SPECIAL REPORT:

City’s Proposed Cable Contract Lacks Public Access TV Provisions

PATV Advocates Urge City Council to Hold Out for a Better Deal.

ONE OF THESE IS NOT LIKE THE OTHERS: Examples of how the Mayor’s Office spends money on cable access productions are shown in the top three photos. Channel 21’s soundstage Channel 21’s master control room Channel 21’s studio control room Public access Channel 5’s production facilities—four VHS tape decks in a corner of the Mayor’s Cable & Communications office The City’s proposed franchise agreement would allow the Mayor’s Office to continue distributing access funds as it sees fit.

According to Bunnie Riedel of the DC-based Alliance for Community Media (ACM), franchise agreements are "generally for ten years, with a five year review.” However, the City’s proposed agreement would determine Baltimore’s cable policy and the fate of local, independent television media for the next 12 years.

The terms of the draft agreement stipulate that Comcast will pay directly to the City the standard franchise fee (5 percent of local cable revenues), plus $700,000 per year in capital funds, to be collected via a $6-per-year increase in cable subscribers’ bills. In exchange, the City effectively guarantees Comcast a captive, competition-free market in the Baltimore’s residential neighborhoods. (Unlike phone companies, cable companies are not required to let competitors use their networks.)

There is no requirement in the draft for either Comcast or the City to provide any funds for PATV stations. Instead, the contract leaves it to the Mayor’s Office to decide how to apportion the capital funds between the government’s cable Channel 21, the local education Channel 7, and PATV Channel 5 (together known as “PEG” channels—i.e., PATV, education, and government).

Currently, the City’s budget for cable access comprises $1.1 million for the Mayor’s Office of Cable & Communications (MOCC), which produces the government channel, and no money for either PATV or education access.

MOCC Executive Director Marilyn Harris-Davis said that much of her office’s budget comes from a lawsuit settlement rather than from City revenues. The cable company had overcharged subscribers for their late fees, and it settled for $12 million when a class action suit was filed.

Michael Shea, a public access volunteer who provides tapes of local and national news talk shows for Channel 5, wondered, “Why didn't any of that [settlement] money go to public access?" Shea maintained that because the public was overcharged, the settlement money, in his opinion, should have have been applied toward an access channel that the public can use rather than to the government channel.

PATV Channel 5 currently has no operator, no studio, and no funding. Its signal and programming are controlled from the MOCC.

PATV proponents claim that the favorable contract terms the City proposes for Comcast—e.g., there is no provision for a share of Comcast’s revenues beyond the standard franchise fee—might have something to do with the thousands of dollars in contributions Comcast and its executives made to Mayor’s O’Malley’s BELIEVE campaign and his campaign for reelection.

“Ideally we’d love [Comcast] to fund public access,” said Harris-Davis. “But it’s a negotiation. Comcast has points they make with us that they put money into a lot of Baltimore City initiatives. They’re good community partners. When you talk to the Comcast people, they give you a whole laundry list of the things they do in Baltimore.”

Harris-Davis stressed that the contract terms are not final. “The Council hasn’t approved the agreement yet,” she said. “They might not like it. They might say that Comcast needs to give us more money, which would be a good thing.”

Amanda Bowers, a spokesperson for the PATV advocacy group Baltimore Grassroots Media, charged that the community’s concerns were “completely ignored by the Mayor’s Office with regard to our requests for public access. We weren’t given given one penny from the franchise fee, there’s no percentage of the bandwidth, and the worst part is that the money for access that is there goes directly to the City rather than public access. If history is any indication, once the City gets hold of the money, all of it’s going to go straight to the Mayor’s channel and none of it’s going to go to public access.”

When asked if the Mayor would direct some of the capital funds toward public access and education channels, Harris-Davis replied, “We haven’t really planned that yet.”

“The correct answer would have been ‘Of course,’” said Dave Ward, a former Board member of the Baltimore Cable Access Corporation (BCAC), the nonprofit that operated Channel 5 for seven years before running out of money and going bankrupt in 2000. “What other answer could there have been but ‘Of course’?”

Bowers maintained that a well-maintained public access station could provide the independent perspective lacking in television media. All commercial TV stations broadcasting locally are owned by media conglomerates numbering among the nation’s 20 largest station groups, including the right-leaning Sinclair Broadcasting Group, which owns Channels 45 and 54. (Baltimore-based Sinclair famously refused to broadcast the “Nightline” episode in which Ted Koppel read the names of American servicemen killed in Iraq.)

Hundreds of channels are available on cable, but most of them are owned by the five media conglomerates that control commercial broadcasting. Comcast itself refused to air an antiwar ad during Bush’s 2003 State of the Union address.

According to a 1998 study by the Project on Media Ownership at New York University, the domination of Baltimore’s local news by big-business entities has had a negative social impact. “Through their routine overemphasis on local crime, the commercial TV stations in Baltimore have helped make the city poorer by affecting how viewers perceive the city,” according to the study. “While crime is a reality on the urban scene, the daily televised prominence of violence in the broadcast news—the ‘if-it-bleeds, it-leads’ formula—is inadvertently bleeding the life and wealth out of Baltimore.”

