Power Shift Roils Cable TV Panelists

With the renewal of cable television franchises in Los Angeles more than a year overdue, the City Council has taken steps to increase its power over the lucrative contracts and reduce the authority of the commission appointed to oversee the process.

As a result, the former president of the citizens panel has resigned, charging that the council actions will “emasculate” the Information Technology Commission and politicize the contract process. Three of the four other commissioners say they might also quit if the proposed new rules do not allow them to have a meaningful role in awarding the franchises.

Commissioners say they have more expertise and time to devote to the complex contract negotiations than council members, and are in a better position to bargain with cable operators because they are not reliant on political contributions.

“The commission is completely independent,” said former commission President Henry Gradstein, who resigned Dec. 12. “We don’t receive political contributions. We don’t have an agenda.”

The cable television industry and its lobbyists have made more than $28,000 in political contributions to City Council members and other city candidates in the last four years. Fourteen of the 15 current council members have received contributions in that period, including all three members of the council committee that recommended the change.

The industry has spent more than $1 million on lobbyists in the last two years. Cable companies spent more on lobbying at City Hall last year than any other industry, according to records of the city Ethics Commission.

Council members said they have been frustrated by delays and are simply trying to streamline the process, but fully intend to let the commission play a role.

Councilman Jack Weiss, chairman of the council’s Information Technology and General Services Committee, maintains he will make decisions on the franchises based on the merits, not on who contributed to him.

City officials are poised to begin negotiations in February with cable television companies for the city’s 14 franchises, which last year brought the franchise holders more than $500 million. The negotiations, to be initiated by the Information Technology Agency, will also set the terms for the cable operators, which pay the city approximately $25 million in franchise fees annually.

Los Angeles’ cable systems are operated by five companies and serve 680,000 customers. The quality and price of cable service have been a chronic source of dissatisfaction, with residents routinely calling council offices to register their complaints.

Normally, the ITA would submit proposed agreements to the commission for review and potential revision before the panel would make its recommendations to the council.

However, the City Council voted Tuesday to have the city attorney draft a new ordinance that would have the cable companies submit franchise proposals to the city clerk instead of the ITA. The clerk could then submit the proposals directly to the City Council.

The proposed ordinance, which must come back to the council for final approval, says the clerk shall also submit the franchise proposals to the commission, the ITA or another panel. Gradstein said that provision means the commission could be excluded from the process, though council members say that is not their intent.

Even if the franchise proposals are submitted to the commission, the new rules would give the panel only 30 days to review the proposals and forward them to the council; however, it can request an extension from the council in its report. The commission has been given 120 days in the past, but even that limit has not been enforced.

“For something like this, 30 days is not going to allow for meaningful review,” said Commissioner Dean Hansell.

Commissioners also object that the new ordinance would allow the City Council to reject any commission recommendation with a majority vote, as opposed to the two-thirds vote it must currently muster to overturn the commission.

If the council changes procedure, the new franchises could potentially be negotiated and approved by the City Council with little or no input from the commission, say panel members, who spent the past year holding public hearings in all 15 City Council districts to prepare for their role in the process.

“Cable re-franchising is the biggest thing we have to do,” Commissioner Matthew J. Geragos said. “If they wanted to pull that from under us, why didn’t they say that a year ago?”

Geragos, Hansell and Commissioner Melanie Lomax said they might follow Gradstein’s lead and resign if the changes are approved and they are excluded from meaningful involvement.

Lomax alleged that the cable companies are lobbying for the rule changes in order to avoid the “close scrutiny” that the commission would provide.

“I share the concern that this new proposal to alter the role of the commission is not in the best interest of the public and the city of Los Angeles,” Lomax said.

An industry official denied that cable companies are lobbying for the new rules, and said the industry has not even taken a position on the changes.

“That has been an internal discussion of the city, and the industry does not feel it is appropriate to weigh in relative to how they want to proceed with negotiations from their end,” said Dean Leavenworth, president of the Los Angeles Cable Operators Assn.

All of the city’s 15-year cable franchises expired in the summer of 2002. But, because the city wanted to get public input and conduct studies of the city’s needs for cable service and the performance of the current franchise holders, officials were not ready to begin negotiations on new long-term pacts.

Most of the old franchise agreements were extended 24 months to give the city time to prepare for negotiations, so they now expire in August 2004. The exception is Adelphia Communications Corp., which has had its franchise extended on a month-to-month basis for closer monitoring because it has filed for bankruptcy protection.

Council members said they are trying to jump-start the process, not bypass the commission.

“The commission has an important role and their input will be respected,” said Weiss, whose committee proposed the changes.

But, he added, “The City Council is the ultimate decision maker on cable franchises and the council is directly accountable to the voters, so it’s important that the council be able to give this a robust deliberation without delay.”

Councilman Eric Garcetti, a member of the council information technology committee, also is comfortable with the council having a strong role in the franchising process because council members are accountable to the voters, a spokesman said.

Weiss said City Council offices have been flooded with complaints by cable customers in Los Angeles involving rising rates and the quality of service, and as a result council members will not go easy on the companies.

“I am very concerned and intend to drive a very hard bargain with the cable companies,” Weiss said.