Note: An example of what we can expect to see when state franchising rollouts impact on current city-cable franchise negotiations.

from: Arizona Daily Star [1]

Takeover language may scuttle Cox pact
By Rob O'Dell
Arizona Daily Star
Published: 03.10.2007

The up and down negotiations between the city and Cox Communications over its cable franchise look to be heading down again.

Cox sent out a press release Friday accusing the city of having "rejected" a deal tentatively approved March 2. Cox contends the city scuttled the agreement by inserting a new "11th- hour" provision which would allow it to buy the company's cable franchise when the agreement expires in five years.

Anne Doris, Cox's vice-president for Southern Arizona, said any deal between the two entities is dead "for as long as the city wants a takeover requirement in it."
City officials, however, said there's nothing new about the provision.

City Attorney Mike Rankin said it has been part of every license agreement the city has ever had, dating back to the original franchise award more than 25 years ago. Cox's characterization of it as an 11th-hour addition was "entirely inaccurate," he said.

In a written response to Cox, Rankin said, "The purchase option provides protection to cable customers in the event that Cox or its successor fails to satisfy the terms of the license or to provide for the demonstrated needs of the community."

He said, "Cox would never face the terms of the purchase provision in the absence of such a failure."
Rankin said he won't comment about the deal being dead due to the takeover provision until Cox tells him that directly.

The City Council voted 5-2 to approve a tentative five-year agreement last week that will ultimately reduce the cable provider's public, educational and governmental channels from nine channels to five. At the time, Cox officials cheered the deal.

But on Friday, Doris said Cox thought the agreement voted on by the council didn't include the license takeover provision. "It's just not an option we can allow," Doris said.

City officials also question the statement's timing, coming just after a bill in the Legislature which would dictate license terms to the city was scheduled to be heard in two Senate committees on Wednesday.

"The timing is no coincidence," said Jason Baran, a city lobbyist.

Cox has pushed the bill, which would reduce the city's public-access channels by more than half and reduce its customer-paid franchise fees from 8.5 percent to 5 percent. It has already passed the House of Representatives.

When the council approved the agreement last week, Councilman Jose Ibarra said he voted against the agreement in part because Cox did not agree to pull the legislation. "If we're negotiating in good faith, they need to withdraw their legislation," Ibarra said at the time.

Contact reporter Rob O'Dell at 573-4240 or rodell@azstarnet.com.