I think people also choose to use illegal cable boxes too. And really, though, in fairness, what is the cost of that, what is the projected cost of theft of service? I mean, I know it's not as widespread as it used to be because of the technology to stop it, but it still has to be significant. It's like the same problem we have with our auto insurance. You know, if you had more people paying fair number for their cable bill, the prices maybe a little different.
We think that the cable industry nationally loses billion dollars of dollars to the unauthorized reception of its services. Here in Philadelphia, our experience 247 10/31/00 PUBLIC PROPERTY, BILL 000452 has been that we must be continually be vigilant to keep only those subscribers who are paying on the rolls. We generally find about 4 to percent 5 of the homes in Philadelphia are currently receiving the service in an unauthorized fashion.
In fairness to the cherry-picking question which has been going on, what's the situation relative to digital boxes? Digital cable service seems to be available in some areas of the City and not available in others. Is there --
It's driven by technology. And if you remember when I was here before you in 1998, I committed to upgrading the cable system within five years so that all areas would be built and able to receive not only digital cable, but high-speed Internet service. I'm pleased to report that Comcast is over a year ahead of schedule on its upgrade plan and that by the end of next year, 85 percent of all of the residents in Comcast service areas will be able to receive not only digital cable but high-speed cable modems. We will complete it probably by the end of the year 2002. 248 10/31/00 PUBLIC PROPERTY, BILL 000452
Thank you. This is really more of a general question. What's the cable box charge currently?
So it's basically $3 a month, $36 a year. What's a cable box cost?
Generally, a cable box brand-new for a basic analog box is approximately $110. The rate for what we may charge for the box is regulated by the FCC. They take a look at how much the purchase price has been and what they have stated what a fair rate of return is on the purchase of that equipment. So that rate is regulated; we don't price it.
I understand that, 249 10/31/00 PUBLIC PROPERTY, BILL 000452 but whether it's you or Time Warner, this is more of a kind broad cable question, I mean, after three years, you've gotten the money back for what it costs, and if you never switch out, and I understand that soon we will be switching out, but if you have cable from the start and nothing ever wrong with the box, I mean, why are we still paying for it?
Because a significant number of those boxes never come back into circulation; they are used for other purposes or they're simply left behind.
But I still have mine, so why am I still paying for it? It's going to circulate back to you. I mean, I've paid for the thing like five times over (unintelligible). Why am I still paying for a cable box? I mean after some point in time, I mean, seriously, you should really --
I would suggest to you that while you have had your box on an uninterrupted basis, you're not the norm.
I've been told that before, Mr. Pardini, but never at a public 250 10/31/00 PUBLIC PROPERTY, BILL 000452 hearing. (Laughter.)
Would you like to go back and talk about Channel again? 6
Thank you. It's only an explanation; it may not be an answer but it's an explanation. Thank you.
If there are no 13 other questions, Mr. James, I think, did you indicate that there was some desire to come up and talk about some of the charts and perhaps we'll leave the doctor's chart up here so you can deal with some of those issues.
Thank you very much. I just wanted to take a moment because I wanted to kind of comment on a statement that was made earlier because I, unfortunately, until tonight did not have opportunity to see report, so this was the first time for me to look at it. And some staff hasn't had an opportunity and we'd like to have an opportunity to review this material and 251 10/31/00 PUBLIC PROPERTY, BILL 000452 respond back to you.
But one thing -- I'm not sure if it's an accurate representation, when you asked the question before is, had the plan to build out changed? And, no, it has not. And there is a discrepancy in what was proposed, or at least what's in the report by Dr. Hutchinson and what's in the actual plan that you received, where there was a mention that there was not going to be any -- or it was a small percentage of penetration in the African-American community in the first five years or four years. And my reading of the chart and I'll show it to you, there is a significant difference in the two charts. According to the chart that's in the materials, the green section represents the first three years, there's a lighter shade of green --
I understand that we have the ability to bring it up on the monitor. There we go, okay. 252 10/31/00 PUBLIC PROPERTY, BILL 000452
If you look at what RCN's construction plan in the seven years is, it's a difference than what's in the report by Dr. Hutchinson in that in his report, the green area represents the first three to four years and lighter shades of green and the yellow (unintelligible) the Years 5 and 6, where I believe he is indicating a penetration into what would be a large percentage of African-Americans. But if you look in the construction plan, Area 3 is divided; it goes in one area of the Northeast (unintelligible) and goes up to Area 3 at the same time, so that there is a higher penetration into areas that one would assume just by this report to be the African-American community. So I wasn't sure which report or which chart he was looking at but that's not the chart that's in your plan and that's not the chart that's in the seven-year construction plan.
So the predominant area that we're talking about, the professor contends, won't be built out till Year 6; this chart indicates it would be built out Year 3.
Right. And I think in the demographics, we would like to have the opportunity to look at the demographics and respond to it as well and make sure it accurately reflects what we think is the demographics.
Just one question on that as we're now looking at the monitor, Mr. James, and I understand what you're saying about the discrepancy, because you're saying that there is an area of essentially upper North Philadelphia that is in what's -- that has a 3 in the middle of it.
And that would mean that in the Year 3, there's going to be build-out activity in that area.
Then my only question is, as I'm looking now on the farthest northeast section of the City, bordering Bucks County, that's Year 1.
Year 3, you're going there, and then the proposal is to skip the lower Northeast and what, I guess, is Kensington, Richmond, and all of those areas and then immediately go to North Philadelphia?
Can you just name a couple of the others so we can just orientate ourselves.
In Area 3 in the center, it's mostly North Philadelphia and parts of --
The lower part of Germantown, and you'll pick up some parts of Olney right there in Area 3. 255 10/31/00 PUBLIC PROPERTY, BILL 000452
Right. It looks like Olney and East and West Oak Lane and --
I mean, the idea was to have some appearances in the different markets, so it was not just the cherry-picking (unintelligible) and build out the whole area.
Has that been the original plan from the get-go or was that changed?
Like I said, there were several different discussions regarding it, but that was the part that was finally settled upon to be included the bill, and that's completely different than what's on Dr. Hutchinson's report.
Okay, thank you. Thank you, Mr. James. Dave Davis, please. (Witnesses come forward.)
We intend to go 256 10/31/00 PUBLIC PROPERTY, BILL 000452 through the entire list this evening as the first day and night of hearings on this. Can I just do a real quick run-down as to who was originally scheduled to testify so I can get an idea of -- I see Lance Haver is still here, Ed Mooney is still here. The representative from the Police Athletic League is not here, okay. Dina Mendros?
Reverend Shine is here. Thank you. Lisa Hilsee is gone. Will Daniel from Wilco Electronics is here. Gretchen Clausing and Inja Coates are here. Richard O'Malley?
Dylan Wrynn? He left. Joan Preston? 257 10/31/00 PUBLIC PROPERTY, BILL 000452
Okay. We thank you for your patience. The reason that we get the bulk of the technical testimony on the record is so we have a consistent record and where we can have questions on an ongoing basis. So while you're at the end of the list, we do appreciate you're being here and your patience, but we need to get all this other stuff in so know what we're talking about by the end. Mr. Davis, please identify yourself for the record.
