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from: Manitowoc Herald Times Reporter

Posted April 12, 2007

Conspiracy' threatens local sports cable casts City officials fear loss of revenue, programming

By Charlie Mathews
Herald Times Reporter

MANITOWOC — Lincoln High School football and basketball games, city council and school board meetings might disappear from Comcast cable if a proposal in the state Legislature passes, according to Manitowoc mayor Kevin Crawford.

In fact, he's the Comcast Channel 20 host of "Mayor Kevin's Community Update" and a critic of the legislation. In a recent "3 Minutes with the Mayor," Crawford said there's a "video conspiracy" jeopardizing the cable casts of local prep sports.

Advocates of Assembly Bill 207 believe it will create more video service provider optimism with competition lowering costs for consumers.

In contrast to the mayor's concern that high school games would no longer be on the tube, a supporter of the bill said Tuesday it's far too premature to forecast the death of local cable programming.

"Most bills when they get introduced go through changes to make them better and palatable to the legislative body," said Thad Nation, executive director of TV4US Wisconsin.

However, the bill's current wording does appear to relax requirements for the provision of "PEG" channels — Public Educational and Government programming — like meetings of the Two Rivers City Council on Charter, the cable franchise holder in that city.

The Legislative Reference Bureau's analysis of AB207-SB107 says it repeals cable television subscriber rights regarding service interruptions and disconnections, repairs, program service deletions and rate increases.

"Issues about PEG and consumer protection can be worked out," Nation said. "What we want is competition." His group's financial backers include AT&T, which has indicated its desire to jump into the video provider game.

With more than a million subscribers statewide paying monthly cable bills often exceeding $50 a month, there is a lot of money to potentially fight over.

Jonathon Burns, local operations manager for Comcast, declined to speculate on the bill's potential implications for Manitowoc cable TV subscribers.

Loss of fees a concern

The legislation, as worded currently, also voids contracts with current cable operators. A position paper by the Wisconsin Alliance of Cities declared, "These agreements were negotiated in good faith by local governments.

"It would be unfair, unprecedented and possibly unconstitutional for the state to allow the abrogation of contractual obligations."

Greg Buckley, city manager of Two Rivers, fears a loss of revenue if the bill passes unaltered.

Local negotiations over cable franchise agreements would be ended. Two Rivers receives 5 percent of Charter's gross revenue including subscriber fees, about $110,000 last year. Manitowoc receives the same cut, representing an infusion of $260,000 into the general fund.

The bill would have video providers negotiate agreements exclusively with the state's Department of Financial Institutions (DFI), bypassing local municipalities.

"We're not anti-competitive, but if that $108,000 went away, that equates to 2.5 percent of the city's portion of the tax rate," Buckley said.

James Wyss, Manitowoc's city attorney, expressed concern that franchise fees given to the state might not return to the community where they were generated.

He fears a double whammy: the franchise fee revenue disappears, and no company decides to spend millions of dollars investing in the equipment necessary to compete against Comcast, offering the reduced costs and more options bill supporters say would happen.

Advocates of the legislation are focusing on the savings to consumers they contend competition would bring.

The Wisconsin Policy Research Institute released a report, on their behalf, stating consumers on cable's basic and expanded basic tiers could save up to $149 yearly on their bills.

Support, in theory

All four area legislators —state Sens. Alan Lasee and Joe Leibham, and state Reps. Frank Lasee and Bob Ziegelbauer — indicated their general support for legislation stimulating competition.

"Let's allow the consumers to make the choices they believe is in their bests interests," Leibham, R-Sheboygan, said.

He did, however, urge changing the bill to ensure consumer protections and assure continued local government programming, in general.

"We shouldn't dictate (at the state level) what local programs should be offered ... that can be negotiated," Leibham said.

"Competition in the private sector is a good thing" for consumers, said Alan Lasee, R-De Pere, said. "This is an interesting case with AT&T going up against cable giants like Time Warner ... this is a battle of the Titans."

"Generally, competition lowers costs and gives more choices," said Frank Lasee, R-Bellevue.

The ability to negotiate with just the DFI and not scores of local municipalities should make it easier for entry into the marketplace, Frank Lasee said. He also wants the bill changed to make sure franchise fees flow back to the local level.

"If all you care about is the price, that might lead you to think competition is better," said Rep. Bob Ziegelbauer, D-Manitowoc. "But if you care about local programming and the fees the city is collecting, you might want to keep the status quo."

Ziegelbauer said the bill won't survive in its current wording.

He said if the bill advances to the point where "it's in danger of passing ... there will be fairly significant compromise ... dealing with concerns expressed like local programming and loss of revenue that the cities count on."

He said he was, generally, in favor of more competition, rather than less, "and in the delivery of TV services there's room for a lot more competition."

Ziegelbauer and Nation were in agreement that no final vote is likely any time soon.

"We're just in committee hearings, no committee votes, yet," Nation said. "But this is the time for those who want to be heard to voice their opinions."

Leibham: 888-295-8750

Alan Lasee: 608-266-3512

Frank Lasee: 608-266-9870

Bob Ziegelbauer: 888-529-0025

Charlie Mathews: 920-686-2969, or cmathews@htrnews.com