With four years left on the current contract, why should the city move forward now with a new cable-TV franchise agreement?
That was the question most frequently asked at a Feb. 10 public meeting hosted by the Asheville City Council, to give residents a chance to learn about the proposed cable-franchise agreement with InterMedia.
City staff’s short answer was: Money.
“Every year [that] we don’t do something, we’re losing money,” explained Asheville City Manager Jim Westbrook.
Under the proposed agreement, InterMedia would pay $150,000 to settle a dispute over franchise fees owed for the past three years. And the new agreement’s clarification of how those fees are calculated would net the city an additional $240,000 over the next four years, Westbrook pointed out.
That makes the new agreement worth $390,000 — close to what consultants Rice, Williams Associates estimated the cable-franchise holder had underpaid from 1993 and 1995.
Assistant City Attorney Patsy Meldrum noted other advantages, including getting three new public-access channels right away, instead of waiting until the current franchise expires in 2002. The new agreement would also set up more consumer protections for cable subscribers in the city, and it would allow the city to get institutional-network lines installed for one-third the cost of doing it later.
“What about the rest?” asked Asheville resident Mary Ellen Brown.
She and other residents argued that the franchise-fee settlement and the amount of funding set aside for the public-access channels — about $524,000 over the course of the 17-year agreement — are not enough.
Minister Steve Burleson estimated that it costs more than $100,000 a year to operate a public-access channel, and at least as much to set one up.
He should know: In 1984, Burleson helped create what has since become InterMedia Channel 10 — the existing public-access channel, dedicated to the city schools. With no dedicated funding for the channel, and with the schools able to fill only a fraction of the weekly programming time, Burleson says the operating costs were paid primarily by local churches that leased air time for their programs. “There are options out there,” he observed.
Consultant Jean Rice remarked that funding for public-access channels varies around the country. “It depends on what the local resources are,” she explained, citing the possibility of seeking foundation grants. But Rice also stressed that, in many cases, the costs end up getting passed on to subscribers.
“You see more and more of [the costs] on the [cable] bill,” she warned.
Mark Rosenstein, who serves on a local committee calling for expanded public access, suggested that InterMedia should offer the city an outright grant to help fund the public-access (or PEG) channels. Several residents in the audience backed that idea.
City Manager Westbrook called the issue “a policy decision”: City Council members, he said, can determine how much they want to spend on PEG channels in each year’s budget. But either way, he argued, residents will end up paying for the new service — whether through city taxes or subscriber bills.
If those are the advantages, what are the disadvantages of forging a new agreement now, Citizens for Media Literacy Director Wally Bowen wanted to know.
“Federal laws could change [to our advantage],” Rice replied. Current Federal Communications Commissions regulations, for instance, give cities little or no control over cable rates, she explained.
And Meldrum observed that, “We could get more [for public-access funding].” But, like Westbrook, she seemed skeptical. “We could get less,” she added.
Westbrook remarked that he expects changing FCC regulations to give cities even less control. After all, cable rates for many cities will be deregulated next year, even under the existing FCC guidelines.
But there’s one major advantage the city would have if it delayed franchise negotiations at least until 1999 — “The ability to deny,” Rice said.
At that point — three years before the current franchise expires — FCC regulations would require a more formal negotiation process than the one the city completed last fall, Rice explained. And the city would have the power to deny the franchise, if it didn’t like the proposed agreement.
“Most [franchise negotiations] are done informally. If [the municipality] doesn’t like the results, it goes to the formal process,” said Rice.
Perhaps that’s why former Asheville Vice Mayor Chris Peterson urged Council to delay a decision on the franchise for one year. “There are a lot of flaws in this agreement,” he said. Peterson seemed particularly concerned about the franchise-fee dispute, which was first brought up during his term on Council in the early ’90s.
Peterson suggested that Council appoint a committee to review the proposed agreement, solicit bids from other cable companies, and consider owning its own cable system. “If you don’t feel right about [this proposal with InterMedia], don’t do it right now,” he urged.
Rosenstein remarked that how the city negotiates with InterMedia — and what it gets — “all boils down to money and will.”
Another city resident asked Council members — who had remained steadfastly quiet during most of the meeting — where they stood. A public hearing is scheduled for Feb. 24, and Council members could vote on the proposal after that.
Council members aren’t supposed to voice opinions on an issue before holding a public hearing, according to City Attorney Bob Oast.
But Council member Chuck Cloninger appeased the concern by responding, “It’s too soon to tell.”