Thank you, Chairman Kenney. My name is Dave Davis. I'm the President and General Manager of WPVI Channel 6. Despite the lateness of the hour, I appreciate your patience and the opportunity to come before you today and the members of Council. Hopefully the record will show that we are still in session now so my wife will understand why I'm not home for trick-or-treat.
I have the same 258 10/31/00 PUBLIC PROPERTY, BILL 000452 problem. Want to borrow my cell phone? (Laughter.)
I've already called, it doesn't do much good. I have been employed at Channel 6 for the last eleven years. I am here to speak in favor of this bill that gives permission to RCN Telecom Services to build a second video cable system in Philadelphia. Going back to the days of WFIL and American Bandstand, Channel 6 has been the community television station of Philadelphia. For the last 25 years, we have been the leading provider of local news, information, and entertainment programming. We have been long-term partners with the City on every important event: The 4th of July, the Liberty Bell, the Millennium Celebration, the First Union Professional Bank Race, the Flower Show, Ethnic (unintelligible) Tall Ships, the Volunteer Summit. If I can get out of here on time, tomorrow at noon, we are having an announcement of this year's Thanksgiving Day Parade, which we do in conjunction with the 259 10/31/00 PUBLIC PROPERTY, BILL 000452 City, an even that we rescued when Gimbel's went out of business in 1986. We are also planning a special programming for the 100th anniversary of City Hall on New Year's Eve. Quite simply, Channel 6 is Philadelphia. We try to program the station in a way that respects our viewers. Action News is presented by veteran professionals know the City and report on it responsibly. We produce the most public affairs programming of any station, shows like Visions and Inside Story. Next month, we celebrate years of Puerto Rican Panorama. 14 We are the station of record for 15 political discourse, offering nine hours of 16 political debate time this fall. Last fall, 17 Channel 6 was the only station to sponsor a debate 18 in the mayor's race, and we did three of them. 19 Our syndicated programming is Oprah, 20 Rose, Regis, Wheel of Fortune, Jeopardy -- not 21 Jerry Springer, Howard Stern, or Dr. Laura. 22 We also belong to a network that shares 23 our commitment to quality, with first-rate news 24 and entertainment, from Good Morning America to 25 Nightline, the Practice, to Millionaire. 260 10/31/00 PUBLIC PROPERTY, BILL 000452 We are the most-watched station in Philadelphia by an average of 40 percent, and we enjoy the highest audience levels of any major market station in the country. For that, we are very grateful to our viewers. We also know that we have to compete for those viewers every hour of every day, because they have many other choices. This is not the same situation in our cable industry. When the City was first wired for cable, you saw the wisdom of spreading franchises among different providers. In the surrounding region, there were different cable company owners. Now, for all 15 practical purposes, with 85 percent of the market under its control, there is just one: the Comcast Corporation. Eight years ago. When the federal government first passed retransmission consent laws, giving broadcast stations the right to negotiate a fair value for the signal, Channel 6 negotiated dozens and dozens of agreements with all the cable companies in the region. No one company controlled more than 28 percent of the market. Those deals were done quietly, 261 10/31/00 PUBLIC PROPERTY, BILL 000452 efficiently, and without rising to the public's attention. Now turn the clock ahead to this year and look at this chart at how things have changed since our last negotiation. Right now, Comcast owns or controls approximately 85 percent of the 2 million cable homes in our market. In 7 years, they have from 28 percent to 85 percent. In 1997, Comcast followed up its take-over of the Philadelphia 76ers and Flyers with Comcast SportsNet, the local sports channel. As the Philadelphia Inquirer pointed out this past Sunday, the biggest reason for SportsNet is to protect the Comcast Cable monopoly. Comcast has used a loophole in federal communications law to deprive one of its natural competitors, the home satellite industry, of this local programming.
In effect, Comcast is using the assets of two of Philadelphia's sports teams to maintain the highest cable rates in the country. Our original agreement with Comcast expired December 31st of 1999. For more than a year, we have been negotiating for another long-term development for their use of Channel 6 262 10/31/00 PUBLIC PROPERTY, BILL 000452 signal. Since January 1, we have received nothing from Comcast, nothing in exchange for the most popular channel on its system, while they continue to collect the highest monthly cable charges in the country from Philadelphia residents. Because of our respect for viewers and to show good faith in negotiations, we have been granting temporary extensions to Comcast for the last ten months. Just last Friday, we gave them another extension, this time until November 29th. And what has Comcast offered? They have pledged not to take Channel 6 off its system. That would be like me pledging to keep driving your car without paying for it. Or a Comcast customer pledging to keep taking the cable service, even though they stopped paying for it. I hope you see through that hollow pledge, as we do. And we want City Council to hear this straight from us. If Comcast continues to refuse to give our company fair value for Channel 6, these three extensions will end. And Comcast will have to discuss directly with their own customers how much their cable service is worth without Channel 6. 263 10/31/00 PUBLIC PROPERTY, BILL 000452 Comcast is the last major cable company that we do not have development with. Why? The only reason is because they are negotiating from the strength of their monopoly, and this is what brings us here today before you. Imagine if there were already a second cable provider in Philadelphia. With one of them, RCN in this case, we already had an agreement for carriage of Channel 6. With the other, Comcast, we did not have an agreement. Do you think Comcast would be giving us the back of its hand as they are now? Or do you think they would be aggressively pursuing a deal with Channel 6 so they could include us in their package to sell to consumers. Or imagine if the Comcast salesperson at your door was describing the bundle of channels available for the basic rate of $42 but, by the way, Channel 6 was not a part of that package. Do you think they will sign up as many customers at that rate? Please take a look at the chart to your right. It shows the average number of television households watching in cable homes. Almost all of them are obviously Comcast homes. m. , during the most 4 recent ratings period in May of 2000. 3 rating in almost 200,000 households in any given quarter hour. Next is the NBC station, with a little less than a 5 rating, or 125,000 households. The bars go down in descending order through the other local stations. Then the cable channels start to show up -- Nickelodeon, HBO, and ESPN, the most popular, at about a 1 rating. 7 rating. And remember, this is during May, when the Flyers ran in the play-offs, so it was a peak month for that channel. The rest of the channels obviously (unintelligible) don't have enough viewership to even register with Nielson. So when we try to determine value, let's compute. More than a 7 rating for Channel 6, less than 7/10s for Comcast SportsNet. Channel 6, then, is at least ten times as popular with the 265 10/31/00 PUBLIC PROPERTY, BILL 000452 viewers as SportsNet. Comcast charges customers more than $1 a month for SportsNet. So what is Channel worth to them? Maybe $10 a month by 5 their own pricing. 6 And what have we asked of Comcast for its right to resell the Channel 6 signal and have the most popular station on in its system? The grand total of 65 cents a month, 65 cents. Now, we know Comcast isn't able to sell ad time on Channel 6 like some other of its cable channels, but by any reasonable standard, 65 cents a month for the most watched channel seems fair. And we tried to be flexible.
