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LOCAL Announcement :: Media

HELP CAN-TV Pt 1

RCN Defaults on its payment to CAN TV
Fact Sheet on Issues
RCN Defaults on Its Payment to CAN TV
Chicago Access Network Television ("CAN TV") was mandated by City ordinance when cable was first introduced to Chicago and has been part of every new franchise, renewal and transfer since that time. The City of Chicago has always placed a high priority on citizen involvement in cable television.

CAN TV was established as a 501(c) 3 and has been in operation for two decades providing Chicagoans with training, equipment and access to five channels on the cable system throughout Chicago. CAN TV channels are noncommercial and over 95% local. CAN TV has been recognized as a national model: diverse, inclusive, and accessible.

CAN TV is funded under agreements set for the 15 year terms of the franchises held by the three Chicago cable providers, Comcast, WideOpenWest and RCN. Cable companies have been doing business in Chicago for 20 years, through economic downturns, and no company other than RCN has ever defaulted on its support to CAN TV.

Just sixteen months after gaining their franchises for Cable Areas 1,2,3 & 4, RCN defaulted on a $645,000 payment due to CAN TV on January 7, 2002 for Cable Areas 2,3,& 4. That payment was finally made in September of 2002 after 8 months of public protest.

The City amended RCN's areas 3 & 4 franchise agreements to allow for a one-year suspension of activity in those two areas. This was to be followed by the City's evaluation of RCN's financial condition and either an extension or termination of those two areas. CAN TV deferred its payments during the suspension pending the City's decision. Just a year after reaching this agreement, RCN is attempting to circumvent the terms of the City's amendment by filing a modification request with the City on December 12, 2003 to pull out of cable areas 3 & 4 and to halt construction and drastically reduce its funding obligation to CAN TV in cable area 2. RCN wants to walk away from its deal with CAN TV in all but one Cable area. That's bad business and a bad precedent.

On January 7, 2004, RCN defaulted on a $215,000 payment due CAN TV for cable area 2. RCN points to a bad economy and slow growth as the cause. RCN's contracts with CAN TV are not based on RCN's customer base or the economy. RCN contracted with CAN TV based on a fixed formula followed by all cable companies operating in Chicago.

RCN claims it is a good corporate citizen, bringing jobs, cable competition and contracts to local minority businesses. These benefits are limited to Cable Area One where RCN has also met its payment obligation to CAN TV. These benefits do not extend to RCN's Cable Areas 2,3,& 4 where RCN has defaulted on its area 2 payment and is seeking termination of areas 3 & 4.

RCN claims that the money owed to CAN TV harms their future viability as a business. The $645,000 obligation to CAN TV for areas 2, 3 & 4 is less than 1/10th of 1% of RCN's 2002 annual expenses.

CAN TV mounted the greatest single expansion in its history in 2001, after RCN made its first annual payment to CAN TV. In reliance on receiving $645,000 per year over 15 year franchise terms, CAN TV increased its budget by over 40%, expanding programs, adding space, increasing the staff by 50%, and launching new programs in the community. In 2003, $430,000 of that was deferred during the RCN suspension in two cable areas, expenses were cut by 10%, and staff was reduced by 7 FT and 3 PT people. (The total number of staff at present is 27 FT and 5 PT.) CAN TV has halted its expansion pending the City's decision on areas 3 & 4. RCN's default on its cable area 2 obligation further puts the public interest at risk.

CAN TV relies on this funding. The public relies on CAN TV.
 
 

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