Bravo to Mayor Jim Gray and a unanimous Urban County Council for taking on Time Warner Cable. It’s about time somebody stood up to the giant cable television and Internet companies and their frustrating game of monopoly.
For far too long, the cable industry has abused the local franchise system across America to provide mediocre service at ever-increasing prices.
Meanwhile, cities have become pawns in the industry’s merger-and-acquisition game, which has left fewer companies owning more of the nation’s critical broadband infrastructure.
The Urban County Council last Thursday gave first reading to resolutions that would deny transfer of ownership of the local cable system as part of the industry’s latest deal, which would split Time Warner’s assets between Comcast and Charter Communications in a $45 billion stock swap. The systems in Lexington, Louisville and Cincinnati would go to Charter.
Gray’s re-election campaign also is tapping into public anger at Time Warner. The campaign is urging voters to sign a petition demanding that the company “improve customer service, deliver better speeds and give us what we pay for.”
Few cities have taken as aggressive a stand as Lexington has. Not that others aren’t concerned.
The Federal Communications Commission and the U.S. Justice Department are both reviewing the deal proposed by Comcast, Time Warner and Charter, which are, respectively, the nation’s first, second and fourth-largest cable operators. Dozens of consumer advocacy groups have spoken out against it.
It’s hard to say how all of this will end. But here is how we got to this point:
Time Warner bought Insight Communications in 2012, but never negotiated a new franchise agreement with the city. It also has ignored some consumer-protection provisions of Insight’s franchise agreement, which the city has never enforced.
Since the acquisition, Time Warner has invested little in Lexington’s infrastructure while steadily raising prices. The company’s cost-cutting measures have hurt customer service, and public frustration has been rising. City officials say they have been flooded with citizens’ complaints about cable service and pricing.
Time Warner officials claim they have improved service, and their own surveys show high rankings for customer satisfaction. Yea, right. A J.D. Power & Associates’ survey last month of residential television service providers in the South ranked Time Warner dead last. (Comcast was second-to-last.)
Lexington officials say they are not seeking any new consumer protections in the franchise agreement negotiations — they just want to preserve the things Insight agreed to. Those include staffing the company’s customer service center beyond normal business hours, so customers with day jobs can actually get there.
The city also wants to preserve some way of holding the cable company financially accountable for service problems short of canceling the franchise agreement. Currently, the city can fine Time Warner $100 a day — although officials say that has never actually happened.
Time Warner has not been willing to agree to those modest terms, nor does it want to continue paying for the public-access television studio. It’s all pretty small potatoes, considering that Time Warner’s Lexington revenues probably exceed $100 million a year and the company has made little investment in its system.
If Time Warner and Lexington officials are unable to reach agreement by Oct. 23, when the council could take a final vote on the ownership transfer resolutions, it is unclear what will happen. Mostly likely, the issue would end up in federal court.
Time Warner, Comcast and Charter have deep pockets, but Lexington officials should not back down. Citizens these days need more protection from corporate abuse, not less.
More importantly, city officials need to make sure whatever agreements they reach leave the door open for more competition. With only two major Internet providers — Time Warner and Windstream — Lexington needs more broadband competition.
Cities such as Chattanooga, which are lucky enough to have municipally owned utilities, have invested public dollars in creating high-speed fiber-optic networks. Those networks are attracting entrepreneurs who are creating the high-tech jobs of the future. Unfortunately, that’s not a practical option in Lexington, whose existing utility infrastructure is privately owned.
Lexington officials must embrace creative approaches for seeking private investment in new fiber-optic networks, such as Gray’s proposed Gigabit City initiative. And they must stand firm in trying to hold accountable the revolving door of local cable and telephone monopolies.