If Comcast, like most cable companies, don't want to pay cash, our parent company has offered the option of placing two cable channels it owns on its system. If Comcast owns a Disney cartoon channel for kids and a soap opera channel for soap fans, we would give them the use of Channel 6. And we also ask that Comcast give its viewers in the City the same thing it provides most of its suburban customers: the Disney Channel on basic service instead of at a premium price. So why has Comcast refused to accept 266 10/31/00 PUBLIC PROPERTY, BILL 000452 this offer, the same basic deal we have with every other major cable operator, one that gives fair value to Channel 6? Because a monopoly doesn't have to make fair deal. Comcast knows we are on the same boat as every consumer; we've had just one cable company to deal with. And that brings us back to this hearing and the bill before you and your committee. We ask that you vote to begin to change that equation to give consumers and broadcasters a choice to help us break through the monopoly wall. Make no 13 mistake; consumers pay a steep price for the Comcast monopoly. 81 per month for 76 channels, not including the Disney Channel. In Chicago, RCN charges only $29 a month for 88 challenges, including Disney Channel. In its own study of cable competition, the FCC found that cable rates are 19 percent lower when over-builders like RCN are present. Applying this FCC calculation to the entire Philadelphia market yields approximately $100 million in cable overcharges to consumers 267 10/31/00 PUBLIC PROPERTY, BILL 000452 every year. I want to make it clear that we do not have any financial investment in RCN, nor do we own any distribution system other than a broadcast tower in Roxborough that continues to provide free over-the-air service directly to consumers, if they have an antenna. For the last two years, we have provided free video streaming of our newscast and special local programming over the Internet and we are now on satellite. Anyone who subscribes to that service can receive Channel 6. You get more channels at less cost, with Channel 6 included. It's been our privilege to serve this community and we hope this testimony we offer today helps your committee make a more informed decision. Thanks again for the opportunity to come before you, and I stand ready to answer any of your questions.
Thank you for your testimony. And I think Councilmember Nutter and Councilmember Brown were trying basically feel out this whole situation, trying to understand what seems to be a real deep animosity and anger about 268 10/31/00 PUBLIC PROPERTY, BILL 000452 this whole situation between Comcast and -- I mean, as big-business people go, it seems to be a little personal from time to time.
Not personally but corporately. That's just my impression. How long has Disney owned ABC?
Five years, 1995. They took acquisition between 1995 and going into --
Prior to that ownership, what was the relationship with ABC and Comcast as far as getting on? I mean, how were they on; were they on for free then too, did ABC complain?
Well, understand -- (Unintelligible, parties talking over each other.)
Well, I think there's two things. Number one, I think you have to look at that chart. In 1993 when ABC and Channel 6 negotiated agreements, we did basically the same deal with everybody and we had lots of different 269 10/31/00 PUBLIC PROPERTY, BILL 000452 people to agree with. (Unintelligible, parties talking over each other.)
If you don't want it distributed by signal to hold over our head, 85 percent of the cable homes. It just wasn't that same situation. Understand, (unintelligible) we compete with every day on this chart over here. We compete with those channels, we compete with other cable channels, Disney movies. You go to the theater, you have or 30 movies to choose 13 from in (unintelligible). Competition is 14 obviously, you know, not a problem for us. The 15 issue in this case is that we're not dealing in a 16 competitive environment; we're dealing with one 17 cable company. 18
Are all of those 19 cable companies listed on 1993's list, were they 20 all serving Philadelphia at that time?
Serving our market. In the City, there were four. (Unintelligible, parties talking over each other.)
-- were awarded four 270 10/31/00 PUBLIC PROPERTY, BILL 000452 different franchises.
Yes. And each one -- you would know better than I would -- (Unintelligible, parties talking over each other.)
Right. By '93, there were probably only three, Mr. Chairman, three cable companies. I think by '93, Comcast, I think, had potentially bought --
We negotiate, as Comcast does, for the entire market. They -- we, in fact, negotiate for the entire system. Comcast owns homes outside of Philadelphia; we obviously own 271 10/31/00 PUBLIC PROPERTY, BILL 000452 stations outside of Philadelphia. The reason Philadelphia has become the center point is because they own 1.5, 1.8 million homes in this market. The vast majority of their homes are in the Philadelphia market.
I guess what I want to find out is -- get a flavor for is, what was a typical arrangement with ABC in 1993 and prior?
In 1993, in the first year of retransmission agreements, our deals were in exchange -- again, most cable companies, even though they build their business on the backs of the over-the-air stations, most cable companies took a vow not to ever pay a broadcaster for their signal. And so the broadcasters, all of whom were owned by larger parent companies, also owned cable channels, said, Fine, if you don't want to pay us cash, then will you clear these channels that we own? And everybody did that deal. With us back in '93, it was for ESPN2. And that's how ESPN2 --
So that the so-called lost leader that was -- which turned out not to be a lost leader, but that was kind of the throw-in at the time. 272 10/31/00 PUBLIC PROPERTY, BILL 000452
But no money 5 changed hands, there was no payment for 6. 6
And now today's discussion deals with, You can take us but you need to do the soap channel and Disney and the Cartoon Network.
Yes. Understand with the Disney Channel, in 68 million homes out of 70 million that the Disney Channel is on, it's on in basic. Comcast is the last place where the Disney Channel is still a premium. And as you just heard, it's only for some of its customers, most of whom are in the City updated. I've got some update information. In '93, the Comcast share in the City was 54 percent and now it's 80 percent. And that's just in the City.
So '83 or '93? 273 10/31/00 PUBLIC PROPERTY, BILL 000452
All right. So you believe that approval of RCN would loosen up Comcast's grip on your throat.
We're saying that because Comcast is the last system for us to make a deal with, because we have been granting them extensions since January 1, because since January 1, they have been paying us nothing in return for that, we're saying, forget going back in arrears, right now, if we can get a deal, there's a cable company that's one step larger than they are nationally, Time Warner, there's one step lower, which is Charter. The deal that we have on the table and that we have had on the table with them says exactly in the middle of those two deals and it calls for the clearance to Disney, SoapNet migration of the Disney Channel to basic in the same rate, in the same return, the same level of 274 10/31/00 PUBLIC PROPERTY, BILL 000452 payment that those other cable companies have agreed to. The question you ask is a very good one. Why has it been so difficult to make a deal with Comcast? The only thing that we can draw that conclusion from is this effort, a very successful effort by them, they're a very smart company, very good in a business sense, to create this super cluster of homes, from Baltimore- Washington up to northern New Jersey, with the Philadelphia region right in the middle. That has been their business plan to concentrate homes within a given area, to create this monopoly, because then they assume they can deal from a gaiter position of strength, which they seem to have been able to do in our negotiation.
And please don't take any offense to this question, and I'm not defending Comcast or I'm not criticizing ABC or Disney or anybody. But what is the difference in a company like Comcast or a company like ABC using its ability, it's power, its brain power to be able to become -- I mean, for example, I would say that ABC, in all fairness to the other TV news 275 10/31/00 PUBLIC PROPERTY, BILL 000452 stations, is a virtual monopoly in Philadelphia. I would suspect that -- I mean, when I, for example, when I'm doing my news channel surfing at night, I start out at o'clock on 6, and then I 6 start moving my way around the dial. 7
Let me just finish. 9 But also, if you look at the number of shows that 10 are popular on the prime time and commercial 11 entertainment ABC lineup, it is -- explain to me the difference between ABC's overall control of the ratings and Comcast's overall control of their market; what is the difference in --
Well, we control a much lower percentage, number one. (Unintelligible, parties talking over each other.)
