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BARBWIRE
by
ANDREW BARBANO

Cable TV showdown at city hall

Expanded from the Sunday, 4-4-2004, Daily Sparks, Nev., Tribune
An edited version appeared in the 4-8-2004 Comstock Chronicle

This Wednesday, the Reno City Council may approve a new 15-year franchise with Charter Communications. Don't let them. There is no good reason to move so rapidly on a recently published agreement with which the citizens committee I chair has found so many flaws. Worse, Washoe County, Carson City and soon Sparks will be negotiating new cable deals and looking to Reno's as the model. Heaven forbid.

After more than two weeks of living with and holding hearings on the new franchise draft, I have concluded that it is indefensible and irredeemable in its present form.

Worse, the intention of the city staff as instructed by the city council is now quite clear: all that matters is getting quick cash from Charter. That money comes from you, so you should be quite concerned.

As I've often noted, don't feel smug if you don't subscribe to cable. You have by no means beaten the system. The bloviated rates charged by cable set the area standard for alternative service prices, as they will for high-speed Internet providers who are getting into the program distribution business.

Charter enjoys the market dominance of a government granted, deregulated monopoly with far more than 50 percent of local household penetration. Until true competition evolves, every television consumer will continue to pay inflated prices for much more than just television. Over-the-air stations now have to negotiate deals in order to compensate cable companies for broadcasting their signals, so every business advertising on local TV pays part of that cost in its advertising bills. If you buy anything from a TV advertiser, the depredations of the cable bandidos affect you.

Reno City Councilman David Aiazzi's statement to the Reno Gazette-Journal last week accurately reflected the attitude of city staff: "I'd like to sign something less than 15 years," he said, "but we got more money to sign 15 years."

The city thus demonstrates an institutional conflict of interest. On the one hand, the council and staff are supposed to represent the citizenry. But they cannot resist the siren song of a goodly chunk of indirect taxation. That's why so many governments across the land love the latest craze in "voluntary taxation" called casino gambling.

Reno's financial position is currently rosy if you believe the steady stream of glowing statements from city p.r. staff.

So why give Charter 15 years of open-ended rape and pillage when it's not necessary?

The city wants to continue extracting the federally allowed maximum franchise fee from Charter, five percent of gross TV revenues. That money, again, comes from you. But the city doesn't necessarily need it. The council can give its own citizens a break by not requiring so much. By keeping the franchise length to eight years as my citizens committee has recommended, they will be able to make corrections in the medium term if necessary.

The Reno Gazette-Journal's Internet opinion vote reported in its March 31 edition showed 288 votes against and only 29 in favor of giving Charter 15 years (91% vs. 9%). In last Saturday's RGJ, 51 percent of web voters said they consider Charter service "poor."

Reno's draft franchise deal is so flawed that it must be sent back to the drawing board — starting with the city's financial advisory panel. [1] Here are some of the major holes:

• A giveaway of $9 million a year worth of digital bandwidth. Under the new deal, the city will have far less capacity for public, governmental and educational access channels than it does now.
• Lack of performance standards and almost non-existent penalties. The contract includes performance disincentives — the sanctions don't even amount to wet noodles. Why perform when there's little cost (and more profit) in underperforming?
• Lack of proper financial guarantees due to Charter's intransigence on securing a cashable letter of credit when it's the only thing which will survive a bankruptcy filing. (Charter has long been in serious financial trouble.)
• Requiring the full federally allowed franchise fee (in effect, a hidden sales tax) from ratepayers when the city does not need the cash. Additional moneys to be paid to the city are not properly indexed to inflation.
• The current franchise proposal is so bad that the city's own consultant, to whom Reno paid the better part of $60,000, won't sign off on the deal.

In 1980, future Sen. Randolph Townsend, R-Reno, and I went before the Sparks City Council. We argued for shortening the length of Sierra Pacific's new franchise from 50 to 25 years and holding their feet to the fire on the issues of the day.

Councilman Bernie Gulla stopped the debate short: "All that matters is getting the franchise fee. The rest is the Public Service Commission's job."

This is the mindset of Reno City Hall today, but local ratepayers have no utility commission to fall back on, and no consumer advocate — only my outgunned and powerless citizens committee. (Which is more than Sparks has. Is anybody on Prater Way listening?)

Our only ally is the power of public opinion. Start contacting the decisionmakers and ask them to stop this needless rush to judgment.

The council meeting will be cablecast live on SNCAT/Charter Cable Channel 13 in Reno-Sparks with
reruns to follow.

Be well. Raise hell.
__________________________

[1] 3-30-2004 — On NBC KRNV TV-4's Nevada Newsmakers, in response to a question from host Sam Shad, Reno Mayor Bob Cashell essentially endorsed sending the franchise draft to the city's financial advisory board for review. When Mr. Shad asked the mayor if the franchise draft would be sent to the FAB as our panel recommended, Mr. Cashell responded "it probably will, yes."

UPDATE 4-7-2004 — Yes apparently meant no. Please read Cashell does Eddy Arnold.

SMOKING GUNS Mayor Bob Cashell does Eddy Arnold Daily Sparks Tribune 4-11-2004, Comstock Chronicle 4-15-2004 Reno City Council sentences ratepayers to 15 more years of Charter rape and pillage despite 3 town hall meetings, 3 Gazette-Journal Internet votes, KOLO TV-8's web sampling, letters to the editor, massive e-mails, paper letters and phone calls to councilmembers. Reno Gazette-Journal 4-8-2004 City should reject cable deal Reno City Council can cut cable TV rates Reno Gazette-Journal Op-Ed 4-7-2004 Citizens panel urges denial of 15-year cable franchise Reno Gazette-Journal 4-2-2004 Reno City Council April 7 meeting packet documents Adobe Acrobat Reader documents Reno Gazette-Journal ill-informed editorial "City getting best of Charter deal" Reno Gazette-Journal 4-2-2004 Ratepayers beware: The city and Charter like this deal Beware of pigs wearing lipstick Reno Gazette-Journal 3-30-2004 Getting beat up at Reno City Hall CONSUMER TRIANGLE: Ratepayers must fight the company, the council and the city staff Daily Sparks Tribune 3-28-2004 No cable TV complaints allowed until 2019 City gives the store away Daily Sparks Tribune 3-21-2004 Barbano's Conspicuously Unofficial Cable Consumer Page Everything about how we got to where we are today Cable Industry Economics Everything your friendly local cable provider doesn't want you to know The City of Reno's Official Cable Compliance Committee Page City of Reno Cable Links and Info Draft Cable Franchise Agreement as a .pdf download Draft Cable Franchise Agreement in .html City of Reno Staff Report on Draft Cable Franchise Bring your salt shaker Draft Changes to Master Cable Ordinance as a .pdf download Draft Changes to Master Cable Ordinance in .html Dr. Robert Sepe's advice: City takes some, leaves some (and leaves some of us aghast!) .pdf Adobe Acrobat Reader download .html web browser viewable version You may also get copies of the above documents by calling the community relations office at Reno City Hall at (775) 321-8318; fax 334-3124; or e-mail RenoDirect. At the mercy of cable monopolies Clearly, deregulation has failed San Diego Union-Tribune 3-15-2004 Consumer Reports The Consumers Union Video & Cable information index Charter Cable's Checking Account Isn't Choosy What's a mere $2,300 between friends? Daily Sparks Tribune 2-22-2004 National Association of Telecommunications Officers and Advisors (NATOA) Federal Communications Commission (FCC) Watch your language if you call, John Ashcroft might be listening

 

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