News

Battle Lines Form Over PEG Support

9/28/2003 8:00 PM Eastern

To the Alliance for Community Media, when the number of interested viewers in a city council meeting telecast on the government access channel jumps from five to 15, you've tripled democracy.

For cable operators, though, that increase doesn't mean much of anything — especially to the bottom line.

That's the crux of the growing conflict between public interest and profit, as shareholders press cable operators to increase their revenue generating units and revenue-per-subscriber numbers.

In some systems, public, educational and government channel commitments stand in the way of new technology and new revenue streams — including HDTV channels and video-on-demand.

Real estate

"It's valuable space," said Terry Bienstock, executive vice president and general counsel for Comcast Corp., the nation's biggest cable operator. "There are some markets where there is no high-definition television.

"We need bandwidth. If we could reclaim channels we could do HD, or VOD, which take a lot of bandwidth. Would communities rather have VOD or school menus running continuously?"

PEG was developed at cable's birth as a soapbox for disparate community views, Bienstock noted during a brief interview at the recent meeting of the National Association of Telecommunications Officers and Advisors in Denver.

He told that group Comcast is very committed to PEG. It spends $100 million each year to support 2,400 channels across the country.

Web option

But PEG channels have lost ground to the Internet as a global soapbox, he said, suggesting the 6 megahertz devoted to each channel might be better used to bring new products to communities, and save cities the money they spend to manage and produce PEG content.

Asked after the panel session to clarify his position, Bienstock said it might be more cost-effective for Comcast to help communities stream some of that video over the Internet.

Comcast has some communities in which franchise obligations have required the operator to fund a full studio — fully staffed — that operates for two hours a day, he said.

Digital equipment has dropped in price to the point that a $7,500 camera can take the place of a suite full of production equipment. It might be better to show something like a city council meeting once, then archive it on the Internet for 30 days, he said.

In some communities, Comcast has only 50% penetration, while Internet penetration is much higher, he said. Placing the content on the Internet would give the content a bigger potential audience than cable coverage, he added.

What PEG-channel users hear from that HDTV-VOD vision is a rationale for shunting them aside.

Local skirmishes

They assert Comcast has been the most resistant to negotiating PEG commitments comparable to past support, or to allowing ongoing PEG ventures to replace their aging equipment and move forward.

Comcast has even resisted fulfilling prior commitments, and in one case landed the MSO in a California courtroom.

Comcast is suing San Jose in an effort to block the city's attempts to move to formal negotiations on PEG and institutional-network requirements, issues Comcast inherited in its acquisition of AT&T Broadband.

San Jose public outreach manager Tom Manheim said the city and AT&T Broadband were negotiating informally on proposal for PEG support.

The city thought it had a handshake deal for a system upgrade commitment including PEG support and an institutional network. (Despite residing in the technologically savvy Silicon Valley, San Jose still has an antiquated dual-cable A/B-switched system.)

San Jose has PEG channels: a government channel operated by the city with city funds, and two educational channels programmed by the local community college.

On the public channel, though, local producers must compete for time with Comcast's local-origination productions, Manheim said. There's a nine-month waiting list to get into the studio. Once there, community producers must pay Comcast technicians for their time, city officials say.

San Jose would prefer a PEG-support model like other communities: the cable operator provides support payments to the city, which creates an independent nonprofit corporation to manage a studio and schedule production time.

When Comcast took over the local system, it offered to pay about a third of the amount of PEG support the city had been offered by AT&T Broadband, Manheim said. When San Jose opted to move to formal negotiations on the issue, Comcast took the city to court to block the action.

Mass. actions

Comcast's "hardball" tactics aren't limited to San Jose, said Bunnie Riedel, executive director of the Alliance for Community Media.

She said there are a number of communities where Comcast has diminished support, such as Somerville, Mass., where city fathers wanted $800,000 but got $450,000, even after taking Comcast to court; and Deerfield, Mass. where officials threatened transfer denial over PEG support.

Most cities aren't anxious to sue over PEG cutbacks, she said. "It takes $250,000 just to get a lawsuit started. They've asked us for help, but my entire annual budget is $500,000. We can't afford to bankroll lawsuits," Riedel said.

Some cities do go to court — notably Brookline, Mass., a Boston suburb of 57,000 residents, which sued after Comcast allegedly pushed Brookline Access Television out of its studio.

According to the lawsuit, Brookline's franchise calls for community producers and Comcast to share the local studio 50-50 at all times of the day.

That last phrase is important, because prior to March, most public-access producers used evening hours to tape their shows.

In March, Comcast began moving in with plans to renovate the studio as a regional production facility for its regional news and sports network, CN8: The Comcast Network.

The suit states neither the city nor the access corporation received mandated notice in advance of this project.

Now, Comcast uses the studio during primetime for production of New England editions of CN8 Nitebeat
and CN8 Sports Pulse. Community producers have the studio for 90 minutes at a time during alternate evenings, during which they must assemble and light their sets, shoot segments and strike the sets.

Unregulation

George Driscoll, the assistant town counsel, said Brookline unsuccessfully sought a preliminary injunction to halt Comcast's studio activity. The town and Comcast are still negotiating; a court date for the suit is scheduled for October.

"My fear is they will move us and stream everything over cable modems, and then there will be no franchise fees — the 1s and 0s of telephony, cable and Internet are indistinguishable from one another, and modem service is unregulated," Riedel said.

The Internet is a medium people use to look for specific things, she added.

New viewers will never find local programming there, she said.

Sees irony

"It seems we're seeing a comprehensive strategy by Comcast to convince, if not intimidate, cities into weakened support for PEG," said attorney Nick Miller, an advisor to municipalities. "The irony is, this is the differentiator between them and direct-broadcast satellite. For the pennies they pay for PEG, they get a huge competitive advantage."

Comcast's efforts illustrate the need for cities to pay close attention to PEG language in current franchises and renewals, Miller said. "If it is badly written, it can be taken advantage of."

The perceived push against PEG demonstrates the danger of increased media ownership concentration, activists said. And they appear to have the ear of Federal Communications Commission member Michael Copps. At the Denver NATOA meeting, Copps said: "Localism? All I see is homogeneity."

PEG is even more essential now, due to the convergence of media giants, and it's "absolutely imperative" that local programming continue, to provide a place for alternative voices and so communities can get real, local views, Copps said.

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