Number two, you are free, as you just described, to browse among all the stations, all the channels. If we weren't doing a good job, I assume you wouldn't be watching it. One warning: If you become a Comcast customer with some of their new digital boxes and you turn on your set through that digital box, 276 10/31/00 PUBLIC PROPERTY, BILL 000452 it's not going to turn off to your favorite channel; it's going to turn on the CN 8, because that's the way they set it up.
Okay. It doesn't turn on to the last channel you watched. That's how they can exercise control more that we do. We don't own a distribution other than the tower that sends out our signal to people with an antenna. We can't directly control what people watch, where those channels are placed at, we don't have that control. All we have is content, all we have is content that the viewers have to make decision every day whether to watch us or not.
And I'm not going to suggest this is going to happen but let me give you an example. I mean, when you're talking about control of the channels, it's that they could take 6 and move you to 63.
But theoretically, it could. 277 10/31/00 PUBLIC PROPERTY, BILL 000452
Okay, all right. I'm just trying to get an idea of the dynamics as to what the dispute is. It just seems to be -- and the other question is, how does 'CAU and KYW and CBS and NBC deal with this?
Obviously, legally, we can't collude, I can't call them and ask, Hey, what was your deal? All I know is what I read in the papers, and what I read in the papers with NBC is that the people in this market came within three or four days of not seeing the extended Olympic coverage on CNBC and MSNBC because Comcast was the last major cable company to make a deal with NBC. What that tells me is that NBC had their own problems with Comcast. Now, channel 3's parent company is Viacom. It just so happens that Comcast is now in the process of buying a home team sports channel in Baltimore-Washington that Viacom happens to have an interest in. So there are all kinds of those business deals that we're not privy to. So when you ask how they do it, I don't know that. All I 278 10/31/00 PUBLIC PROPERTY, BILL 000452 know is that NBC came very close to not having a deal, you know, for the Olympics.
You spoke to one consequence that would come -- potentially exists if the arrangement or deal between you and Comcast does not materialize, and that is one option or one consequence that you would move to Channel 68. Are there any others?
Well, yes, and one of those is what we're doing right now: We're trying to speak out, we're trying to do everything we can within our ability to try and convince Comcast that Channel 6 is worth having on its system, that it's worth the same deal that other cable operators have given us in exchange for the use of the over-the-air stations. We're trying everything we can; that's what we've been doing for the last ten months. We have been granting -- understand, we have been saying, Take our product that includes very expensive programming -- Monday Night football, we're paying a billion dollars a year to 279 10/31/00 PUBLIC PROPERTY, BILL 000452 the NFL for the rights to Monday Night Football. Comcast is able to put that, through Channel 6, on their system and get money for it every day. I mean, how many people would have cable if you couldn't see Monday Night Football, Who Wants to be a Millionaire, Action News? I mean, how much is that worth? It's got to be something to him. If they can answer this question, how many people would be willing to pay their rates if Channel 6 weren't a part of the system? Do the math. I think that's where you come up with how much we're worth to them. Like I said, 65 cents, they're paying themselves $1 for Comcast SportsNet, they're charging other cable companies outside -- next to them in the market up to $1.50 for Comcast SportsNet. Forget these other channels. If they don't want to put the Disney Channel -- if they have a problem with that, if they don't like that arrangement, if there's problems between them and Disney, 65 cents a month, we don't even go back in arrears to January, start right now. That deal has been on the table in front of Comcast for more than a year, because they're the ones that asked for it. 280 10/31/00 PUBLIC PROPERTY, BILL 000452 So again, if you sense a level of frustration, you're absolutely correct. I would much rather be spending all of my time trying to do the best job possible running the television station that I know Philadelphia holds near and dear to its heart, as do I. That's where I've spent my last years. 9 I don't want to, frankly, be here. 10 I've never come and asked you for anything; we're 11 always in the giving mode, that's what we like to do, but this has been particularly frustrating, and I think it's because of their concentration of power in this particular market.
Okay, thank you. Any other questions? (No further questions.)
I will be uncharacteristically brief, very brief. You've put in a very long day. 281 10/31/00 PUBLIC PROPERTY, BILL 000452
My name is Lance Haver, I am a board member of CEPA, the Consumer Education and Protective Association, a 34-year-old grassroots consumer group founded by late Max Wiener. I am here today to urge City Council that instead of allowing RCN to wire the City and force homeowners to allow private corporations to place wires on their home, possibly damaging them without compensation, to instead control the price of cable TV by revoking Comcast Cable's franchise. The City should then use the right of eminent domain to take over the cable and lease it to a company or companies that would charge a fair rate and provide the promise public access. There is no question that Comcast is engaged in overcharging and price gouging. It has purposely been charging City residents higher rates than wealthy suburbanites. It may just be a coincidence that the higher rates fall on a population that contains a higher percentage of minorities or it may be a part of Comcast's 282 10/31/00 PUBLIC PROPERTY, BILL 000452 marketing plan. It's unfortunate the professor didn't study Comcast's own pricing policies. There should be no question in anyone's mind that Comcast has been guilty of price gouging and charging lower-income households higher prices. According to the October 15th Philadelphia Inquirer, Comcast charges the second highest rates in the nation for basic service. When the price of the Disney Channel is added, Comcast becomes the highest-priced cable TV service in the nation. In essence, Comcast has become an unregulated monopoly, free not to only charge City residents more than suburbanites, but free charge the highest rates in the country and' free to control content. How is allowed that when I turn my cable on, I am always turned to a Comcast station? How many channels will Comcast take over for itself, thus depriving me of the diverse programming that should come with the cable? How is Comcast able to hold consumers hostage by saying that if they don't like the terms, they refuse to carry Channel 6, which produces the most watched news shows in the region. 283 10/31/00 PUBLIC PROPERTY, BILL 000452 I heard the Comcast spokespeople say they're not a monopoly, but I'd like to read a direct quote from Mr. Roberts from the October 1997 Vanity Fair magazine. The question now -- quote, the question now is whether Roberts can capitalize on an apparent loophole in the 1996 Telecommunications Act in order to lock up the Philly area sports programming. Quote, we don't like to use the words "corner the market" because the government watches our behavior, unquote, Roberts said with a laugh. Quote, let's just say we've been able to do things before they were in vogue. And I also heard the spokesman say that Microsoft has a bigger share of the market, but as we all know, the federal government has called Microsoft an antitrust criminal. I know that the popular solution to an unregulated monopoly is to try and foster competition, but it is a false promise for capital-intensive industries like utilities. Look at the decontrol experiments in telecommunications, electricity, and natural gas. While long-distance service costs have gone down, 284 10/31/00 PUBLIC PROPERTY, BILL 000452 dial tone services have skyrocketed. The average consumer has seen their bill increase, while big users and multinational corporations have seen their bills shrink. Open the doors to competition in the electric industry without guaranteeing a ceiling price leads to skyrocketing price for consumers. In California, the price for electricity has doubled as a result of bringing in new companies. The same has been true with natural gas. One of the reasons that we face such unbelievably high rate increase is because natural gas has been deregulated, allowing companies to charge whatever they want. Time and time again, our government has fallen for the false belief that individual consumers have some ability to negotiate prices with giant corporations. This simply isn't true.
