The cable-contract stakes

SAN FRANCISCO'S CABLE TV contract has become a national issue. Last week, as Daniel Zoll reports on page 11, the Consumer Federation of America, the nation's largest consumer advocacy group, urged the city to block the transfer of the local franchise from AT&T to the merged AT&T-Comcast Corp. unless the newly merged cable giant offers the city a much better deal. The CFA sees this as a precedent-setting battle: with Congress and the Bush administration doing little or nothing to regulate media mergers, the best hope for consumer protection is at the local government level.

San Francisco doesn't have a good record in this area. Twice before – when TCI bought Viacom, and when AT&T bought TCI – the city rolled over and allowed the new company to assume the local franchise with nothing more than a few modest concessions. Fortunately, there are some signs that the new city attorney, Dennis Herrera, and the Board of Supervisors (led by Sup. Chris Daly) are a bit more willing to fight the communications conglomerate this time around. Among the key concessions city officials ought to demand: a higher franchise fee (which would help cover the city's looming budget deficit), an upgrade of the aging cable infrastructure, more money and channel space for public-access and government channels, and discounted rates for seniors.

But if past precedent is any example, the final details of the new cable contract will be negotiated in closed-door meetings between AT&T-Comcast lawyers and representatives of the City Attorney's Office. And – given the way Clear Channel Communications, another media conglomerate, took the city to the cleaners in negotiating its contract to build pedestal-mounted news racks (see "Good-bye News Racks," 5/8/02) – it's difficult to have much faith in that process.

The best and most effective way to ensure the city's negotiators push the city's best interest is to open the process to public scrutiny. There's very little reason for closed-door talks – this is, after all, a no-bid, sole-source contract, so AT&T-Comcast can't claim that it needs secrecy to protect a competitive advantage. The supervisors should tell Herrera not to agree to any secret negotiating sessions; at the very least, if there are sound legal reasons for some closed-door talks, the board should appoint a public representative (a media or consumer activist) to monitor the discussions.

AT&T-Comcast may not like that approach, but the city has the upper hand here: if the private cable provider can't do business openly, then the supervisors should immediately begin discussing the creation of a municipal cable system. (The city of Alameda, right across the bay, has municipal cable, which provides good service at low rates – and brings millions of dollars into the city's general fund.)