Island, Comcast agree on cable TV contract

Island, Comcast agree on cable TV contract

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Comcast trucks may soon be rolling to Chappy. — File photo by Ralph Stewart

Chappaquiddick residents would get cable television service at a steep price, and Martha’s Vineyard Community Television (MVTV) would get a substantial increase in funding, under a cable contract agreement with Comcast Corporation that was endorsed by the cable advisory board (CAB) last week. After a final round of routine revisions, the board of selectmen in each Island town must vote to approve the new 10-year contract.

The CAB, made up of representatives from the six Island towns, negotiated the terms of what is essentially a license renewal. Although each town signs the contract individually, all six contain the same terms and language.

“Hopefully, within 30 days, we’ll have a contract we can recommend to selectmen,” said Jennifer Rand, West Tisbury’s CAB member. Ms. Rand chaired the committee, which included one representative from each town.

The previous contract with the Philadelphia-based cable and Internet company expired June 30, 2011. The cable advisory board and Comcast extended the contract several times over the long and sometimes contentious negotiation.

“Part of me was surprised, but part of me realizes we were negotiating for six towns,” Ms. Rand said. “Most individual licenses take six months or a year. We did six.”

West Tisbury selectmen Richard Knabel serves on the MVTV board of directors.

“It took a very, very long time, by everyone’s estimate, too long,” he said. “Not everybody is entirely happy, but you don’t get everything you want. Could it have been better? Yes. Could it have been worse? Yes.”

Costly cableIf enough Chappaquiddick residents sign up, Comcast will provide service to the remote Island for the first time. Prime time programming will come at a prime cost, however. Under the terms of the draft contract, each homeowner would have to pay $2,139 toward the cost of building the cable infrastructure. The town of Edgartown would contribute $131,000 from its share of the capital funds payment included in the new contract, and Comcast will fund part of the build-out.

Each subscriber would have to commit to two years of cable service at the standard price. There will be a one-year sign-up period, and Comcast will require half of the homeowners on Chappaquiddick, or 270 subscribers, to sign a commitment letter under the terms outlined in the contract, or the project will not go forward.

Chappaquiddick Island Association president Roger Becker, speaking for himself and not the association, said the draft agreement is an improvement from earlier contract offers. “It sounds like it’s the best they’re going to get out of Comcast,” he said. “They did get them to agree to quite a few concessions.”

He said Comcast at first insisted on a premium level of services as a minimum requirement, but now will accept any level of service available to other Island subscribers. After two years, Chappaquiddick residents would have the option of seasonal cable service.

“At least that gives the thing some chance,” Mr. Becker said. He said that only one of 14 residents said they intended to commit to service under the latest terms, in an informal straw poll taken at a weekly community potluck supper last week.

“I think a lot of people will come around to it,” Mr. Becker said. “If they see there’s no alternative and they want to have cable come to their property, which will certainly increase the value of their property for rentals or anything else, that number will go up. I don’t know what to expect. We’re going to find out.”

He is skeptical, however, that year-round residents will commit to service in large numbers, given the initial $2,139 capital charge.

“That’s a big number,” he said. “If you look down the list, it’s hard to see where that’s going to come from, realizing that a lot of people have been here a while, and they’ve stabilized. They have satellite and DSL, or maybe service from Chappy WISP. These are people who have embraced the inconvenience. They’ve found work-arounds for their communications. They might be a very different group than the summer folks, who might look at it as just a financial question.”

Community TV

Also a sticking point in the long negotiation was capital improvements for MVTV, the community television station that provides public access to studios, equipment and air time, as well as broadcasts of many local government meetings and events.

As in the previous contract, 5 percent of the payments subscribers make to Comcast is returned to the towns to fund MVTV.

At the beginning of the previous contract, all Island towns agreed to pool those payments to finance operation of a regional public access system.

During the recent negotiation, the six towns asked Comcast for more than $1 million in additional payments, to finance a new studio building and convert all the broadcast equipment to high-definition.

Eventually, negotiators agreed on a figure of $500,000, plus $120,000 for capital improvements already completed under the previous contract.

According to Mr. Knabel, that money will be divided proportionately to each town. Edgartown will use its portion of the capital improvement funding to finance new cable infrastructure on Chappaquiddick.

He estimates that MVTV will get about $300,000 of the capital improvement funding. “It puts some stress on MVTV, dealing with a new building and having to buy a lot of equipment,” he said.

Comcast serves about 10,000 Island homes and earned an estimated $85 million in cable revenue under the previous contract, according to a consultant who provided information to the negotiating committee.

Little leverage

The new contract would be the Island’s third cable contract, the second with Comcast. The first contract was between individual towns and the now-defunct Adelphia cable system. The Adelphia contract was renewed in 2001 after nearly eight months of extensions and delays. That contract, in part, provided the funding to establish a PEG station (public, education and government access). Comcast entered the picture in 2006 after Adelphia went bankrupt.

Contracts between cable providers and communities are essentially land-use licenses by which the town agrees, in exchange for cash and kind, to license the provider to use town roads and property to install cable lines and equipment in order to provide service to its customers.

The license is not exclusive — other cable providers can also be licensed by a community — but in small markets like the Vineyard there is rarely competition for subscribers.

Federal law requires that cable companies provide public access television channels available to communities for their own programming. Currently, MVTV provides three channels for public, educational, and local government programming.

The negotiating process is subject to defined federal regulations The towns issue a request for proposal (RFP) which outlines their plans and “wish lists” for additional resources and service upgrades. The cable company then can offer a counter-proposal in their RFP response, after which the negotiating process begins.The ability of communities to regulate what services cable companies must provide, and at what cost, is limited. The CAB has no authority over cable rates or programming or over internet and telephone services, which are not part of the cable TV contract.

However, towns are free to negotiate service upgrades and to seek capital funding for equipment and facilities. They may also use past performance, present needs, and future planning to create negotiating leverage to obtain additional equipment and resources from the cable provider.