Can anyone on this committee imagine a family in Philadelphia calling any of the cable companies, negotiating an individual price for their family? Neither Comcast nor RCN would allow consumers to negotiate for fair prices. It is only by being organized through 285 10/31/00 PUBLIC PROPERTY, BILL 000452 our government which acts through regulations that consumers can have any chance to negotiate a fair price. That is why CEPA believes that the best action for consumers is for the City to revoke Comcast's franchise, take over the cable, and lease its provides will negotiate with the City to charge a fair and just price. Anything else will continue to allow corporations like Comcast to rip off the public. And I might say, RCN was unwilling to guarantee a lower price for consumers. In closing, let me also add my voice to those who are demanding that City Council force the cable TV and this administration to live up to the promise of public access. We were told that one of the benefits the people of Philadelphia would get in exchange for giving franchises to corporations is public access. That was over 15 years ago. It's time to honor the promise. Thank you.
Any questions for 286 10/31/00 PUBLIC PROPERTY, BILL 000452 Mr. Haver.
Thank you, Lance. The Chair now recognizes Mr. Ed Mooney. (Witnesses come forward.)
Good evening. Please identify yourself for the record.
My name is Edward Mooney, the Vice President of Local 13000, the Communications Workers of America.
Thank you, Mr. Chairman. Local 13000 represents over 7,000 workers employed in the communications industry in Pennsylvania, many of whom are employed within the City of Philadelphia. I want to thank you for the opportunity to appear today to explain our position concerning RCN, some of whose employees we represent. I believe it is important for you to understand the manner in which RCN has flouted our nation's labor laws. There is no better way for me to explain this than by briefly summarizing the 287 10/31/00 PUBLIC PROPERTY, BILL 000452 December 30, 1999 decision by the National Labor Relations Board Administrative Law Judge Benjamin Schlessinger. In his decision, Judge Schlessinger found that RCN engaged in wholesale violations of the National Labor Relations Act, beginning in September 1998, when an independent union, which then represented certain RCN employees in North Hampton, Pennsylvania, affiliated with the CWA. The result of that affiliation was to settle for -- can only be described as a campaign of terror in which RCN: Refused to recognize the CWA and has refused to bargain with Local 13000, even though the affiliation was lawful; That refused to have off-duty employees to have access to RCN property in order to prevent them from engaging in activity protected under Section 7 of the Act; That legally barred employees from speaking about Local 13000 while at work; That legally barred employees from wearing union insignias, and legally disciplined employees who wore union insignias or otherwise 288 10/31/00 PUBLIC PROPERTY, BILL 000452 insisted on exercising their lawful rights under the National Labor Relations Act to discuss union affairs; Unilaterally changed terms and conditions of the employment with regard to wages and hours and other terms and conditions of employment; And illegally prevented Local 13000 from communicating with employees through the use of union bulletinboards. I have the decision available for anyone who might want to read the contents in detail. And I must tell you that the text of the decision can not really and accurately convey the fear and the frustration our members who have had to suffer from RCN's refusal adhere to civilized forms of industrial relations behavior. An added problem, of course, is that this illegal conduct on the part of RCN began over two years ago. It took almost 15 months to get the judge's decision, and now RCN has appealed to the full board in Washington, DC. That appeal has been pending for very eight months and we are still awaiting the board's decision. While the 289 10/31/00 PUBLIC PROPERTY, BILL 000452 union is quite confident that the board will uphold the judge's decision, RCN may still appeal to board's opinion the United States Court of Appeals, which will only result in additional delays. Moreover, during this entire period, RCN has continued to act as if there is no union representing its employees, notwithstanding the very clear and direct findings by the judge. Further, RCN continues to violate the Act, making various changes without bargaining, harassing union members, and otherwise (unintelligible) its obligations. During this time period, RCN has attempted to insert itself into the Philadelphia communications and cable market, increasing its volume of business and, presumably, its earnings, at the same time that it has denied its employees the fundamental right enshrined in labor laws for over 60 years. I think you rally have to ask yourself whether you want such a company providing services to the citizens of Philadelphia. Any provider in the City must assure that its employees will offer 290 10/31/00 PUBLIC PROPERTY, BILL 000452 the highest level of service available. How can RCN provide such assurances, given the environment it has created?
Does anyone really believe that a workforce with low morale that results from the actions of a company such as RCN, a workforce without input into their jobs, a workforce with no ability to ensure that its members will share in RCN's prosperity will meet the needs of the citizens of Philadelphia. Can anyone seriously maintain that a company such as RCN, which is in such labor turmoil, is going to meet its obligations in a competent, effective, and timely manner? Of course not. We know it, you know it, and so do the citizens of Philadelphia. Local 13000 strongly believes that you have the ability to ensure that Philadelphians are not afflicted by a company whose service will inevitably be affected by its refusal to recognize its legal obligations. We hope you'll exercise that ability. Thank you.
Thank you very much for your testimony. Thank you for coming in. 291 10/31/00 PUBLIC PROPERTY, BILL 000452 Are there any questions? (No questions.)
Thank you. Dina Mendros, please. (Witness comes forward.)
Good evening. Please identify yourself for the record.
Okay, thank you. My name is Dina Mendros. I'm here representing Citizens for Consumer Justice, which is Pennsylvania's largest consumer rights organization. In the over three years that we've been in existence, we've worked on many issues important to Pennsylvanians generally and Philadelphians specifically. Some of CCJ's accomplishments include spearheading the 1998 Patients Not Profits Coalitions Campaign to preserve charitable assets and community-accountable health care throughout the demise, bankruptcy and sale of the Allegheny Health System in southeastern Pennsylvania. We testified on numerous issues affecting consumer rights on the state level. In addition, we are working to preserve social and health security through passage of a real patient's bill of 292 10/31/00 PUBLIC PROPERTY, BILL 000452 rights, to add a prescription drug benefit to Medicare, for campaign finance report, and many other issues. So much of our work at CCJ depends on getting our message out. We would not have been nearly as effective in our work if we had not been successful in attracting the attention of the news media. In order to get information to people in today's fragmented society, access to mediums of mass communication is paramount. Recognition of this is just one of the many reasons CCJ has joined the fight for public access cable television. CCJ has been involved in the fight to get public access cable television for the residents of Philadelphia for several years. In this information age, citizens must have access to the airwaves, and not just as consumers, but also as producers. The main purpose of our work at CCJ is to work for the rights of citizens and ensure that their voices are heard. The voices of citizens hold real political power. One reason that public access is so important is that through this medium, people will not only be able to speak out, 293 10/31/00 PUBLIC PROPERTY, BILL 000452 there will also be a distribution system in place that will allow these voices to be heard. We are here today to address the issue of new cable company, RCN Corporation, which is seeking approval of their franchise agreement or their OVS agreement with the City. As reported in a recent Inquirer article dated October 15, 2000, Philadelphians currently pay among the highest cable rates in the nation. This, despite Comcast, currently the major cable subscriber or supplier for the City calling Philadelphia their corporate home. I guess the home court advantage is very beneficial to their corporate interests; it certainly isn't benefitting the interests of City residents. We hope that if another cable company is allowed to do business in Philadelphia, the rates, as well as other aspects of service, will prove to be more advantageous to residents. Whatever action City Council takes on this very important issue, the City must hold any cable company doing business in Philadelphia, those already in place and those that may come, to their agreements in providing public access. I know that publicly Comcast states that they are 294 10/31/00 PUBLIC PROPERTY, BILL 000452 willing to meet they are obligations to the City regarding public access, the City only need ask. And I'm certainly not taking the City off the hook in that failure to move on this issue. But behind closed doors, I understand that Comcast previously provided a video to City officials that portrayed only negative public access programming. This type of programming is negligible compared to the total amount of programming that public access stations around the country provide. Each year public access stations produce more programming than the programming of all major networks combined. This public-private difference is not (unintelligible) the quality of Comcast. I know that public access (unintelligible) is not the main topic of this hearing but I use this opportunity to address this issue because City Council refuses to deal with this issue head-on.
