June 1, 2004

Public Access at the Crossroads: CAN TV's Funding Crisis Comes to a Head, for Better or Worse

CAN TV (Chicago Access Network Television, Chicago's fleet of public access television channels) found itself spending the year 2004 to date stuck in a struggle for its rightful funding -- a struggle which is poised to come to an end soon, one way or another.

As Kari Lydersen reported in the March 2004 issue of Third Coast Press, the cable company RCN defaulted on January 8 on a $215,000 due payment to CAN TV. This was a sequel of the same old hackneyed script played out more than a year before when RCN defaulted on a $645,000 payment to CAN TV before public pressure and threats of city council fines forced RCN to pay up.

But in the wake of the January 2004 fault, Chicago citizens pounced into action and on February 10, 2004, the Cable Commission approved two resolutions against RCN -- one for its late payment, a second for having an inadequate cable construction schedule. The Commission gave RCN until February 20 to clean up its act; RCN didn't comply. On February 21, the Commission then cracked down hard by launching a round of fines against RCN totaling $1 million dollars per day.

To justify their default, RCN claimed a sluggish economy and stagnant profits, even though the City Cable Commission said that RCN was involved in digital television contracts in five U.S. cities totaling more than $245 million. Even so, RCN hadn't turned a profit in four years' time, and RCN announced it would be filing for bankruptcy, thereby seemingly staving off (for the moment, at least) the accumulating fines.

For the whole time during this dispute, RCN requested to pull out from its legally binding cable contract with the city. Obviously if RCN succeeded, this would likely open up a Pandora's box for other companies to do likewise. But we must be careful not to focus too much on RCN alone. The staredown between CAN TV with RCN is bad enough. What's worse is that CAN TV is stuck with a funding structure which assumes a competitive cable market -- each company pays the same amount of money to contribute to CAN TV, no matter how few or how many customers it has.

This is becoming a problem because the trajectory of the cable market is towards a non-competitive environment. It's very likely that a single company would become Chicago's cable provider and thus become the only company which would pay fees to CAN TV where before there were multiple companies. Given the current funding arrangement, this would mean less money for CAN TV in the long term, even though cable subscriber base continually grows and is now at an all-time high.

While the city's cable market is forced to play the game of Monopoly, there is an encouraging new development which would change the rules of the funding game in favor of CAN TV.

On May 5, 2004, Chicago city alderman Bernard Stone introduced before the city council an ordinance which would change the funding structure for Chicago public access television. The proposal is that CAN TV would automatically receive one-fifth of the city's cable franchise fee. In dollar terms, we're talking about $2 million dollars from a franchise fee totaling about $11 million per year. This ordinance has a lot of positives. One, it would provide the financial bedrock for CAN TV for now and the foreseeable future, no matter which company or companies hold cable contracts with the city. Two, an arrangement like this is the norm for cable access outlets across the country. One survey showed some three-quarters of such outlets in the U.S. get more than half their funds through cable franchise fees. Three, the proposed fee is not a budget-breaker by any means; it represents about one-twentieth of one percent of the annual budget of the city of Chicago.

It might be premature to say this (or maybe not), but this ordinance might be a do-or-die situation for CAN TV. If this ordinance passes and becomes law, it would fix the funding matter for CAN TV for the immediate and foreseeable future. If not, CAN TV stands to be hobbled by the funding struggle, reducing its current budget by some 40%, rolling back to budget levels that CAN TV had in 1990, and leaving its very future in doubt.

The struggle is underway. There's already some momentum to mobilize community support for this ordinance. The city council has had some recent history in voting for positive resolutions and ordinances -- against the 2003 War in Iraq, against the USA Patriot Act, and unanimously for a diverse media in the face of the 2003 FCC media ownership fight. Hope is that the city council will vote in support of this ordinance as well.

You can help. Contact your Chicago city alderman and Mayor Daley ask for their support Alderman Stone's May 5th ordinance to restructure the funding for CAN TV. Call CAN TV at 312-738-1400 or visit www.cantv.org/rcn for more information regarding the latest suggested actions and developments. Don't be intimidated by contacting your elected officials: it's not that hard, it's not that long, and a few minutes of your time can make a big difference in helping to preserve one of the remaining open media outlets in Chicago.