Little Rock Leads Charge Vs. Comcast

Author:
Publish date:

The city of Little Rock, Ark., is banding together with
four nearby communities to investigate forming its own municipal cable company, in
response to what it believes are high rates and a lack of appropriate service from Comcast
Corp.

In October, the city hired United Telesystems Inc., a
Savannah, Ga.-based consultant, to conduct a study concerning the creation of a municipal
cable system. The consultant is expected to present its findings to the Little Rock City
Council by the end of next month.

Little Rock and the other four cities -- North Little Rock,
Jacksonville, Maumelle and Sherwood -- represent more than 88,000 cable households and
140,000 homes passed.

All except Maumelle, which is a Falcon Cable TV Corp.
franchise, receive cable-TV service from Comcast.

J. Allen Davis, president of United Telesystems, said that
although all of the data were not in yet, many signs pointed to Little Rock being a prime
candidate for municipalization, adding that the company has given the opposite advice to
several clients.

Davis said a number of factors -- including the
demographics of the communities, the size of the market and the overall economy -- make it
a good candidate for a municipal cable system. He added that there is also a high level of
cooperation between the five cities, enabling them to share resources, personnel and
infrastructure.

Each of the five communities appears to have a high
concentration of residents in the 18-to-44 age bracket (about 45 percent) and a high
median household income (averaging about $31,623), according to data from the 1990 U.S.
Census.

According to the Census, median household income in the
state of Arkansas during that period was $21,147 annually, and nationwide median household
income was $30,056.

Wayne Wagner, economic-development manager for the city of
Little Rock, said he began to look into municipalization after noticing that a much
smaller city -- Conway, Ark. -- had more channels in its cable offering and high speed
Internet service. Conway has had a municipal cable system since 1995.

Wagner said rate hikes from Comcast without an accompanying
increase in service also prompted the city to look into building its own system. He added
that Comcast has raised its rates in Little Rock four times in the past two years.

The latest rate increase, which went into effect Nov. 1,
was 4 percent. However, Comcast's last two rate increases were 10 percent apiece.

"There was a public hue and cry over a lack of
accountability," Wagner said. "It seemed natural to develop a business case --
to test the waters."

Wagner said that if the consultant determines that a
municipal cable company is feasible, the next step would be to try to find the financing
to build the network.

Mike Wilson, general manager of Comcast in Little Rock, did
not return calls seeking comment.

Related