a densely populated area extending through Hollywood, Venice, Mar Vista and portions of downtown Los Angeles. The 4-year-old franchise has faced the highest complaint rate among the city’s 11 active franchises, for problems ranging from poor reception to slow servicing, city officials said.

Action on Unpaid Debts

On Monday, CommuniCom will seek federal court approval for a plan to resolve unpaid debts exceeding $170 million. If those debts are resolved, either by full or partial repayments, the firm will have a “clean slate” that would enable American Cablesystems to begin managing the operation later this month, interim CommuniCom President Richard E. Matthews said.

Completion of the purchase would occur early in 1987 if CommuniCom is able to renew its existing franchise agreement, which expires at the end of the year. Recent improvements in the firm under a court-authorized reorganization and the pending sale should help the firm win a new franchise, Matthews predicted.

“We now have 40,000 subscribers in Los Angeles, and there’s no reason (the company) shouldn’t have doubled that in the next year or so,” he said.

The city’s South-Central franchise was granted in late 1983 to ACCESS, a Los Angeles-based company that never has been able to begin work on a system.

ACCESS officials have said they cannot get loans to lay their cables because of a pending lawsuit filed by Preferred Communications Inc., which wants city approval to build in the same region, said Assistant City Atty. Ed Perez.

American Cablesystems has enough money reserves and financial credit to buy and begin building the system, the firm’s Soley said. American hopes to gain city approval for the acquisition by fall and to begin laying the system early next year, he said. Construction is expected to take three years and city officials said the arrival of service would render the lawsuit moot.