A 10-year contract again for Charter? Stay tuned ...

Byline: Nick Kotsopoulos

COLUMN: POLITICS AND THE CITY

Dumping on cable television companies is like shooting fish in a barrel.

People don't like their high cable rates, they don't particularly care for the customer service they receive from many of the companies, and they are not especially fond of having to pay for so many channels they don't want while not being able to get the ones they do want.

Some blame the fact that cable companies hold a virtual monopoly in the communities where they are franchised. In many instances, such as in Worcester, there is only one cable television provider, and if you don't like its rates, service or channel offerings, well, that's tough.

As a result, the Worcester City Council is trying once again to encourage competition in the local cable television market - something that has proved easier said than done.

The city has traditionally awarded 10-year contracts with companies that have held the local cable franchise. But as the city continues its protracted negotiations with the current franchise holder, Charter Communications, on a new cable deal, several councilors have indicated they would like to see the new contract be for no longer than five years.

The reason? They want to see one or more additional cable television providers in Worcester as soon as possible.

"We need to look at as many (cable) options as we can," said District 2 Councilor Philip P. Palmieri. "A 10-year contract seems far too long; it's just silly and not in our best interests. We shouldn't have a 10-year contract because it leaves us without any leverage. I hope the (city) administration stands fast and strong for a contract of not more than five years."

Councilor-at-Large Joseph M. Petty, chairman of the council subcommittee that oversees local cable television service, said competition is the only thing that will hold down cable rates and lead to better service for all.

Like Mr. Palmieri, he also feels the city's next cable contract should be no more than five years. Because of the rapid advances being made in telecommunications technology, he said, he does not believe the city should box itself into something that would prevent it from taking advantage of any new technologies over the next 10 years.

"Competition is the key," Mr. Petty said. "The way technology changes overnight, who knows where we'll be in five years?"

Currently, communities are not prohibited from having more than one cable operator. From an economic point of view, however, it is highly unrealistic.

In Worcester, for instance, Charter has made a substantial investment in equipment and infrastructure citywide and the only way it can recoup such an investment is by having a substantial share of the potential local cable market.

If another company were to come in and offer cable service, that company would also have to make the same kind of substantial investment in equipment and infrastructure, but it likely would not be able to recoup that investment because it would have to share the local cable market with Charter.

While he also believes a 10-year contract may be too long, Councilor-at-Large Frederick C. Rushton said shortening the next cable contract to five years could lead to even higher rates for Charter customers.

"Because technology is changing at nanoseconds, we may not be using wires at all for cable television in the not too distant future, and then we will have competition galore," Mr. Rushton said. "But I am concerned about what will happen if the term of the next contract is shortened.

"With a 10-year contract, a company can spread its costs out over a long period of time," he added. "With a shortened contract, the costs would remain the same, but there would be less time to spread those costs out over. That means rates would likely have to go up."

Mauro DePasquale, executive director of WCCA TV, Worcester's public access cable channel, has a unique perspective on the issue as the head of a group that is not affiliated with Charter and provides programming that goes out on the local cable system.

Unlike typical city contracts, he said, a cable franchise agreement is a strategic telecommunications opportunity. The city's long-term telecommunications plan requires a long-term infrastructure, thus a long-term agreement, he said.

He added that since telecommunications lobbyists in Washington have managed to relax cable regulations that were set in the federal Cable Television Act of 1984, the chances for competition have dwindled considerably. While there were more than 60 cable companies nationwide 20 years ago, he said, today that number is "down to a small handful."

"Anyone can understand the City Council's frustration with hearing customer complaints about their cable operator," Mr. DePasquale said. "The thing is, no matter where you go in this country, such complaints are reasonable and not unique. No matter what or how many cable providers are in town."

"No matter where you go in this nation you will hear cable customers complain about poor customer service, high and escalating rates and fees, the lack of channel choices, and so forth," he added. "It is easy to dream that some competition will bring relief. People are screaming for competition. Competition would be great, but thanks to cable and telecom deregulation, competition is dwindling. Worcester's cry for competition may reap only an exchange of one monopoly for another."

While city councilors respect Mr. DePasquale's viewpoint, they still feel that Worcester's cable television subscribers would be better off having more than one company providing the service.

District 3 Councilor Paul P. Clancy Jr. said it has always perplexed him why cable rates have always been higher in Worcester compared with those in many of the surrounding towns, especially since the city has considerably more subscribers.