What Will City Cable Agreement Mean?

City Council’s General and Government Services Committee is planning to take up the issue of granting a franchise agreement to Verizon in order for the company to begin deployment of its fiber-optic lines throughout the City over the next six years. What effects the service will have on cable TV prices is debatable: one FCC study found that cities with competition saw lower overall rates (about 8 percent) than those without competition, while other observers don’t see the price pressure but rather competition on available features and bundles of services.

The City, in return for granting the franchise and permitting the company to access its rights-of-way, will get a franchise fee (5 percent of the gross revenue), dedicated fiber-optic lines between some city public safety facilities, $700,000 over five years to improve the City’s in-house video hardware, and 45 cents from each monthly bill to go toward public, educational and governmental broadcasting according to published reports.

These corollary benefits raise questions as to the implications for the City’s in-house cable operation, which consists of four employees at $130k in salary and fringe benefits but not the cost of equipment, supplies, or services per the Act 47 Plan. Five years ago the Act 47 team instructed the City to "eliminate most City cable TV functions", a directive that obviously did not get carried out. The new plan tries to nudge the City to "Explore alternative staffing structures" such as using interns and wants the City to try and generate more revenue from the events it broadcasts.

Like manna from heaven comes the proposed franchise agreement with more public channels and money for equipment upgrades. Seems like it could pull the rug out from under the Act 47 directive to make the cable operation, albeit small, safe and secure.