PATV advocates argue that public access stations can provide a window into the less sensationalistic side of Baltimore that the commercial stations ignore. “Baltimore should have its own vehicle to put information out to the community, about the community, by the community,” said Marvin “Doc” Cheatham, a local radio and PATV personality. “All we’re asking is that the community be able to educate themselves about issues and be a part of doing that education.”

Both PATV advocacy groups and the City’s own cable needs assessment study agree that sustained funding is essential to making public access channels viable. Stations need money for ongoing operating expenses (e.g., staff, utilities, rent) in addition to capital funds (e.g., construction/renovation and equipment costs). Bowers drew attention to a survey by the City’s Cable Advisory Commission, which found that “nowhere in the U.S. has a station been able to operate over the long haul on fundraising alone” without funding through the cable company.

Harris-Davis made it clear that allocating the franchise fee toward anything other than the City’s general fund was never seriously discussed because of Baltimore’s ongoing budget crisis.

Jim Horwood, an attorney with Spiegel & McDiarmid who specializes in PATV provisions in cable franchise renewals, said the law makes it “difficult to require operating funds of the cable company but it could be negotiated as part of a trade-off. The cable company would argue that they can’t agree to this because it would violate their statutory rights, but I don’t think that’s a correct argument.”

In Baltimore, there was no need for Comcast to make that argument because the City’s attorneys never put the issue on the table. According to Ernest Crofoot, the City’s lead counsel in its negotiations with Comcast, the City never considered negotiating for PATV operating funds. “Cable law allows us to negotiate for a capital cost contribution but not a charge for operating costs for public access,” said Crofoot.

Many franchise agreements across the country do require the cable company to provide annual operating funds for public access, either as a flat fee or as a percentage of gross revenues, above and beyond the franchise fee. For example, Washington, DC’s recent franchise negotiations with Comcast awarded DC public access channels 1 percent of local cable revenues per year (approximately $600,000) on top of the franchise fee, with an additional 1 percent for capital expenses to be divided among all PEG channels. Baltimore itself has a separate cable franchise agreement for the Inner Harbor area in which the operator, Flight System Cablevision, must provide 2 percent of its gross revenues for PEG operating costs (though all of it goes to the Mayor’s Office). The agreement was approved in 1999, at which time Harris-Davis was director of the MOCC.

"Are our elected officials going to tell us that their constituents deserve less than what DC and these other cities demanded from the cable company for their citizens?" asked PATV volunteer Michael Shea. “Actually, the City’s in a great bargaining position because Comcast doesn’t want to lose the franchise,” Dave Ward said. “The City can say, ‘Look, give us money for public and education and government access in addition to the franchise fee, and if you don’t, pack up your cables and get out. We can deal with someone else.’”

Harris-Davis maintained that it is difficult to attract cable companies to Baltimore. “We have a tough infrastructure to work with. So looking at it from the eyes of a cable system, it’s an expensive city to maintain. That kind of dilutes our leverage.”

In a March 19 panel discussion on Baltimore public access, Marion Ware, director of Carroll County’s Community Media Center, said that Ms. Harris-Davis “doesn’t need to be concerned—nor do any of us—about how much the cable company has to pay. Politicians—I don’t know if it’s because they’re not informed or what—seem to always be so concerned about the cable company, and it’s ridiculous. The cable operators make forty to fifty percent net profit, and the net is going up.”

Comcast, the largest cable operator in the country, claims over 30 percent of the nation’s cable market. It earned $262 million in net profits last quarter alone, and by its own account maintains an operating cash flow of approximately $7.5 billion. Increased profits have not translated into savings for Comcast's subscribers. Since 1996, cable TV rates have increased at three times the inflation rate.

In addition to the $8,250 Comcast and its executives gave to Mayor O’Malley’s reelection campaign and the $35,000 the company gives annually to his BELIEVE campaign, at least nine Council members have also received contributions from Comcast and its executives. Council President Sheila Dixon received $4,500 in last year’s primary from Comcast entities.

Judith Lombardi, an assistant professor of sociology at Villa Julie College and former BCAC voluteer, said the competition for PEG resources between the government and public access channels undermines the City’s usual representative role. “It’s not right that we’re not involved in negotiations,” she said. “Where’s our representation? We’re not at the table.”

When asked whether it would have been possible to have professional consultants or counsel at the table during negotiations to represent PATV interests, Crofoot declined to answer, calling the question “inappropriate.”

Linda Barclay, of the City's Department of Legislative Reference was more forthcoming. "This is between the Mayor's Office and Comcast," she said. "That's normal."

ACM Director Bunnie Riedel, who has observed the franchising process nationwide, said, “Typically in franchise negotiations you have all kinds of people at the table, and, especially in cities the size of Baltimore, you definitely have professional consultants to push for favorable access provisions.”