Asheville City Council

Three hours poring over a cable ordinance is enough to make anyone’s head droop.

That’s what happened to Asheville City Council members as they attempted to digest the city’s proposed cable-franchise agreement with InterMedia during their Jan. 20 work session. They heard the beginning of a staff report from Assistant Attorney Patsy Meldrum (whose microphone kept going off and on), quizzed consultant Jean Rice, and heard a few comments from InterMedia General Manager Joe Haight.

“If we go for two more hours, can we survive?” wondered Council member Barbara Field, when the hour approached 8 p.m. “We’re on page eight — out of 80,” she lamented, flipping through the proposed ordinance and franchise agreement.

Council members had started their work session at 3 p.m., considering other issues before the cable quandary. “If we go much longer,” joked Field, “we’ll have to call out for pizza.”

So, at the suggestion of Council member Chuck Cloninger, they agreed to continue the painstaking review during the next Council work session on Feb. 3. The tasks include: setting up guidelines for any cable company operating in Asheville; defining the fees InterMedia would pay the city for a cable franchise; creating new public-, governmental- and educational-access channels; and more.

Just one week later, on Feb. 10, the public is invited to join the discussion on the cable deal at 7 p.m. at the Public Works Building on Charlotte Street.

For those residents inclined to participate, Mountain Xpress offers Cliff Notes on the history of the cable franchise and the negotiations to date:

• The city’s first cable agreement was signed in 1967, after being approved nearly 3-to-1 in a public referendum. The franchise was awarded to the now-defunct Thoms Broadcasting Company, which operated channels 2 through 13 on a 213-megahertz system. TCI took over the franchise, which is valid through 2002. That franchise was transferred to InterMedia, a separate but related company, in 1995.

• City officials have denied rumors that Rice, Williams & Associates — the cable consultants the city hired to help renegotiate the franchise — have been biased toward InterMedia. Meldrum stated, “Rice Williams have not now, [nor] ever have, represented cable companies.”

• Representatives Citizens for Media Literacy, a nonprofit group based in Asheville, raised concerns about the amount input from the community — especially the minority community — in this franchise process. In response, Meldrum reported that, in 1995, the consultant conducted a community needs-assessment survey that did solicit responses from minority groups such as the local NAACP chapter (which did not reply), business organizations (the Chamber of Commerce and the Council of Independent Owners), various local schools, colleges and universities (including predominantly black Shaw University, which did respond), Pack Memorial Library, and many others. The assessment concluded that there is communitywide support for public-access channels.

• There are differences of opinion as to who first requested early negotiations for a new franchise. InterMedia’s Haight insisted that it was the cable company, which planned a major rebuild of the cable system in Asheville. Haight explained that, to recoup its multimillion-dollar investment in that project, InterMedia wanted a contract that extended far beyond the 2002 expiration of the current franchise. But Mayor Leni Sitnick countered that, actually, the city proposed the negotiation to clear up a long-standing dispute over how franchise fees are calculated. In fact, during the mid-1980s, the city was on the brink of revoking TCI’s franchise over that one issue, Sitnick pointed out.

• During the beginning of franchise discussions in 1995, the city asked InterMedia for a 750-megahertz system (previous franchise-holder TCI had already announced plans to upgrade from a 350-megahertz system). According to Haight, InterMedia wanted to add more channels to its system, and to do that, the company needed more megahertz. As Haight explained, each analog channel requires 6 megahertz.

“What’s analog?” asked Council member O.T. Tomes, requesting a little more English.

“Your regular old television channel,” Haight replied.

Haight went on to point out that technological advances over the past year-and-a-half have made that planned expansion to 750 megahertz “a non-issue,” in InterMedia’s view. That’s because, when InterMedia was first considering the expansion, the capacity of its fiber-optics cables for digital transmission was just 6-to-1 — six digital channels for each analog channel. Now that capacity is 14-to-1 — which Haight maintains leaves plenty of room for future digital channels (nearly 1,000 channels are possible on InterMedia’s proposed 550-megahertz system). The system also will be able to handle data-transmission services (such as the Internet, which InterMedia will offer this spring).

The consulting firm, Rice Williams, countered that the megahertz capacity is an issue for the city to consider. Council member Tomes is among those expressing concern about meeting future community needs amid rapidly advancing technology.

Vice Mayor Ed Hay noted that, although digital channels are supposed to provide better picture quality and a few other perks, “Who could afford the new digital televisions right now?”

