CITIES ANXIOUS OVER COMCAST'S SAN JOSE SUIT

Local franchise authorities nationwide will be focusing their attention this week on a legal battle between Comcast Corp. and the city of San Jose, Calif., that could alter the way municipalities address cable franchises. On Wednesday, Comcast will attempt in the U.S. District Court of the Northern District of California to stop San Jose from using its current franchise-renewal negotiating tactics. Fed up with San Jose’s demands, Comcast flexed its muscles and sued in May. The MSO seeks a preliminary injunction this week. If the court sides with Comcast, it could force San Jose to issue a new request for proposal for its franchise renewal as well as create new model ordinances, altogether revising the city’s rules of procedure in negotiating with a cable company. “That’s going to be a critical case for us,” said Bunnie Riedel, executive director for the Alliance for Community Media, at the National Association of Telecommunications Officers and Advisors conference in Denver last week. “The problem is we have this 5,000-pound gorilla that is going into small towns across the country, and instead of them behaving like good corporate citizens…they default to litigation,” Riedel said. In the suit, Comcast objected to many aspects of San Jose’s negotiations, including San Jose’s request for renewal proposal; its appointment of a hearing officer to address the renewal; and its demands for an institutional network as well as public, educational and governmental — better known as PEG — access channels. PEG channels have long been a part of cable franchise contracts, a sort of public tax on the operator for renting the public rights of ways throughout the country. Cable operators are now less willing to go along with PEG requirements. “In the past, some companies made promises they knew they couldn’t keep in order to get a franchise, because they knew they were going to sell the system,” said Terry Bienstock, Comcast’s EVP and general counsel, at the conference. “The biggest mistake the cable industry made in the past is making promises we knew we couldn’t or wouldn’t keep. It’s a different world now. We can’t work today with a model that was created 30 years ago.” Comcast has either cut off or threatened to stop funding at least six cable PEG channels across the country. Comcast took over the public access center in Brookline, Mass., without giving notice and said it was going to be used for its own local programming, Riedel said. And in Wheaton, Ill., Comcast stopped funding the local access channel this year, said Gary White, media manager for Wheaton. Changes at the Federal Communications Commission could also affect the balance of power between operators and local franchise authorities. This summer, the FCC revamped its Local and State Government Advisory Committee, which serves as a link between the commission and local governments with respect to cable and other FCC issues. The Intergovernment Advisory Committee, as it’s now called, has dropped two local representatives and seeks to replace them with state and tribal representatives. “I don’t know how much local government influence is going to be lost,” said Ken Fellman, the mayor of Arvada, Col., and former chair of the recently folded committee. “I don’t necessarily see it as a positive.”
With K.C. Neel.