by David Mathison
Treat Broadband Access As A Public Utility
Comcast and the Marin Telecommunications Agency (MTA) are currently negotiating Marin’s cable franchise agreement. Marin owns this valuable franchise, yet Comcast reaps most of the rewards. Universal, affordable high-speed broadband access is an essential public service that is critical for economic development and public safety. We must treat broadband access as a public utility - like water, gas and electric. The MTA should consider all options regarding our highly valued franchise, including municipalization.
Free Marin
Even without municipalization, there are many reasons for Marin to break free from Comcast. The company has consistently angered the county and local subscribers:
- A March 2002 audit found that Comcast owes Marin $112,000 in franchise fees. No audits have been completed since that time
- Comcast outraged Marin residents by recently dropping the FM service
- An independent report commissioned by the Marin Telecommunications Agency (MTA) found that Comcast appeared to be in violation of the Franchise concerning the provision of community programming, including providing commercial programming “in violation of the ‘non-commercial purposes’ indicated in the franchise.”
Comcast Satisfaction Index “Lower than the IRS”
Comcast’s monopolistic stylings are not unique to Marin. Media-Alliance.org reports:
- Sacramento sued Comcast for failing to pay over $400,000 in franchise fees
- A 2004 study by the Consumer Federation of America (CFA) found Comcast's rates skyrocketed by 50% since 1996 - almost three times the pace of inflation
- For the second year in a row, the American Consumer Satisfaction Index (ACSI) rated Comcast with the lowest satisfaction index of any company or organization—even lower than the IRS
Comcast: It’s Good to be the King
Comcast’s 2004 revenues surpassed $20 billion. They hold 100 franchises in the greater Bay Area alone. CEO Brian Roberts earned almost $10 million in salary and bonuses in 2004, and a new headquarters in Philadelphia will cost $435 million. Marin’s cable franchise partially subsidizes the King’s luxuries - the largest asset on Comcast’s books is the franchise rights that are granted by each city, representing 43% of Comcast’s assets.
Rich Comcast, Poor Marin
While the champagne flows freely in Philly, towns throughout Marin are facing tax increases and cuts in services. The Marin Independent Journal reported on May 3, 2005 that San Rafael may increase taxes to avoid cuts to the police and fire departments, maintenance, and the closure of a community center. “After three years of budget cuts, we have nowhere else to go,” lamented City Manager Rod Gould.
Marin’s $461 Million Pot of Gold
While Marin struggles with budget deficits, the projected cash value of Marin’s 10-year franchise is over $461 million, according to the Communications Workers of America (CWA). This is based on a $62 subscription to basic cable x 62,000 Marin subscribers = $3,844,000 x 12 months = $46,128,000 x 10 years = $461,280,000.
This low-ball estimate does not include higher value packages or services such as digital, high-speed Internet or pay-per-view. Marin earns a franchise fee of 5% of this projected $461 million. However, we do not get a franchise fee from revenues from Comcast's high-speed Internet access subscribers - at a whopping $60 per month. Given our fiscal struggles across the county, how can we best leverage our lucrative cable franchise, guarantee universal, affordable Internet access, save money on telecommunications costs and generate new revenue streams?
Option 1: Reward Comcast
The MTA's franchise agreement with Comcast technically expired in 2000. If Marin decides to reward Comcast with our franchise, Media Action Marin argues that our local needs must be prioritized over Comcast’s commercial interests, in particular:
- Restore FM service: Comcast deleted the FM band from their cable package. Available for 19 years, residents demand that this vital service be restored
- Community TV Station: Comcast currently runs Channel 26. Marin should own and control their own independent, non-profit community access TV station
- Plan For Growth: Franchise fees should capture future revenue growth areas such as high-speed Internet access and voice, and allow for additional public channels or spectrum for the upcoming transition from analog to digital
Option 2: Reward Marin
The MTA has discussed municipalizing all or parts of the franchise, especially broadband Internet access. We are not alone - forty-two US cities already offer free wireless access, such as Fullerton and Long Beach. No city money is required - in Philadelphia, all costs to create the network are to be covered by revenues. The city is expected to save $2 million each year in telecommunications costs alone.