In a previous public hearing on the issue, when over 100 community members came and voiced their support of public access, few members of the Council attended, the press virtually ignored us. In comparing that hearing 295 10/31/00 PUBLIC PROPERTY, BILL 000452 to this, it's not surprising, but it certainly is disheartening to see how solicitous City officials are to corporate interests, and by contrast, how disrespectful they are to community interests. In closing, the citizens have been much too patient in their wait for public access. Citizens for Consumer Justice stands in alliance with the Philadelphia Community Access Coalition, who will be speaking shortly, in calling for the City to do the right thing, follow their own ordinance, and provide public access television for the citizens of the community. CCJ will be watching and will hold the City accountable if they fail to do so.
Thank you for your testimony. Just one issue, are you in favor or opposed to the granting of this? I mean, I understand your concerns over public access, but you weren't clear on whether or not you support or oppose the pending legislation?
I will support the City in making a decision, but whatever way they 296 10/31/00 PUBLIC PROPERTY, BILL 000452 choose, I want them to make them accountable for public access.
Okay, thank you. Reverend Shine, please. (Witness comes forward.).
I appreciate your patience. I know it's been a long evening. Nice to see you.
Mr. Chairman, I feel like an ancient prophet, especially the one who was a frequent visitor before the pharaohs of Egypt, always saying, "Let my people go." (Laughter.)
I'm so frequent here at this chamber that I want to express my thanks for the opportunity to come. Mr. Chairman, right from the start, let me say that when we learned of this hearing today, it was the attitude of the leadership of the Black Clergy of Philadelphia and Vicinity to be in support of the position that Comcast takes. Now, why? I want to preface my rationale with why the clergy of this city asked me to come. As you 297 10/31/00 PUBLIC PROPERTY, BILL 000452 may be aware, that a few years ago, an organization was formed. It was called the African-American Association for Corporate Responsibility. ), the CEO and president of Texaco, who refused to let my peel go. It was our organization and my vice president, Barry Ellen Roberts, who was the lead plaintiff in that case, and you saw the outcome, the world saw the outcome. And as a result of that, we believe that our mission was very formidable, to be sure that the interest and concerns and the needs of African-Americans in the marketplace in the corporate America should be addressed with equity and parity. " PACRI is the Philadelphia Association of Catholic Religion Investors. And as a board member of that, we combine our interest with ICCR. ICCR is the Interfaith Center for 298 10/31/00 PUBLIC PROPERTY, BILL 000452 Corporate Responsibility. Globally, we have shareholders and about $185 billion in stock around the globe. It was our organization, the AACR, the African-American Association for Corporate Responsibility, that was at the forefront of divesting in South Africa. So we do not come before this body lightly, nor do we take issue with RCN lightly, but we do give our wholehearted support for what Comcast is about in its social responsibility, as we heard in their statement today. In regards to the role of this pending legislation, I'm going to ask, on behalf of the -- in Philadelphia, where we represent -- Black Clergy of Philadelphia and Vicinity, we represent more than 250,000 members of our churches. Consequently, we are TV viewers, a significant part. When I heard testimony given earlier about the various charts, most of that language was far and above what I could even understand, admittedly so. " In that case then, there were selected areas by which would be serviced over three to four to five years. Then the -- if at all, the areas that are best served in the more concentrated or high density areas like North Central and West Philadelphia, Kensington and Fishtown and et cetera. Now, I happen to live somewhere near -- close to the greater Northeast, and my church is this in West Oak Lane, so I'm familiar with the service that's being provided. And let me further state that if there were other mediums, and I listened to the person from -- the gentleman from Channel 6. In competition, which this is about, well then, just line up your business, use the business sense, and be more competitive and get on the cutting edge. If this organization has come to be on the cutting edge and they have a certain interest in serving the communities, then, by all means, do it. My concern is that those who are least served, or under-served, would be better served. Economically, not far from what I've heard, being in this chamber, RCN would 300 10/31/00 PUBLIC PROPERTY, BILL 000452 economically leave some out, educationally block some out, and some will be socially falling out, because they will not be able to benefit at the outset of what might occur until this legislation be enacted. Philadelphia is known to be fair and equitable and parity. That's our goal, that's our mission. If we then allow such legislation as this, what potentially would occur is exactly what I said, that there will be those that will in the first three to four to five years be economically left out. There will be those that will be educationally left out. There was conversation here about the OVS, open vision -- or open video systems.
Well, our position that we would take is that there would be those that, if RCN has its way and our organization, the AACR, was to be in touch with them, to sit down with their CEO about their interests, we would move very aggressively to be assured that what could really take place that would benefit all people, not just some who would make it more lucrative for others in the selected area, where a chosen market has been identified by 301 10/31/00 PUBLIC PROPERTY, BILL 000452 those presenters. That is a hand-picked market and it's obvious as to the reason why. To cultivate this kind of a market means that you strategize, and we certainly will strategize about what our role would be. We hear people talk about minorities and about other interests citizens' interests. Well, I'm here to represent the African-American interests, and I am satisfied with the service that's been provided and will continue -- I believe I stand on behalf of our organization, the Black Clergy of Philadelphia and Vicinity, when I say to you that the faster billings and the issue that we heard, the -- how they will impact immediately. If there's construction to occur, if there's employment to be gained, if there's a way by which we could be a included in the economic stability of our city, and all of us together, then I think that's the duty and the responsibility of the City Council, to be sure that whatever takes place in this city benefits the citizenry, not some selected area, some selected group, but all of the peoples. Has RCN before you demonstrated or 302 10/31/00 PUBLIC PROPERTY, BILL 000452 given you any plan or strategy whereby the social responsibility of R -- I don't even know what RCN means. Is that an acronym or something? What does RCN stand for? But I know what Comcast is, but I don't know RCN. So if we knew what we were dealing with -- have they done any marketing in the African-American community to discover what would be some essential ingredients and needs there? Have they made some overtures? I listened again to what Comcast has said here. So what does all of this mean if all the people's interests of this city are not going to be taken into consideration. It is about time in the 21st century that the interests of corporate America be more inclusive, more equitably distributed across the whole line, not just for the profit margin of some who could benefit the most, but rather, we enjoy competition, be glad to welcome it. Only if it's going to be equitable and there's parity for everyone. If that's not the intent or the interest that is included in what is presented by RCN, then, by all means, they will hear from us directly, and we will face them directly on this 303 10/31/00 PUBLIC PROPERTY, BILL 000452 issue. Comcast has made its presence felt and known. We enjoy the relationship in our community as a result of it. It has done what it could and is doing more, and I believe will do more. So with all of the other things that you must deal with and consider, then you must also know that we as a part of the community are being represented here to say that our concern is that RCN, that this legislation that will allow for them certainly in the form that perhaps that it is before you, that it must be again revised, or it must be dealt with in a more scrutinizing way, or it must be not be allowed to be passed through this body. Unless and until that can happen, then our support will be maintained as I have already stated that it will be. Thank you, Mr. Chairman.
