Councilman Turner wants the council to hear from you regarding cable television. The city’s franchise agreement with Insight is ending next year, and Turner thinks Insight’s service leaves something to be desired. Several other council members chimed in with concerns about everything from high prices to service responsiveness. So, the motion to hire an attorney to negotiate a new franchise agreement was amended: in addition to hiring the attorney, the council will hold neighborhood meetings to find out how the public feels about their cable service.
Councilman Morris brought up a good point, too — technology has changed dramatically in the past twenty years, and technological change isn’t getting any slower, so we probably shouldn’t renew for twenty more years. In fact, Randy Ray has already indicated he’s hoping for a shorter term. Morris also pointed out that Insight doesn’t just offer cable TV anymore, but also internet access and even phone service in some communities. How will a new franchise agreement affect these additional services, if at all?
Also, we know what the city wants to get out of a new agreement, but what does Insight want? I’m going to go out on a limb (ha ha) and guess a lower franchise fee. The city used to collect 10% of their (then GE Cablevision’s) adjusted gross revenue until the FCC decreed in April 1981 that franchise authorities couldn’t collect more than 5%. The franchise fee now is still 5% of Insight’s adjusted gross revenue, payable monthly. Back in 1986, they (UA Cablesystems at that time) tried to get Peoria County to agree to a 3% rate, but the County told them if they wouldn’t give them the same 5% they gave the city, they could remove their equipment and get the heck out of town. So UA backed down and passed the higher cost on to the subscribers.
My guess is they will argue that they face increased competition from satellite providers like Dish Network who don’t have to pay local fees, and need to have the franchise fee lowered so they can keep their prices competitive. I expect they’ll ask for 3% or less.
I’ll look forward to hearing the public input. What’s important to you? How do you feel about Insight’s service? What do you think needs to be included in the next franchise agreement?
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And now for a little history, for those who might be interested:
Peoria has only negotiated two cable franchise agreements. The first one was awarded in 1966 to General Electric (GE) Cablevision for twenty years. At that time, cable television was a hotly debated topic locally and nationally. Broadcast stations didn’t like it, worrying that bringing in stations from other cities would draw viewers away and hurt their ad revenue. The FCC muddled through all kinds of different regulations, worried that pay TV would “siphon off all the good programming from free TV.” Thus, even though the franchise was awarded in 1966, GE didn’t start offering cable television until 1972 because, until then, the FCC prohibited cable companies from piping in channels from other cities (e.g., Chicago). GE figured people wouldn’t pay for exactly the same stations they can get for free over the air, so they waited until they could offer extra channels like WGN.
The franchise agreement was transferred from GE to UA Cablesystems. They renewed in 1986 — that’s the second and last franchise agreement Peoria negotiated. I got a copy of it through a Freedom of Information Act request, and I converted it to digital form — as long as you have Adobe Acrobat Reader ver. 5.0 or greater, you can read it here. What do you think? Are they living up to their agreement?
The agreement is somewhat entertaining to me, just because of how much times have changed since 1986. Consider, for instance, what you remember about 1986. I was a sophomore in high school then, and not many people had personal computers compared to today. It was the year of the Challenger disaster, as well as the Chernobyl nuclear disaster. Reagan was president. We were watching Ferris Bueler’s Day Off and Family Ties while listening to Take On Me by A-ha on KZ-93. The cable franchise agreement looks like it was typed up on a typewriter instead of a computer (it probably was). At that time, the city wanted the cable system to have a capacity of a whopping thirty channels initially — and they wrote in the agreement that they wanted it upgraded to 52 channels after ten years.
In September 1986, UA Cablesystems was bought out by Tele-Communications, Inc. (TCI). It was TCI Cable for about twelve years. Then in October 1998, TCI merged with AT&T Consumer Services (ACS). But, it wasn’t long before the franchise was transferred to Insight (December 2000). Insight is now the ninth largest cable operation in the U.S., with 1.3 million subscribers in Illinois, Indiana, Kentucky, and Ohio. They brought in over $269 million in the first quarter of 2005. Their home office is in New York.
So they have ample capital for waging war on franchise agreements. Galesburg also uses Insight for their cable provider. If this article from The Zephyr is at all accurate in describing their negotiations (I have no way of verifying it, so I can’t vouch for it), then Randy Ray and his new cable attorney better be on their toes whenever the contract comes back from New York with revisions.
Are we going to be able to get more HDTV channels from this?
I want to see more foreign channels. There are no good channels to watch a decent amount of soccer on. Need Spanish channels, BBC, a couple german and french ones, throw in an Indian channel or two for the south asians, heck even put Al Jazeera on so we can at least see what they are seeing. In Europe you can get every network on under the sun, here… hardly.
Anonymous– Get satellite if you want foreign channels. I don’t even like bringing up foreign web pages, much less channel surfing through gibberish…
Satellite service in the U.S. is pretty much like cable… crap.
The city could try to negotiate for more carriage of HDTV channels.
To the last anonymous person: why do feel that cable and satellite service is “crap”? What’s wrong the service (high prices, poor customer service, poor channel selection, something else)? What would you like to see instead?
HDTV service is supposed to be mandatory by Jan 2007, at which time all analogue broadcasts are supposed to cease. This may or may not happen as some networks and cable companies are dragging their heals and pleading that they need more time. So the fed may relent and allow analogue to persist a little longer. Have faith in HDTV being expanded. Yes.. everyone will be buying an HDTV of some sort in the next couple years.
In the U.S. satellite is ran like a cable company. You are limited to two companies at that (a third went brankrupt recently). They offer a all the big ‘national’ spanish channels. One satellite company offers a smattering of other channels at scandelous prices.
In the rest of the world, for the most part, satellite is more akin to putting up an antennae. You point it to satellite A and you got dozens upon dozens of channels you can watch.. for FREE. Point to satellite B the selection may vary but the same thing. No subscriptions, no hardware limitations. Hardware is generic. A few channels like HBO require a subscription but the cost is less than here. If you ever wondered how CNN and Al Jazeera have made such a broad impact in the 3rd world.. this is why. CNN, Al Jazeera and many more are just free. Get dish, point, receive, enjoy.
Much of europe can watch a good many of our channels (for free).. how come we can’t watch theirs?
You can do that in America too…buy yourself one of those old, big C-Band/Ku-Band dishes. You can point at the various satellites and channels from all over the world if you know what your doing…
Those satellites were popular in the early 90’s, but the dishes were huge and took up a good portion of your backyard…live in an apartment? No way you could put one of them on your deck.
The deadline for HDTV was pushed back again until 2009. I really don’t see it ever happening.