Kagan, Falcon in U.K. venture

A joint venture between media analyst Paul Kagan and the nation’s 12 th-largest cable operator acquired the rights to build a system in the United Kingdom that will provide both cable and telephone service.

Kagan’s Camelot Cabletel Inc. formed Avalon Telecommunications Inc. with Falcon Holding Group to acquire licenses to build and operate a cable-telephone system for 230,000 homes in Teesside and Darlington, two English communities just south of the Scotland border.

The company bought the licenses from Nynex CableComms, a unit of the New York Baby Bell telephone company, for an undisclosed amount.

Kagan couldn’t be reached Tuesday.

Camelot and Falcon formed a franchise-hunting partnership a few years ago to apply for cable franchise licenses throughout the U.K. When that company merged into the Nynex unit last year, Camelot and Falcon retained right to repurchase the licenses if Nynex wanted to sell them.

Nynex had intended to sell the Teesside and Darlington licenses to US Cable Corp., a midsized MSO based in New Jersey. But Avalon Camelot and Falcon exercised their option to buy the rights on the same terms.

Building the system, which should begin by the middle of next year, could cost as much as $ 200 million. Avalon is working on lining up investors, in either private or public markets, to pony up the money.

“We’re investigating our possibilities,” said Clive Fleissig, vice president, international, at Falcon. “We’ve had a number of very positive discussions with a number of groups.”

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