RTM Analysis of King County's Comcast Franchise Renewal Plan

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KING COUNTY FRANCHISE RENEWAL PROPOSAL ANALYSIS
PROPOSED ORDINANCE 2002-0556

Michael J. Weisman, JD
Reclaim the Media

This is a point-by-point analysis of King County proposed ordinance 2002-0556

I. Revised Staff Report dated December 15, 2003

Revenue Options to the County

Page 1: the staff report implies that only two types of payments are permitted under federal law. In fact, typical cable franchises include several types of payments not enumerated here. Examples include a gross revenue fee levy (on top of the mandatory 5% federal franchise fee/tax), PEG and I-net operations funding, Community Technology Center funding, Community Assessment funding. For example in the recent franchises negotiated by Miller & Van Eaton, PLLC a 2% fee on gross revenues for PEG operations support on top of the federally mandated 5% franchise is becoming standard. [Miller and Van Eaton: "Cable Television Renewal Toolkit," p. 6] The City of Portland collects such a fee. [Alan Bushong, performance review of SCAN non-profit, August 31, 2003, p.8.]

I-Net status and future funding
The staff report does inform the council that the institutional network was never completely implemented. The county failed to ask for sufficient I-net funding in the current franchise. Consequently, funding and personnel complexities resulted in a reduction in I-net deployment. Today's I-net is just a remnant of the original network negotiated in the franchise. While the I-net is an excellent proof of concept, the report is misleading to the Council not to explain that the I-net project requires far more funding than the current franchise provides, and the County is giving up the chance to fix it for at least five more years. The proposal before the Council shifts these costs from the cable company to the general taxpayers of the county.

Competitive Environment for Consumers
At page 2, third paragraph, the staff report repeats cable company propaganda, indicating that there is currently a viable competitive marketplace for broadband. Studies of the national markets show that more than 64% of customers obtain broadband service from the monopoly cable provider. DSL occupies the remaining 32%, with satellite and wireless service in the neighborhood of 4%. According the Pew Internet study statistics collected April 2003; broadband penetration in the Pacific NW region is about 17%. About 10% use cable modem for broadband, 5.2% use DSL, 2.3% use other high-speed solutions.

Negotiating v. the legal advantages of the Cable Act
The staff report goes on to imply that King County obtained a preferred position by negotiating the original franchise with the cable company. Nothing could be further from the truth. In fact, the county engaged in a hard-fought adversarial process in order to obtain the benefits in the current franchise. The staff report also fails to inform the Council that many of the most important aspects of the original 1995 franchise have been negotiated away in recent years by the Executive, or rendered obsolete by the passage of time. Today, the County

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