Cable Franchise

This article appeared in the Townsman, December 24 edition

Woodstock, December 16, 2008

With little else settled at its December 16 meeting, the Woodstock town board staked an aggressive agenda for the coming winter months, scheduling a public hearing on January 16 on the renewal of the cable franchise agreement with Time-Warner cable company, and re-opening the public hearing February 10 on the proposed amendment to the zoning law regulating development near wetlands, water courses and water bodies. There will also be a special meeting on either January 5 or 12 for a discussion concerning the update to the town's comprehensive plan. The year-end meeting is scheduled for December 30 at 5:00 pm at the Town Offices, and annual organizational meeting is scheduled for January 6.

Woodstock has been without an updated cable franchise agreement since 1996, when the ten-year agreement that had been signed in 1986 expired. Since then the cable franchise has been automatically renewed annually with the 1986 provisions stipulated to. The cable television industry has expanded services considerably in this time to include internet and telephone services, pay-for-view sales and music services, to list just some of the many additions.

The 23 page proposed renewal is 90% boilerplate, describing the company's obligation with respect to transparent billing, accessibility for hearing complaints, time periods to address complaints and service installations, refunds for lapsed service, liability, construction standards and myriad other matters, most of which are mandated by the Federal Communications Act of 1996 and/or New York State regulations. While the franchise is not exclusive, it does contain a provision requiring the Town to not grant a franchise to other companies with more lenient terms.

Most pertinent to Woodstock are provisions relating to extension of service area, franchise fee (which hinges on the definition for "gross revenue"), and the public and education access channels.

In 1998 the town board hired Washington DC consulting company Rice-Williams, which substantially created the document under consideration. Although presented to the public two or three times earlier this decade and tweaked here and there it was never adopted.

Despite the limbo, Time-Warner installed a complete fiber-optic system replacing the old co-axial cable, making Woodstock in 2001 one of the first communities in Ulster County to have access to high speed internet by cable. Also, areas of the town, including Riverby, Vincenses Lane, the area around Yankeetown Pond and other pockets saw service extended to them.

Cable companies, by federal law, must extend service to areas that contain a minimum of 35 potential hook-ups per mile. The agreement under consideration reduces that minimum to 20, creating the likelihood of service extended to less densely developed areas not currently served, such as MacDaniel Road, Hutchin Hill and the farthest extensions of Mink Hollow and Silver Hollow, to name a few.

Municipalities may impose a franchise fee of up to 5% of the company's gross revenue, which Woodstock has since at least 1986. The cable subscriber pays the fee in his or her monthly bill to the company, which then remits the sum to the Town on a quarterly basis. Last year Woodstock's general fund received $110,000 from the cable subscribers.

Gross revenues, in the proposed document, include all revenue derived directly or indirectly by Time-Warner from the operation of its system within the township, and include, but are not be limited to, amounts for the Basic Service tier, cable programming Service Tiers, pay per channels and pay per view services, music services, video on demand, converter rental, subscriber installations and transactions, leased access, advertising, and equipment rentals. Gross Revenues shall not include excise taxes, late fees, bad debt or any other taxes that are imposed on Time-Warner or any subscriber by any governmental unit and collected by Time-Warner for such governmental unit. Gross subscriber revenues shall include revenue from cable modem service to the extent these services are deemed a cable service by applicable federal or state laws or by a court of competent jurisdiction binding upon the Town and Time-Warner Cable. As of now federal and state laws do not allow cable modem service fees to be considered as a part of gross revenue, which means subscribers with internet or phone service do not pay the 5% franchise fee.

If history is a guide, most of the town board's attention will be focused on the provisions relating to education and public access channels. Federal law mandates Time-Warner to provide a channel for each, and although Woodstock's channel 23 is an entity well known to the community, the education channel 20 has not been, at least in Woodstock.

This is not longer the case, since the towns of Hurley, Olive and Shandaken now share an active education channel with content provided by the Onteora School District, which encompasses the aforementioned towns, as it does a large part of Woodstock. Ironically, it was a Woodstocker, former councilman Gordon Wemp who originally conceived the idea for a single education channel to serve the Onteora school district, and who then got the support of the Onteora school board. Shortly afterward the Large Parcel brouhaha burst over the district, and the idea lay dormant until recently. The reason the three towns, but not Woodstock, have the service is because they formally renewed their respective franchise agreements with Time-Warner. Channel 20 broadcasts on a daily basis updates with regard to closings, meeting schedules, student productions and other district matters of interest. There are now Woodstock parents and students feeling left out, and this is perhaps the impetus for the town board scheduling its public hearing.

What may frustrate those anxious for the education channel is the argument that if the town board were to be "tough" with Time-Warner then the local public access channel could receive significant funding directly from the company to upgrade its facility and finance personnel for its operations. These contentions have been raised in the past, and most likely will be raised again despite the fact that in all these years the proponents of such notion have not shown one instance of another community the size of Woodstock receiving such largesse from its cable service provider. By some of the comments made at the meeting it appears some members of the town board, nevertheless, seem inclined to the "tough" tactic in negotiation and it is likely a consultant will be engaged.

The January 16 public hearing will be held at 8:00 pm at the Community Center.