City To Impose $750-A-Day Fine Vs. RCN

Chicago Defender

Published February 9, 2004

By Chinta Strausberg, Staff Reporter

Furious that RCN allegedly snubbed its nose at the " Soul Coast" and services the Gold Coast leaving all of the Austin community unserved, city officials late last week said they'll impose daily fines per violation until the firm does the right thing.

Alderman Isaac "Ike" Carothers (29th) accused RCN of blackballing the Austin community by not providing service. He said if RCN can service the Gold Coast, it can do the same for the " Soul Coast . . ." He's furious that for the second year in a row RCN defaulted on a $215,000 payment to CAN TV while paying Area One which is on the Lakefront area. RCN did not pay a $19,000 production grant to Chicago which violates their cable franchise.

Consumer Services Commissioner Caroline Orzac Shoenberger accused RCN of allegedly violating its franchise agreement with Chicago.

"The agreement calls for 676-miles of cable to built out in Area Two over a five-year period," she said. "Last year, the company built out over three miles. This year, at first they proposed to build out another three-miles, to lay cables so they can have additional customers sign up; however, that has been rescinded and they have asked to be relieved of future obligations in Area Two," she said.

"While operating cable services to customers to Area One (Lakeshore) and by failing to build out in Area Two (which goes from the north along the western border of Cable Area One from Forest Glen and North Park, south to South Lawndale and the lower West side), we believe that RCN has deprived customers in the western part of the city of choice and competition," she said.

Joining Shoenberger at a City Hall press conference were: Carothers, Jim McVane, acting cable administrator, Robert Soelter, deputy commissioner in Shoenberger's department.

Showing a united front, City Council Budget Committee Chairman Alderman William Beavers (7th) said: "RCN should pay. They think they're above the law, but, we'll have to prove it to them that they're going to have to pay just like everybody else pays."

Shoenberger said: "CAN TV should be get paid. I believe that CAN is the TV station, the outlet for the little guy, democracy based on individuals and their right to speak out. . . ."

Carothers didn't mince any words, calling RCN "a bully. That's all there is to it. They are a bully. They decided not to pay $215,000 . . . they just made the decision that they're not going to pay and they just want to see if we're going to accept that . . . . "

"They can leave tomorrow, and we'll find them and go after them," an irate Carothers told reporters. "If we do nothing, then, they'll get away with everything."

Carothers told the Chicago Defender he will consult with Ald. Bernard Stone (50th) and others to determine "what steps should we now take to further go after this company . . . "

"RCN knows who lives where. They made a conscious decision to avoid the Austin community, the largest community in Chicago. They didn't go there. They went to the Gold Coast, not the Soul Coast," Carothers said, adding that the cable company will pay in stiff fines if the company doesn't do the right thing by Blacks in Chicago.

Shoenberger said when the city of Chicago Cable Commission meets at 11 a.m. Tuesday at the Harold Washington Library, 400 S. State Street, a resolution will be introduced urging that RCN receive a notice of violation "for its failure to comply with their franchise agreement.

"We want RCN to live up to its competition . . . and if this matter is not resolved, the city may seek damages for up to $750-per-day for each violation and could also proceed against an RCN bond, a letter of credit, that that city currently holds in the amount of $3.35 million," the commissioner said.

According to Barbara Popovic, executive director of CAN TV, cable funding constitutes 84 percent of CAN TV's total budget. The total commitment to CAN TV from RCN for cable areas 2,3, and 4 is $645,000 ($215,000 per area) which constitutes 26 percent of CAN TV's total budget.

RCN has always made its Cable Area One payment in a timely fashion. This area is located along the lakefront from Rogers Park on the North to Kenwood on the South just north of Hyde Park. During 2003, $430,000 was reportedly deferred due to the city's temporary suspension of RCN in Cable Areas 3 and 4.

Also, during 2003, CAN TV budgeted close to a $200,000 deficit to tide the organization over during the suspension. Expenses were slashed by ten percent and staff was reduced.

The total number of staff at present is 27 full time and five part time. CAN TV's 2004 budget is down from $2.4 million which is down from $2.7 million in 2002, according to Popovic.

There are 401,666 current cable subscribers in Chicago, according to Popovic. Comcast has 313,174 subscribers, RCN has 77,982, and WOW has 10,510.

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