The City of Cambridge has awarded its covered 15-year, $32 million provisional cable television license to American Cablesystems of Cambridge, completing the first step towards wiring the city's 42,000 homes and 17,000 rental units.

Citing American's prove track record in financing and managing cable systems throughout Massachusetts, City Manager Robert W. Hcaly announced his decision at a City Hall news conference on March 22.

City officials and American Cablesystems have yet to iron out the specifies of their agreement State regulations require that the parties sign a final contract within a year.

The entire 123-mile cable system, to be located in one of the country's most densely populated urban areas will be constructed 12 months after the final license is granted. American spokesman Terry M. Solely said in a Series of public hearings last Winter American who said during the year, long application process that it would agree to a two-year rate freeze for its Cambridge subscribers.

The Beverly-based firm, the nation's 27th largest cable company. Prevailed over two other budders for the lucrative Cambridge cable market: Cambridge Cambridge Corporation(3C) and the Cambridge consumer Owned Tele communications. Inc. (Cable Plus). American constructed and currently operates cable systems, in Arlington. Quincy, New buryport, and Situate and in parts of New York, although the Cambridge system will be the most extensive urban project the company has undertaken so far.

Healy called American's application "the most thorough, the most conservative, and the most realistic approach to financing the system" of the three competitor.

"We have seen all too clearly the consequences arising from less than adequate financing in cable systems, "Healy added, apparently referring to financial difficulties recently encountered by Boston's cable franchise

America proposes to charge $3.95 for its basic subscriber service which will include 12 neighborhood-based channel. A second subscribe option priced at $6.95 will offer the 12 local channels plus five satellite channel and 12 regional to Cambridge television viewers will offer nine cable satellite stations and additional pay service such as MTV and Home Box Office.

Initial construction costs for Cambridge's cable system to be shouldered by American are expected to top $18.5 million. That figure does not include additional payment to the city of $400.000 to $600.000 for community television and public school projects.

Cable on Campus

Although the city two major universities have been talking with American official in recent months neither Harvard nor MIT, Cambridge's largest landowners, have negotiated for the wiring of their campuses or their tenants may subscribe to cable television even if the landlord doesn't approve.

In its initial report last year, the city made numerous demands on the three bidders. It asked for an original plan, municipal access to the cable station, and sensitivity to the needs of Cambridge's diverse neighborhoods.

"This was the single most difficult decision I've had to make as city manager," said Healy. The city manager, who was ultimately responsible for awarding the license, poured over thousand of amended application, state regulation, and publication testimony in preparation for the announcement.

Of the two cables companies that did not win the Cambridge's license 3C representatives said their firm would dissolve while Cable Plus official said that they would consider application Healy's decisio