Good evening, 304 10/31/00 PUBLIC PROPERTY, BILL 000452 Reverend Shine. You covered a number of points. The Chair of our committee in committee in his opening comments was very eloquent in saying and agreeing with you that Comcast has an admirable track record with regards to corporate responsibility. What I also heard Comcast say, however, was that their bottom line is that there be a level playing field. If there is a level playing field, then they welcome choice.
Given that potential, hoped-for scenario, what would be the position of the Black Clergy?
Then we would ask that a -- I already stated, that the social responsibility that we have enjoyed and that Comcast has already laid out before you, that let's see a comparable -- because when you say "a level playing field," then it must of necessity include the same kind of social responsibility that Comcast or (unintelligible).
That will benefit all people and just not be for those that can better 305 10/31/00 PUBLIC PROPERTY, BILL 000452 afford it, such as in the Greater Northeast, as some of those charts indicated. But let's have a level playing field and not just a level playing field for competition's sake, but a level playing field for social responsibility's sake, as well as for the entire citizenry of Philadelphia.
It does, it does. I have follow-up a long, but we still have witnesses to go, so we'll follow up for sure at another hour.
Would you please identify yourself for the record and proceed.
Yes. Mr. Chairman and members of the committee, my name is Will Daniel, and I'm the owner of Wilco Electronic Systems and Wilco Service Inc. My company also provides cable 306 10/31/00 PUBLIC PROPERTY, BILL 000452 installation services for Comcast. We've had a contract for Comcast since they received the first franchise back in 1986. We are a certified minority business enterprise. By hiring Wilco electronics under the MBE program, Comcast has helped to create over 300 jobs in the City. My company also provides wireless cable services to a number of apartment complexes in the City, including the Philadelphia Housing Authority. We provide the service to over 500 household. I'm here to share with you several concerns that I have with the plans that RCN Corporation has put before you to build a so-called open video system. First and foremost, I'm very concerned that RCN goes for hiring local and minority business will fall far short of what Comcast agreed to do. I understand that RCN only will agree to the goals that are less than half, and in some cases, a low little less than 20 percent of what Comcast agreed to under their cable franchise agreement with the City. I also understand that RCN's current plans would establish local and minority business 307 10/31/00 PUBLIC PROPERTY, BILL 000452 goals for only two years, unlike Comcast's commitment, which runs a full years. 4 This is a positive thing for the City. 5 If someone wants to come and use the City's 6 available right-of-ways to make a huge profit, 7 they need to give something back. Comcast has 8 agreed to create community jobs and has made 9 community investments. I think it's only fair to 10 ask RCN to at least step up to the same 11 commitments that Comcast has made and not try to 12 get away cheap. 13 My second concern comes from what I 14 know about RCN's business practices. When they 15 come into the cities, the first thing they do is go to the apartment buildings and the condominiums. They try to grab low-hanging fruit. My company currently provides cables television services to a lot of these multi-unit buildings. If RCN is allowed to come in and cherry-pick and instead of taking only the fair obligation of (unintelligible) parts of the community, it would hurt me directly, and it won't help hundreds of thousands of Philadelphians who live in rowhouses and single-unit family units. 308 10/31/00 PUBLIC PROPERTY, BILL 000452 Mr. Chairman, if RCN is allowed to provide the service in Philadelphia, I think you need to ask them to behave like they are a part of the City and not simply allow them to skim off profits and ship them home to New Jersey. I urge you to hold RCN to the same cable franchise requirements as Comcast to make sure that RCN will give Philadelphia as much as they take away. I thank you.
Gretchen Clausing and Inja Coates, please. (Witnesses come forward.)
Good evening. Please identify yourself for the record.
Good evening. Gretchen Clausing, C-L-A-U-S-I-N-G. Actually, trick or treat.
I'm going to blame you for all of the bowls of candy that I have at home; I really don't need them. 309 10/31/00 PUBLIC PROPERTY, BILL 000452 But, anyway, I want to thank you, Councilman Kenney, and the committee members for giving me this opportunity to address you this evening. I am a member of the Philadelphia Community Access Coalition. We're a grassroots coalition of individuals and organizations concerned, very concerned, about the lack of community media in Philadelphia, notably public access television. And we've been lobbying to get public access television stations and community access centers activated and running in Philadelphia, as promised in the original cable franchise agreements dating back over years. 15 Our members represent a broad spectrum 16 of interests, including civic groups, business and technology, arts and cultural institutions, labor unions, religious organizations, and health care, peace and community and media activists. At this point, we have well over a hundred organizations that have joined our coalition along with countless individuals. And I would just like to remind you, as Dina did, about that wonderful day in June of 1999, when we had over well over hundreds of 310 10/31/00 PUBLIC PROPERTY, BILL 000452 people in here testifying here in on behalf of their desire to have public access. Well, since then, we've grown, and we are continuing to grow. We become more informed, more active, and more impatient. I see this really today as a watershed moment. It's been a very interesting time in these past couple years as all these franchise agreements have come up for renegotiation, and we continue to make these efforts to carve out public space, and I'm really tired of hearing about the attention being paid to always the corporate interests and not the interests of the citizens themselves. And I really want to urge you all to take this opportunity to really kind of, again, put ourselves in a place where we can actually seize the opportunities of these new technologies and put Philadelphia in the forefront of the community medium movement in this country. We are really at, as I said, a watershed moment. So on that, I would like to remind members of Council and cable representatives and members of the press that public access remains an incredibly important issue to the citizens of 311 10/31/00 PUBLIC PROPERTY, BILL 000452 Philadelphia. This system could utilize, as I said, the converging digital technologies to provide a vibrant community-produced media system, including computer training, desk-top publishing, Internet access, Web site design, computer animation, community radio and video production. And what I am really here to say today is that RCN shares this vision with us, and I'm very pleased that they're sort of willing and ready to work with us in making this happen here in Philadelphia. And I am very pleased to have seen them go on record today in support of public access television and our efforts in this area. They understand that Philadelphians are more than just consumers, but can be active participants in creating exciting television integrated with the other new media that has the power to communicate ideas and provide Philadelphians with unprecedented opportunities to learn from one another. They're directness and candor has been refreshing and very different from the lip service that we have received from the incumbents as, they've been referred to today. However, I would also take this 312 10/31/00 PUBLIC PROPERTY, BILL 000452 opportunity to point out that the proposed OVS agreement, Appendix D, , where it is noted that RCN will create an escrow fund for the purpose of supporting the citywide government access facility. I contend that if they do this for the government, they should do it for the public as well and create an escrow fund for the public access cable stations.
