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Subject:  Municiple Regulation Date:  1/29/1999  2:37 PM
Author:  LuxSit Number:  3900 of 55215

Municipal Regulation! Sorry after you preview a post you can't edit the Subject

I see this city by city franchise agreement as a troubling issue. It would be nice to see the franchise agreement summary for the major markets and when they are up for renewal.

If I have this straight, the cable company owns the plant. They City gives them a franchise to operate the plant. The owners of the cable plant, without the franchise, would not have to give up their plant. They own the infrastructure. Would they have to share the plant? Would the competing company have to install a new plant?

It appears to me that if a City tried to remove a franchisee from operating the plant that the franchisee bought, installed and owns, that we are going to see a court battle. The City had better be ready to show that the Cable company violated the franchise agreement. They better have a pile of cash to go after the likes of AT&T/TCI/ATHM because I don't think they will roll over and play dead.

I predict that if the City of Seattle tries to pull the plug on TCI that they will be headed down the long and costly road of litigation. It is clear to me that the City of Seattle does not have the resources for this type of battle. I think that these franchise agreements may not even be legal under Federal law. So for the Cities to take on TCI because they are behind in the schedule installing or upgrading their plant is foolhardy indeed. When was the last time a City project was done on time and under budget?

As for the situation in Tacoma, I don't think we have the whole story. Ask yourself this: Why did the Cable companies leave the door open to the City owned Cable Franchise? Answer: The plant must not have been profitable. There can be no other reason for it. I know that in the City of Seattle there where many neighbor hoods that the cable comanies did not want to wire. Why? Because they where low income areas where the payoff of the plant would take longer than the lifetime of the plant. In otherwords there was no money in it.

The advent of cable internet has probably changed the economics here. None the less the cable comapnies resisted installing low income areas for economic reasons. Many of the people would not be able to afford the service, and worse the cost of hooking people up and disconecting them for lack of payment can take the profit out real fast.

I'll extrapolate my knowledge of what happened in Seattle to Tacoma. Tacoma has a lot of low income areas. This is changing, but Tacoma has sprung up from a paper mill town working class poor city. There are large parts of Tacoma that you can't walk around in at night. The City is poor. I would be willing to wager that this is the reason that Tacoma was left behind by the Cable comapnies.

What company would walk away from an easy dollar?

All of this is my humble opinion, and some of it is lacking detail and hard facts. I do live in the region and have for more than 35 years, and I briefly worked for a microwave cable tv comany in Seattle that served those areas that the hard wire Cable companies did not want.

Sorry for the ramblins,
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