from: The Badger Herald [1]

Cable bill could turn off city public access channels

by Keegan Kyle
Friday, April 20, 2007

As two legislative committees approved a statewide video franchise bill this week, Madison public station managers predicted future budget cuts, the loss of one channel or increased taxes.

The proposed bill restructures the distribution of revenue-sharing agreements between video service providers and local municipalities. Currently, companies must negotiate franchise agreements with any municipality before using its public rights to cable.

The bill aims to streamline the process by creating a single statewide franchise approved and managed by a state agency. It would also change the fee system used by public stations for funding.

In particular, the bill proposes repealing the public, educational and government (PEG) “access fee” currently paid by cable service subscribers. In Madison, Charter Communications cable subscribers pay 64 cents each month.

Charles Uphoff, executive director of WYOU Channel 4 in Madison, said 80 percent of the community station’s budget comes from PEG fees. Without the funding, he said the station “would likely fold.”

Apart from volunteer-created programming, the station also organizes filming classes and allows people to borrow expensive camera equipment for no charge. Uphoff said student groups at the University of Wisconsin often use the cameras and studio for class projects.

“There’s no way we would be able to sustain it on the short run [without the funding],” Uphoff added.

On Thursday, the state Senate’s utility committee amended its version of the bill to include a three-year transition period for municipalities to adjust to the loss of PEG fees.

Jeff Bentoff, spokesperson for AT&T Wisconsin, which worked with state legislators and cable companies across the state to create the bill, said it would not prevent local governments from providing additional funding for its PEG channels.

Uphoff said a likely source of additional funding would be increased property taxes.

“But then you’re asking everyone to pay for a service whether they have it or not,” he added.

Dan Thompson, executive director of the Wisconsin Municipalities League, said the funding would be a larger issue for communities that have numerous PEG channels. Madison has four public channels, including City Channel 12 and WYOU, both of which are partially funded by the PEG fees.

Although opposing the bill, Thompson said it is likely to pass the state Legislature. He said legislators are overwhelmingly pressured by frustrated cable subscribers seeking more service providers and large video companies seeking new markets.

“We get blamed for the fact that there’s only one cable company in town,” Thompson said. “Most city and village officials would love for there to be more competition.”

Under state and federal law, municipalities are prohibited from creating cable monopolies, but it often happens because new video providers struggle to enter markets that are already controlled by one established service.

AT&T entered the video market just recently with its new video service, but it is only one of 38 organizations that have reported lobbying in support of the bill, according to State Ethics Board reports.

“I think the interest in this legislation comes from consumers,” Bentoff said. “They’ve really been unhappy with their choices and the prices in the cable market.”

Supporters of the legislation say increased competition would decrease cable rates and could even provide more funding to PEG channels.

The other main part of funding for most channels is a 5 percent profit-sharing agreement with cable companies. With increased competition and decreased rates, supporters of the bill say more people will buy video services, resulting in more profit sharing and more funding for PEG channels.

But like many public station managers across the state, Uphoff remains skeptical.

“If you’re expecting cable rates to go down, don’t hold your breath,” he said. “The reality is you need to look beyond the slogans and how this bill will really impact PEG channels.”