"Do Cable Deal Together", Schenectady Gazette.

EDITORIAL

7/11/04

Do cable deal together

With about 90 percent of the cable market in Schenectady County (all but Princetown and part of Duanesburg), Time Warner has a virtual monopoly. That, of course, gives it a big advantage when negotiating contracts with the various municipalities — make that bigger
advantage, because the municipalities lack the telecommunications and legal experts TW has at its disposal. But the city and towns could do much to increase their own clout if they negotiate as a bloc, as the county is urging them to do.

Such an opportunity presents itself because the contracts between the cable company and the municipalities have all either expired or are about to in the next year or so. The municipalities should be looking for a better deal, in terms of revenues, services, public
access and other things.

That wouldn’t be hard in some cases. For instance, the current contract with the city, negotiated with TCI (which Time Warner acquired in 1999), provides just $80,000 annually for the city’s full-service public access operation, Channel 16, far less than it
costs to run it. Other municipalities are getting no money or facilities of their own for public access. Although under their contracts they are entitled to their own channels, they rely on the city’s Channel 16, which they don’t help pay for.

As for revenue, the municipalities could also do better. While under federal law they are entitled to no more than 5 percent of TW’s gross revenues, there’s no reason why those revenues have to be limited to TW’s subscriber base, as they are now. Gross revenues could be defined to include such things as local advertising revenue as
well.

Nor do the negotiations necessarily have to be limited to cable. The municipalities might be able to save big money on such things as high-speed Internet service for government agencies and community institutions, 911 communications and even phone service through a mega-deal with Time Warner. The company could presumably be more generous because it would be getting several big customers all at once, while saving money by negotiating just one contract rather than seven separate ones.

There are a lot of possibilities and a lot at stake here. The municipalities should join forces and also hire a consultant, who can help them decide what to ask for and then help them get it.

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