Cable T.V. in Cambridge: Private vs. Public Ownership

Prospects for a quiet summer in Cambridge are not good. War is brewing. Lines are drawn. Initial thrusts have been met, parried, and returned. The early private skirmishes in the argument over private vs. municipal ownership of a cable TV franchise in Cambridge threaten to erupt into a full-scale battle by November, at which time the city's voters will be asked to register their opinion on the matter in a public referendum.

The outcome will be closely observed by industry and municipal officials with equal intensity, for at hand is not simply a local disagreement but an issue which poses serious philosophical, social and economic questions for both sides. Over the next few years almost 80 percent of the currently licensed cable franchises across the country will face a license renewal process. The cable television industry, represented in these parts by the New England Cable Television Association (NECTA), is understandably very much against municipalities opting for public rather than private ownership. On the national level, Senator Barry Gold-water (R-Arizona) is also against it. He is sponsoring a Senate Bill (S.66) which not only severely restricts ownership options for cities and towns, but also mandates nearly automatic renewal of existing cable franchise licenses. This bill also limits, and in many cases eliminates, the public's use of the media via public access channels.

The industry itself has further arguments against public ownership. For one, cable construction and operation is extremely capital intensive and poses a substantial initial investment on the part of the city as well as an element of risk in such a venture. The industry points out that cities have no business becoming involved in a commercial activity that private operators are willing and able to perform. Along similar lines industry figures question the ability of cities and towns to operate such a complex system and to cope with planning, construction, operation, promotion, billing and service aspects. Most importantly, though, the industry warns of the dangers of government control of the media. This, they say, invites possible First Amendment violations and anti-trust litigation for municipalities.

Why then, in the face of all this, are municipalities considering public ownership? Much of it has to do with concern for what a cable communications network can do for a city or town and ways in which a publicly owned system can service citizens perhaps much better than the private sector. City officals are looking at subscriber rates. Since Massachusetts is deregulated, cable companies can charge whatever the market will bear. Massachusetts law presents a number of additional reasons for consideration of public ownership (Cambridge, Wellesley, Shrewsbury, Marblehead, and Brookline are currently considering public over private ownership.)

Cable operators pay a franchise fee of 3 to 5 percent of gross revenue back to cities and towns. This rate is set by the Federal Communications Commission (FCC). Massachusetts law stipulates that cities can only collect 50 cents per subscriber. This means that a city like Cambridge with a 50 percent penetration rate (that is 20,000 out of 40,000 households) could collect only $10,000 as opposed to a possible $300,000 based on six million gross revenue.

Cambridge officials feel that a public system could be more responsive to local residents. Rates could be kept lower and public access could be guaranteed. This means that facilities would be provided for use by individuals and organizations, free of charge, to utilize time on public access channels, for any purpose, this is more of a re-affirmation of the freedom of speech than a violation. A cable network could work as a social service providing residents with informational, educational and social services. Health and human services could be supplemented and expanded. A publicly owned system can mandate such services, making the system a community resource to benefit all citizens.

By buffering a publicly owned system from the political process, the city can guarantee operational efficiency and financial credibility. An independent public access corporation will also insure full protection of the First Amendment rights.

Cities and towns have become fed up with the double dealing of many private operators. The people of Brookline awarded a contract to the Time-Mirror Company which, even as it was signing the contract, was negotiating to dump the franchise into the lap of Cablevision, the company owning the Boston franchise. This is one reason why Brookline is now looking at public ownership.

The battle in Cambridge will be decided at the polls in November.

Dr. Joseph G. Sakey is the Commissioner of Cable Television for the City of Cambridge.