• Haight clarified that each city and county school near InterMedia’s lines — from the high schools to the elementary level — could get a free cable and Internet connection, along with a modem able to provide up to eight line connections. Representatives from Citizens for Media Literacy had expressed concern that the franchise agreement wouldn’t address this crucial way for schools to connect to the modern world.

• There has been confusion about the Internet and the planned I-net services. An I-net is a high-speed data, video and voice (telephone) institutional network, planned for city buildings in the proposed agreement. It is separate from future Internet services. According to Haight, the I-net is a closed system, meant for city use, that would connect City Hall to city fire stations, Asheville High School and the city’s middle schools, various city departments, some community centers and libraries (those located in buildings that house fire stations, such as in east Asheville), and a few more.

Meldrum pointed out that the city had requested more I-net connections, including one for Pack Memorial Library, but that the city had opted for fewer sites, to minimize the effect on cable subscribers’ bills: Under the proposed deal, InterMedia would pay 40 percent of the $380,000 projected cost of laying the lines, and cable subscribers would have to cover the remaining 60 percent over a seven-year period (8 cents per subscriber per month).

• Under the proposal, InterMedia would own the I-net lines, even though cable subscribers would pay for most of the cost. The rationale is that the four optic fibers dedicated to the I-net system are bundled with the new cable lines — most of which have already been installed, Haight explained.

• The proposed agreement with InterMedia is not exclusive: Theoretically, another cable company could also operate in Asheville, provided it met the same standards, as outlined in the city’s proposed cable ordinance.

But that’s not likely, according to Rice. Although the 1996 federal Telecommunications Act held the promise of encouraging more competition in the industry, that hasn’t happened in communities the size of Asheville. Cities that do benefit from cable-company competition tend to have much denser markets — that is, bigger populations, with more cable customers.

• The proposed agreement with InterMedia is, in effect, a 17-year franchise (the 1967 agreement is a 35-year contract). Chapel Hill recently adopted a 20-year agreement for its cable franchise, and Buncombe County’s covers 16 years. Ten- to 15-year franchises are typical, Meldrum said. However, representatives of Citizens for Media Literacy have asserted that five- to seven-year agreements are more common — and more practical. Tomes said that, as far as he’s concerned, the term of the contract is “a stickler” of an issue, and it should be shorter than what has been proposed. But InterMedia is pushing for a long term.

• The proposed agreement includes customer-service guidelines that the 1967 franchise didn’t tackle: InterMedia would not be able to charge a disconnect fee for services (unless it informed customers up front); newly annexed areas would have to be provided with cable services (assuming they met density requirements); InterMedia would be required to schedule service visits within a four-hour time window; and more.

• The city could negotiate for more access channels for PEG (public, education and government use) — as well as more money to fund them, said Haight. The current proposal calls for three PEG channels at the outset (and one more down the road, should the other three get filled up with programming).

The plan also sets aside $200,000 for public-access operating costs (mostly equipment purchases) in the first two years, and it lines up about $36,000 per year for ongoing financial support — but not until the eighth year of the franchise. Subscribers would supply those funds through a 15-cent monthly charge on their cable bills. Haight said that if subscribers were willing to pitch in more, that annual support could be greater.

Sitnick remarked that every time she looks more closely at the proposed agreement, she finds another example of the taxpayers footing the bill.

But a nonplussed Haight went on to add that — come the fast-approaching digital-channel age — those four PEG channels could multiply by 14, if the analog channels were converted to digital.

• The city would have to shell out about $14 million to buy InterMedia’s Asheville cable operation, Rice estimated. So far, only about 60 cities nationwide have made such a move, and most of those also own local electric companies and other utilities, making it more feasible. InterMedia could not be forced to sell to the city in the first place. Just the same, Sitnick wondered, “What if we were Joe Haight and InterMedia? What kind of potential revenue [for the city] are we talking?” More than $7 million, Rice replied.

• On its governmental channel, the city could scramble special programming, such as firefighters’ training videos designed for broadcast only in fire stations or firefighters’ homes.

“You mean we could scramble City Council meetings?” Hay asked.

“We’re already scrambled,” joked Field.

And that was, as she noted, after just the first eight pages.

Sell city property on Biltmore?

What do you do with all that city property?

