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Orangeburg City Council Adopted Franchise Without Cable Company Agreement

Posted on: Wednesday, 14 December 2005, 00:00 CST

By Lee Hendren, The Times and Democrat, Orangeburg, S.C.

Dec. 13--The way Orangeburg City Council handled the renewal of Time Warner's new cable television franchise was not typical, says a company executive.

"The council moved ahead arbitrarily to adopt a franchise that was not acceptable to the incumbent cable operator," said Bud M. Tibshrany, vice president for public affairs.

"This is the first time this has ever happened to Time Warner Cable in South Carolina, and I'm not aware if this has happened elsewhere," Tibshrany said in an interview Thursday.

"Typically there's a consensus or an agreement between the key parties before the council adopts the franchise," he said.

However, city officials say three key differences remain. The franchise given final approval by City Council on Nov. 1 requires Time Warner to:

--Extend service, at no extra charge, to residents who request it and reside within 300 feet of a main line. Time Warner wants to make it 125 feet.

--Provide $12,000 a year in grant funds for equipment and capital costs for the public access channel. Time Warner wants to make a one-time payment of $21,000.

--Pay the city a $5,000 transfer fee if the cable business is ever sold.

Council dropped claims for renewal fees. Time Warner wants both fees eliminated.

The city gave Time Warner 30 days to sign the franchise. The company refused to sign, but continued operating past the expiration of the old franchise, which had been repeatedly extended since June 30.

Tuesday evening, council met in executive session with the city attorney and an attorney from Washington who specializes in this type of matters, James N. Horwood of the firm of Spiegel & McDiarmid.

They emerged tight-lipped except to say the matter would be on the agenda at the next council meeting, set for Dec. 20, and cable TV services would continue for the time being.

Tibshrany echoed that last point. "I want to emphasize, we do not plan to discontinue service in Orangeburg," he said.

Although the franchise has lapsed, "we do believe we have certain protections, as far as renewal is concerned, under the Federal Cable Act. And that's really all I can say about that right now."

"For the most part," federal law trumps state and local laws, he said.

Time Warner believes it is "a good corporate citizen in Orangeburg," Tibshrany said.

"We have worked closely with the city council and its consultant for quite a period of time in our negotiations. Sometimes franchise renewal negotiations take an extended period of time.

"It's been a give-and-take type of situation; however, the issues that are pending, we feel strongly about them and we feel our position is reasonable."

"We hope that the city is amenable to reconsidering the matter," he said. "Hopefully we can get these issues resolved with the City Council in a harmonious and cooperative manner."

Time Warner is "a pretty tough negotiator" because if it grants concessions to one city, others will demand the same, Greg Fender of Dahlonega, Ga., said in an interview Thursday.

"These things can have a steamrolling effect," said Fender, who owns a company called Local Government Services that provides cable TV franchise advisory services to municipalities, usually through the Municipal Association of South Carolina and its counterparts in other states.

Fender is a bit familiar with Orangeburg's situation, having spoken with city officials about his company's services offered through the MASC.

"They had already started their negotiations with Time Warner and at that time they opted not to participate in the municipal association's program," he said.

Fender praised the city's choice of legal counsel.

"I'm glad to hear they've got someone of Mr. Horwood's capability. He's a good attorney at a very good firm. He will represent them well," Fender said.

When asked if Time Warner can continue to provide cable TV services without a new franchise, Fender replied, "The bottom line is, more than likely, yes, they will be able to continue to provide that service. It all depends."

Elaborating, Fender said federal law sets out an extensive, three-year process for franchise renewal or cancellation.

Most municipalities and cable providers begin the process by agreeing to hold informal talks.

"When you get to an impasse like this, where the city sounds frustrated and the cable operator sounds frustrated, either one can notify the other that they will invoke the formal renewal process," Fender said.

That could include a formal assessment of the community's needs, formal proposals by the city and/or cable company or even "a full courtroom-like proceeding at City Hall, where Time Warner is given an opportunity to cross-examine witnesses and review documentation," he said.

Ultimately the dispute could end up in federal court, where the ruling would hinge on whether a judge was convinced that the company's position fulfills the community's needs, he said.

There's another angle to all of this: Time Warner's franchise is non-exclusive. Theoretically, another company could come in and provide cable TV service here.

"It's not going to happen," Fender said. "No one else is going to come in and compete" against the company that is, "by far, the dominant cable operator in the Carolinas."

Besides, Time Warner is "a good company that provides great cable services and puts in a lot of investment to make the systems work," Fender said.

Looking to the future, "BellSouth is the most likely competitor" for certain video and telecommunications services, Fender said. "More than likely, it would come to Columbia before it comes to Orangeburg. And it'll be years before you see that."

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Copyright (c) 2005, The Times and Democrat, Orangeburg, S.C.

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Source: The Times and Democrat, Orangeburg, South Carolina

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