A City Council committee voted Thursday to extend the city’s 3-year-old franchise agreement with Cox Communications in exchange for the cable provider’s promise to increase its annual payments to the city for public, educational and government-access television programming.
The council also will issue a request for proposals to companies with an interest in managing access television on Cox Cable systems. That job is now being done by New Orleans Access Television Inc., or NOA-TV, a nonprofit organization that was created by and reports to the council.
NOA-TV has struggled for years to generate enough revenue to become self-sustaining.
The council’s Utility, Cable, Telecommunications and Technology Committee approved the revised agreement unanimously. It now goes to the full council for consideration.
Under the amendment, the Cox franchise agreement, scheduled to expire in 2021, will be extended through 2031. Over that period, the cable company will increase its anticipated funding of public, educational and government — or PEG — access programming. Such funding was scheduled to drop drastically this year under the current agreement.
Cox will pay $600,000 for such programming in 2015. That amount will drop to $500,000 in 2016 and, for the rest of the franchise agreement, will settle at $435,000 to $450,000, or half of 1 percent of Cox’s gross annual revenue. In effect, the new agreement more than triples the amount Cox planned to pay to support the programming under its original agreement.
The money Cox uses to pay for the programming is generated by a fee charged to its customers. That charge has historically been about $2 per household per month, said Steve Sawyer, vice president for public and government affairs for Cox.
The city and Cox reached the new agreement after an “extensive and exhaustive” process that Cox was initially hesitant to participate in because the company already had a franchise agreement in place and had no legal obligation to negotiate, committee Chairman Jason Williams said.
From at least 1995 through 2011, Cox paid the city, through NOA-TV, $1 million annually to support PEG programming. When the council negotiated a new franchise agreement with the company in 2011, it was under circumstances less favorable to public-access television than when the 1995 agreement was reached.
By 2011, federal laws and regulations that once strongly supported PEG programming and often required cable companies to provide support for access channels had been discarded.
“What was previously required could no longer be required and, in some cases, could not even be voluntarily agreed to between the parties,” City Council adviser Basile Uddo said. “The previous leverage was not only lost but, in effect, reversed.”
At the time, the council was able to get Cox to agree only to continue making the annual $1 million payment for the first three years of its new franchise agreement. That three-year period ended in December, and Cox’s contribution was scheduled to fall to $150,000 annually starting this year.
The thinking in 2011 was that three years would be enough time for NOA-TV to transition to generating its own funding, Uddo said. But the nonprofit still has no plan for reaching self-sufficiency and has yet to generate any revenue, Uddo said. NOA-TV had planned to seek an extension from Cox at the three-year deadline, a solution that Uddo said was not viable.
“Cox had absolutely no obligation to accept such a proposal,” Uddo said. “Furthermore, this approach does not offer a long-term solution to PEG funding that is consistent with the changes in federal law, nor does it foster standards of accountability.”
Tim Kappel, an NOA-TV board member, said the board, appointed in 2013 after the council dumped the entire previous board, has been singularly focused on coming up with money but found it difficult to find any sustainable options.
“The challenge that we faced ultimately is we’re trying to commercialize a product that may or may not be commercial in nature,” Kappel said.
A condition of the new agreement is that the council must issue an RFP or RFQ for a group to manage the public, educational and government-access channels, potentially replacing NOA-TV.
NOA-TV oversees production, training and programming for five channels.
That condition was key to reaching the agreement, Uddo said. It will bring “long-overdue competition” and new ideas, perhaps from the many film-related companies that have sprouted up in the city over the past decade, he said.
The bidders will have to provide strategies for how they would raise private-sector funding. NOA-TV is allowed to respond to the RFP, but the council will have to rewrite the rules establishing the nonprofit to remove any conflict of interest.
William Aaron, a former adviser to the council on cable and telecommunications matters, cautioned the panel that providing Cox with such a long franchise agreement might make it an attractive target for acquisition. He suggested adding language that would protect the PEG agreement should that take place.
The Cox franchise is not exclusive, meaning other companies may apply for franchises while Cox’s agreement with the city is in place.