Comcast opposes CAN TV funding ordinance; support needed in City Hall on Nov. 1, 10AM

Posted by Larry - October 30, 2004 (entry 248)

*MEDIA ALERT* Press Contact: Allan Gomez, 312-738-1400

*WHAT:* The Chicago Committee on Finance votes on the ordinance to fund CAN TV introduced by Mayor Daley and Alderman Stone. This ordinance will stem losses from a failed funding structure that is tied to cable competition.

*WHEN:* Monday, November 1 at 10 a.m.

*WHERE: * City Council Chambers, 2nd floor, City Hall, 121 N. LaSalle.

*WHY:* This ordinance proposes a viable solution to help close the funding gap caused by the failure of cable competition in the City of Chicago. The first part of the new ordinance addresses a change in the amusement tax. The second part of the ordinance provides CAN TV with a small percentage of the cable franchise fee that is currently paid to the City by cable companies.

*IN FAVOR:* The majority of Chicago Aldermen on behalf of thousands of constituents citywide. CAN TV supporters.

*OPPOSED:* Comcast has expressed opposition to the first part of the ordinance which calls for a slight decrease in the deduction of Comcast's 5% franchise fee from the 7% amusement tax. Comcast argues that this is unfair, that it will burden its subscribers, and that it will cause a competitive disadvantage in the face of growing competition from satellite providers.

Is the new ordinance unfair to Comcast? Comcast, the largest cable company in Chicago, gets 85% of citywide cable revenues. It pays 58% of CAN TV's cable funding. That only increases to 65% with the addition of franchise fee dollars rerouted to CAN TV.

Will the new ordinance burden Comcast's customers? The change in the amusement tax will result in less than $2.00 per year to Comcast subscribers, or approximately 15 cents per month.

Will the new ordinance cause a competitive disadvantage? According to The Chicago Tribune (March 2004), Comcast holds the lion's share of the market with satellite having only 10%, and competitive cable companies like RCN and WOW holding only 5%.

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