In closing, I just really want to say that a community without public access is a community sorely disadvantaged. Along with being commercial-free, public access is the one place where images rarely seen in the mainstream media can be seen, images such as older people, people of color, people with disabilities, people with accents or those who speak another language, those who are less attractive, respectful teenagers, good cops, and images that I can't even imagine that represent the rich fabric that is our City of Philadelphia. I also want to just again say that the true benefits of public access are beyond just what you can see on television, once those stations would be established, but they could 313 10/31/00 PUBLIC PROPERTY, BILL 000452 assist after-school programs, teach teens about the Web, televise town meetings, link block captains and community groups, assist social service agencies, and even provide free air time to local officials and candidates running for office. So to make it simple, 'cause I think it's sometimes such an abstract and dense topic, so to cut through all this rhetoric, I'd like to sort of imagine situation, but a cable in a city for years have been really selling us a really 13 expensive car. And when I was 16 years old, and 14 we want the keys and we want to be able to drive 15 that car and we want to be able to not only drive 16 that car, but then learn how to build our own car. So with that, thank you.
Thank you very much. Could you identify yourself and proceed.
It says "good afternoon," but I guess it's now "good evening," Chairman Kenney and members of the committee. My name is Inja Coates, I-N-J-A, C-O-A-T-E-S and I'm 314 10/31/00 PUBLIC PROPERTY, BILL 000452 addressing you today as member of the Philadelphia Community Access Coalition. As was probably already stated. Our coalition represents close to 100 of Philadelphia's notable arts and cultural institutions, science and technology organizations, community groups, educators, churches, concerned citizens, and many other interested parties who believe in the power of public access to share information, provide technology training, spur creativity, and empower our neighborhoods. And I just want to take a moment to state my agreement with Reverend Shine that we do strongly believe that we would like to see the corporate powers be more inclusive and that services should be rendered fairly. However, with all due respect, I don't believe that he speaks for the entire Black Clergy. In fact, our coalition has met with numerous members of the faith community who see the value of public access and strongly desire the ability to connect with their congregations through television, and they also recognize the opportunities that it 315 10/31/00 PUBLIC PROPERTY, BILL 000452 represents to the young people and many other people in our community. And some of those people are here today and some of them had to leave, and so I just wanted to clarify that point. Anyway, let me continue. I am pleased to speak to you today about Comcast. Comcast was once a small family-run company that began right here in Philadelphia. Now they are one of the largest cable providers in the country and they claim to be a good corporate citizen. It's interesting how businesses can claim citizen status, while real citizens are thought of as only consumers. For the sake of argument, though, let's continue that line of personification for a moment. A company's corporate culture can be thought of as its personality, and let's take a look at Comcast's personality. They have typically charged as much as they possibly can for the least available service. They may call it "good business" or "being competitive," but it has generated so many complaints against them from municipalities and customers that the FCC was forced to issue a social contract to Comcast, 316 10/31/00 PUBLIC PROPERTY, BILL 000452 taking them to task for price gouging. And this was over many years. Many of the things that they came in promising in their refranchising were things that they were compelled to do by the FCC, and it was not out of the goodness of their hearts. Our organization had heard from people in other cities where Comcast has recently taken over, shocked at the way they have come in and bullied their way around. And they're asking us just, you know, a community advocacy group, What is up with Comcast? It would seem that Comcast's personality is a bit of a thug. When you look at why there's no public access in Philadelphia, look at the fact that Comcast has shut down existing community access facilities in many other places where they do business. Look at the fact that they've provided an anti-public access tape to the Rendell Administration for a presentation that you and Councilman Rizzo called an attempt at brainwashing. " They claim to be good corporate citizens but it seems their corporate culture is one that does not care about the communities in which they operate. It's hard to imagine that Philadelphia would be any worse off with RCN. Comcast claims that RCN represents unfair competition, and yet, they call it fair to monopolize the local sports broadcasts. If this situation were reversed and it was Comcast making a bid to enter this market, it is unlikely that they would be doing anything that RCN hasn't done to make it more fair. As one of the representatives from Comcast said, what's fair to us and what's fair to Disney are two different things.
It's interesting when you talk about fair. What -- we are concerned about the union issues that were raised. We trust that those issues would be resolved if RCN were, in fact, going to do business here. And we believe that Philadelphians deserve a choice as consumers and as citizens. We believe that RCN should be 318 10/31/00 PUBLIC PROPERTY, BILL 000452 permitted to build in Philadelphia, with the hope that they can raise the bar for cable operators in this town and set a new standard as corporate citizens as well. While we realize that what's at stake here is essentially about money, and lots of money, we believe that as RCN develops in Philadelphia, they will recognize that good business includes good community relations in a way that Comcast has not. So that's -- thank you. Well, I had other points I was going to make that were in response to things that were said but, uh. .
Thank you very much. Are there any questions for these witnesses? (No questions.)
Mr. Richard O'Malley, please. Is Mr. O'Malley here? (Witness comes forward.)
Good evening. Please identify yourself for the record.
Good evening, Chairman 319 10/31/00 PUBLIC PROPERTY, BILL 000452 Kenney and Councilmembers. My name is Kevin Murphy. I apologize on behalf of Richard O'Malley; he had to leave.
He asked that his letter be read so that it could be entered into the record.
Thank you for this opportunity to express the concern of the Wynnefield Residents Association about the lack of public access TV in the neighborhoods of the City of Philadelphia. Like other community organizations, the Wynnefield Residents Association does not have the financial resources to communicate directly or effectively with those who live in its neighborhood. Public access TV would greatly facilitate its mission of helping to provide better services to its residents such as 320 10/31/00 PUBLIC PROPERTY, BILL 000452 in the enforcement of the City's zoning code. In addition, our youth would be able to take advantage of the job training opportunities now being offered on public access in other major cities of our country. In 1983, City Council passed an ordinance creating four cable TV districts in the City. The reasons for four districts were: First, to guarantee competition; and, second, to ensure that at least one district would be minority-owned. By "competition," they apparently meant that the rates and services of the four companies could be compared to make sure that a district was not charging its customers excessive rates, providing inferior reception, or inadequate programming. The City, in the 1983 ordinance, stipulated that the four companies would provide public access TV to the communities within their districts. What does public access TV mean? The cable companies would provide the means, studios, personnel, and technology for the televising of community meetings, school plays, et cetera, targeted to the residents in the neighborhoods. 321 10/31/00 PUBLIC PROPERTY, BILL 000452 The same ordinance provided the resources to implement public access by requiring that the cable companies pay the City an annual fee of 5 percent of their income, which fee the companies, of course, the companies passed along to their customers. In light of the above promises, what have the residents of the City received? Instead of four companies, we have only two, and a minority control of one of the companies has been off and on. And Philadelphia remains one of the last major cities not to have public access TV. Why do we not get public access? , first the money intended for public access went into the City's general operating budget and by the time the cable layout was completed in the early '90, the City was virtually bankrupt and used the cable fees to help pay its operating expenses. Finally, the Mayor and the President of City Council never established the nonprofit corporation stipulated in the 1938 ordinance to administer public access TV. The time for public access is now. The City today has a surplus. Moreover, when the 322 10/31/00 PUBLIC PROPERTY, BILL 000452 cable licenses were renewed last year, the new ordinances once again stipulated a provision for public access. Hopefully, any new ordinance 5 allowing greater competition among the cable companies will likewise call for public access. The City and its neighborhoods need it more than ever. The time to act to establish the nonprofit public access corporation is now. Signed, Richard F. O'Malley.