San Francisco Supervisor Tom Ammiano plans to offer broadband as a public utility, using streetlight poles that it already owns to send wireless signals throughout the city. The city will have the flexibility to provide free access for downtown business districts, libraries, schools and community centers. Fairfax’s Frank Egger points out that Marin municipalized PG&E’s streetlight system a few years ago, saving the county and towns lots of money - and providing us with a convenient place to hang our wi-fi or wi-MAX hats. This option rewards Marin and Main Street, not Philadelphia and Wall Street.
“The Comcast Monopoly Protection Act”
If Marin is interested in municipalization, we need to ACT NOW, before Comcast rewrites the law to protect their monopoly. The incumbents are crafting legislation and starting well-funded lobbying and PR campaigns to restrict our local government’s ability to offer universal access to residents. On April 28, 2005 Comcast switched its advertising agency of record from a Philadelphia firm to San Francisco’s Goodby, Silverstein and Partners. Expect a "municipalization misinformation" campaign by Comcast, in an attempt to keep their control over the many Bay Area franchises that are up for renewal this year.
No Legislation Without Representation
Fifteen states have already enacted industry-crafted laws blocking community broadband, and twelve more are considering it. Last month, Colorado passed Senate bill 152, even though no member ever saw a complete version. The bill prohibits all Colorado municipalities from providing high-speed Internet service to their citizens. The Rocky Mountain News reported on April 16, 2005 that local lawmakers did not write the bill, Qwest and Comcast did.
The monopolist’s legislative efforts began in 2004, after Philadelphia announced their wireless plans. Philly-based Comcast and Verizon, already enjoying rich federal and state tax incentives, crafted and lobbied for legislation that forces local governments to get prior approval from a Telco before delivering broadband to its citizens. “Forcing public broadband networks to ask permission from Verizon before offering service is akin to forcing public libraries to ask permission from Borders before checking out books,” said Timothy Karr of Media Citizen.
Who Elected Brian Roberts Mayor of Marin?
Comcast and Verizon should not be writing the laws that govern us. Comcast has done a terrible job of providing universal service - they delivered broadband to profitable, dense urban and business zones, while ignoring unprofitable, low-income urban and rural areas. Now they are writing laws designed to restrict our community’s ability to deliver access to these remote residents, and those who can’t afford the $60 monthly monopoly fee.
In today’s information age, everyone must be well informed and connected, not just those that can afford Comcast’s fees. This includes all of us - citizens, businesses, elected officials, educators, students, public safety and emergency services personnel.
Reward Marin, Not Comcast
Marin must control what we rightfully own. Communication is a fundamental human right, like fresh air and clean water. Universal access is a promise that is best kept by our local, democratically elected and accountable representatives, not unelected, unaccountable, remote corporations. MTA representatives respond to the will of the people, or their re-election is jeopardized. For example, after 200 people jammed the San Rafael courthouse to protest the volatile FM issue in March 2005, the MTA unanimously passed a resolution calling for state legislation to mandate carriage of FM through cable. The MTA is now working with state Sen. Carole Migden (D-San Francisco) to draft this legislation. The MTA listens to us - Comcast doesn't!
ACT NOW - Get Free Time and Money!
Residents and local businesses can show their support for Marin, AND get a bonus of $744 per year and 3 free months, every year. On average, Marin cable subscribers pay Comcast $62 per month, or $744 per year, and watch TV for 6 hours per day, for 91 days or 3 months per year. Simply call (800) 945-2288 and cancel your cable subscription. Use your free time and money to encourage the MTA to initiate a feasibility study on municipalization. Let us know how you feel about this issue by posting a COMMENT (below).
Let’s outfox this blatant attempt at remote control via Comcast.
This gift of time and money courtesy of David Mathison, author, BE THE MEDIA, the first solutions-oriented book to address the problem of media monopoly. Mathison was previously Chairman and CEO of the Kinecta Corporation, acquired in 2002 by the Stellent Corporation, a provider of enterprise content management solutions with more than 3,500 customers, including much of the Global 2000 (NASDAQ: STEL). Prior to that, Mathison was Vice President with Reuters, Ltd., the world's largest news agency (NASDAQ: RTRSY; FTSE: RTR.I).