Over the years, the city of Asheville has become quite a landholder: It owns a pair of 22,000-acre watersheds, dozens and dozens of residential lots (taken over as compensation for delinquent city taxes), 181 undeveloped acres at Richmond Hill, three big parking decks, commercial property such as the City Development Building on Haywood Street, and … Be Here Now.

That’s right. The city owns the building where local music venue Be Here Now operates on Biltmore Avenue. The city also owns the adjacent buildings that house nonprofits Habitat for Humanity and the Community Arts Alliance, as well as office space for Deverger Systems.

The city leases those properties to all of the above groups at rents way below market prices, in exchange for making much-needed structural improvements. These improvements were much-needed: When the city acquired the properties many years ago, they were in various states of disrepair, according to city staff. Be Here Now’s building used to be a pool hall, and Habitat’s digs used to house the Plaza Tavern — a hopping place guaranteed to rate a paddy-wagon visit or two on a weekend night, according to Ed Vess, the city’s coordinator of field services.

The previous Council had instructed staff to consider which properties could be sold off to supplement the city’s revenue. Vess, checking the mood of the current Council, asked, “What I need to know is, whether to keep them or sell them.”

Vess pointed out that, with today’s downtown real-estate market, the properties are worth much more than what the city paid for them. And the current rents being charged are, in some cases, more than $1,000 less than the going rate. The city could sell now, or it could continue leasing and gradually bring those rents up to competitive rates. The options “would be a good deal, either way,” said Vess.

Hesitant to kick anybody out the door, the new Council asked for more information. Get the buildings appraised, they said, and make a chart comparing sell-prices against market-rent incomes.

“Let’s develop a fair strategy for getting [those rents] up to market rates,” Council member Chuck Cloninger said.

Vess will report back to Council in a few weeks.

Ellison urges Council to back YMI

“Stick with us now,” Asheville attorney Gene Ellison urged Asheville City Council members on Jan. 20.

He has spent much of the new year heading up the reorganization of the YMI Cultural Center, a longtime gathering place for the city’s African-American community.

Despite the group’s long history and the historical significance of its building — which is listed on the National Register of Historic Places — the YMI has suffered serious financial and organizational problems over the past four years. Ellison reminded Council that the center has been harmed by the lack of a director, a $40,000 debt to the Internal Revenue Service, and past-due mortgage payments.

Ellison put together a reorganization team to save the center. After 19 days of work, Ellison reported, “at least we’re now breathing.” The team recently convinced the Buncombe County Commissioners to give the center $25,000 — money that had been withheld last year because of the confusion surrounding the YMI’s financial problems.

With those funds, Ellison noted, “For the first time in two years, all the employees got paid, and the bills got paid.” The IRS accepted a $10,000 payment toward the center’s tax debt, and NationsBank — the mortgage holder — is working with the committee to decide how to pay off the rest. In addition, the Bank of Asheville is considering whether to refinance the mortgage, Ellison indicated.

That leaves one more piece to stabilize the center’s finances: The release of $25,000 that City Council set aside for the YMI last year. Like the county, the city withheld its contribution because of the financial confusion.

Ellison stressed that he and the reorganization committee are striving to make the center fiscally responsible and accountable, while working to get more events and programs going.

The four-story building, which contains a gallery, an auditorium, office space and other facilities, “is a jewel that’s just been sitting there,” Ellison declared. He tossed out programming ideas, such as the possibility of using the space for Stephens-Lee Community Center activities, while that building is being renovated; bringing high-school students throughout Buncombe County to a Martin Luther King exhibit; hosting an environmental exhibit for the U.S. Forest Service; and getting Council to hold a reception or meeting in the historic building.

“It’s not a black thing. It’s not a white thing. [The Center] serves as a catalyst for all our community,” Ellison proclaimed.

The committee has identified nearly 20 grants the center might be eligible for, to help meet its $120,000 annual operating budget and pay for improvements, such as air conditioning and an elevator. Ellison also emphasized the need to find a new director.

Though impressed with Ellison’s presentation and the committee’s work so far, Council members nonetheless took a cautious approach.

Sitnick noted that she had appointed a committee — Hay, Tomes and Field — to meet with Ellison and his team.

Sitnick said Council supports efforts to revitalize the YMI Cultural Center and the rest of The Block (Eagle and Market streets, south of Pack Plaza). However, she announced that no action on Ellison’s funding request will be taken until Hay and his committee report back to Council.