Access Outfit Cries Foul in Chicago

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Public-access TV producers in Chicago have cranked up the publicity machine, trying to compel RCN Corp. to make good on a missed $654,000 support payment.

The city, prompted by troubled producers and Chicago Access Network Television executive director Barbara Popovic, passed a resolution encouraging the overbuilder to pay the corporation, but officials note there is little else to be done officially.

The payment, due this past January, is part of a contract between CAN-TV and the operator, separate from the franchise terms.

RCN has franchises for four areas of Chicago, but only one — Area 1 along the "Gold Coast" — was built out by 21st Century Telecom before that overbuilder sold out to RCN.

When the financial markets slowed in 2001, RCN stopped soliciting new franchises and slowed the buildouts of the other three Chicago franchises in process.

"RCN appears to be in legitimate difficulty," Chicago cable administrator Joyce Gallagher said. "We haven't gone over all the financials, but it appears to be legitimate."

RCN made a full payment for access support in Area 1, but the company proposed a revised payment for the rest of its areas.

CAN-TV flatly rejected that proposal. "We don't consider it an offer," Popovic said.

RCN would not disclose the details of the offer, but Popovic said it was $35,000 to satisfy the access payments for the unbuilt franchises.

RCN senior vice president of regulatory and government affairs Scott Burnside said the company would like to negotiate a reasonable settlement, but the payment should be related to the number of customers served.

For now, RCN serves only Area 1, and it could be a long time, "if ever," before the company builds out its other franchises, he said.

Under those conditions, no buildout would mean no money for public access, and Popovic concedes the access group has already spent the amount it expected to get from RCN.

But Popovic bristles when critics mention the $3.6 million in proceeds from franchised cable operator AT&T Broadband, plus early payments from RCN in CAN-TV's account

"That money serves the public," she said. She added that CAN-TV was drawing down that reserve to fund daily operations.

The group also expects to spend $500,000 this year to upgrade outmoded tape machines to digital. CAN-TV's ongoing operations are subject to flat funding, she said. The network gets the same amount yearly from local operators, whether or not equipment prices increase. The organization can't afford to leave any money on the table.

For its part, the city is still analyzing RCN's financial data to determine whether to grant the company relief from its current franchise build-out terms. But the publicity blitz has presented regulators with a catch-22 — Chicago supports the competition and job creation that RCN represents.

Before the economic downturn, the company had 900 employees in Chicago, 85 percent of whom were local residents. They have since laid off 200 workers, according to the city.

The company also represents a choice for consumers who do not want to patronize AT&T Broadband.

To the eyes of some in the city, taking action to help CAN-TV collect the access money could delay RCN's local recovery.

Popovic says RCN's local message differs from what CEO David McCourt told investors in the fourth quarter last year — that 2001 was a great year for RCN.

"If they're saying now that CAN-TV has to prop them up, then woe is RCN," she said.

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