CAN-TV in financial trouble, city to determine station's future (May 26, 2004)

Posted by Mitchell - May 26, 2006 (entry 444)

by Anna Gorski

5/26/2004

BY ANNA CHRISTINE GORSKI

MEDILL NEWS SERVICE

CANTV

Several Chicago aldermen hope to save the city's cable access television station by using city funds to support it.

An ordinance that would provide Chicago Access Network Television -- better known as CAN-TV -- with $2 million is pending before the City Council's finance committee. The money would come from the fees that Chicago cable franchisees are required to pay the city.

CAN-TV is currently funded directly by the three city cable franchisees. But when one cable provider, RCN, filed for bankruptcy earlier this year, it put CAN-TV's future in jeopardy. If the proposed ordinance is passed, it would secure CAN-TVís future and perhaps allow it to do something it hasnít done in years -- expand.

"Basically, it changes the rules of the game as far as how CAN-TV is funded," said Mitchell Szczepanczyk (pronounced shchih-PINE-chick), of Chicago Media Action, an organization that supports independent media groups.

He is cautiously optimistic about the ordinance's chances, noting that the Chicago Cable Commission passed several resolutions demanding RCN make good on payments it owes to CAN-TV. The station has been battling to collect money from RCN for nearly three years.

"Thereís some momentum behind this ordinance," Szczepanczyk said.

CAN-TV started in 1981 as the city's public access cable station. Its programming is noncommercial, and more than 90 percent focuses on local issues.

"CAN-TV really does embody the local public voice," said Barbara Popovic, the station's executive director.

The aldermen use CAN-TV's five channels to talk to their constituents through call-in shows. Citizens also can book air time to voice their views or provide entertainment.

The value of CAN-TV, according to Szczepanczyk, is that audiences can get local and off-beat programming that is too financially risky for profit-driven companies to produce.

Jake Austen has been the producer of "Chic-a-go-go," a dance show for kids of all ages, since it first aired in 1996. He has produced more than 360 episodes.

The show, which is broadcast twice a week, features diverse Chicagoans dancing to an equally diverse range of music. Grandparents boogey with their grandchildren to punk rock. African Americans polka with Polish Americans.

The value of public access TV, Austen said, is that the station's programs are not pressured by having to produce financial results.

"Itís really key that [CAN-TV] does not judge what kind of show youíre doing," Austen said. "In a live television show, there are a lot of mistakes. But it doesnít matter. It captures the energy . . . thatís whatís important about TV . . . having spirit and sincerity."

Popovic said because cable competition is fading in Chicago, her stationís income is threatened. Currently, there are only three cable providers in Chicago -- WideOpenWest, Comcast and RCN. The city is divided into five geographic service areas, and the companies can bid on contracts to run cable in any, or all, of the areas. Often, the cable companies serve customers in more than area.

CAN-TV's budget depends on cable competition. Each company pays CAN-TV $215,000 a year for each area they serve. The more the cable companies compete for customers in overlapping areas, the more money CAN-TV gets.

But one company, RCN, has defaulted on several payments and now owes CAN-TV $1.2 million, according to Popovic. The city funding would guarantee CAN-TV financial security.

Under the proposed ordinance, the cable companies would still be required to pay the $215,000 fees to CAN-TV, but the city would supplement that money with additional funding that comes from the franchise fees paid to the city. Unlike the $215,000 flat fees, the franchise fees cable provides pay the city grows proportionately with the companiesí profits.

Popovic said about 75 percent of the nationís public access stations are funded through city budgets.

Supporters of the ordinance point to the notorious relationship CAN-TV has had with RCN as an example of why the flat fee funding formula is flawed.

In late 2000, RCN was awarded a contract to lay 676 miles of cable throughout Chicago's West Side over five years. But within a year, RCN asked for more time. Then they began defaulting on payments to CAN-TV.

After eight months of negotiations, the Chicago Cable Commission, RCN and CAN-TV agreed to collect RCN payments in two cable areas and suspend payments in two other areas for another year. On Sept. 3, 2002, RCN paid CAN-TV $645,000 plus interest, just one day before the City Council was expected to begin fining the company $750 per violation area.

But by last December, RCN had built less than five miles of cable and was trying to get out of its contracts. The deferred payments that came due to CAN-TV in January -- along with another $215,000 payment -- were not paid.

Representatives of RCN could not be reached for comment.

So far, CAN-TV has not taken any legal action to recover the money RCN owes. But Popovic said CAN-TV's board of directors has not ruled out a lawsuit as an option.

If the ordinance does not pass, CAN-TV stands to lose at least 40 percent of its operating budget. Popovic said CAN-TV operates on an "already rather modest" annual budget of $2.4 million a year.

For its part, the Chicago Cable Commission, which oversees the city's cable contracts, has fined RCN more than $1 million a day for its contractual violations. If the city lets RCN out of its contracts, four-fifths of the city's cable television customers would have not a choice but to use Comcast.

According to Popovic, CAN-TV hasnít received any of the fine money the city has collected from RCN.

Chicago Media Action began urging people two weeks ago to call Mayor Richard M. Daley and the aldermen and ask them to support the ordinance.

Austen said because of CAN-TV's financial crisis, many employees are nervous about job security. He said although no services have been cut yet, the cable access station hasn't been able to expand, either.

"CAN-TV might wither on the vine and perhaps die," Szczepanczyk said. "You could call this a do or die moment."

SIDEBAR: Chicago Cable Service Areas and Their Providers

AREA 1: The Lakefront -- serviced by Comcast and RCN

West Ridge, Rogers Park, Edgewater, Uptown, Lincoln Park, Lakeview, Near North Loop, the Loop, Near South Side, Douglas, Oakland and Grand Boulevard

AREA 2: Just West of the Lakefront to the Loop and the River North Area -- serviced by Comcast and RCN

Jefferson Park, Forest Glen, North Park, Albany Park, Lincoln Square, Irving Park, Avondale, North Center, Logan Square, West Town, Near West Side, Lower West Side and Southern Lawndale

AREA 3: Western and Northern Metropolitan Chicagoland -- serviced by Comcast (RCN has a contract, but has not built enough cables to offer services)

Edison Park, Foster, OíHare, Norwood Park, Dunning, Portage Park, Monteclare, Belmont Cragin, Hermosa, Humboldt Park, Austin, East and West Garfield Park and North Lawndale

AREA 4: The South Loop and Southwest Chicagoland -- serviced by Comcast (RCN has a contract, but has not built enough cables to offer services)

Armour Square, Bridgeport, McKinley Park, New City, Brighton Park, Archer Heights, Garfield Ridge, Clearing, West Elsdon, Gage Park, West Englewood and Englewood, Fuller Park, Kenwood, Hyde Park, Washington Park, Woodlawn, Greater Grand Crossing and South Shore

AREA 5: The South Side of Chicago -- serviced by Comcast and WideOpenWest

West Lawn, Chicago Lawn, Ashburn, Auburn Gresham, Chatham, Avalon Park, South Chicago, Burnside, Calumet Heights, Mount Greenwood, Beverly, Washington Heights, Roseland, Pullman and West Pullman, South Deering, East Side, Morgan Park, Riverdale and Hegewisch

SIDEBAR #2

Cable Provider Number of Customers Citywide

Comcast 313,174

RCN 77,982

WideOpenWest 10,510

PHOTOS: courtesy to Roctober.com, featuring "Ratso" (puppet) and "Ms. Mia" -- the hosts of "Chic-a-go-go"

http://www.roctober.com/chicagogo/about.html

http://www.roctober.com/chicagogo/musicmin/index.html

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