Keep Your Word

Cable Company's contract default draws plenty of city ire, and the threat of even more

Chicago Journal

Published February 12, 2004

By Lydialyle Gibson

This time round it didn't take long for RCN executives to earn some pretty tough love from City Hall types. The tongue-lashing began just days after Jan. 7, when the cable company failed to pay the city's public access station an annual $215,000 fee-the second such lapse in two years. Fiftieth Ward Alderman Bernard Stone lobbed the first few sarcastic barbs. Then last Thursday, Consumer Services Commissioner Caroline Shoenberger convened a press conference outside Council Chambers to chide RCN for shirking its "responsibility to the people of the city of Chicago, its obligation to the little guy looking for a forum." Twenty-ninth Ward Alderman Isaac Carothers called RCN's delinquency a "tragedy."

By Tuesday morning, members of the city's Cable Commission were unanimously approving a pair of resolutions that declared the cable company in violation of its city contract and exhorted RCN officials to pony up the money they owe CAN TV (Cable companies' annual fees fund the bulk of the public access channel's budget). Otherwise, the resolutions hinted, city officials may soon decide to fine RCN up to $750 per day for every day it's in default. The proclamation spurred a rousing round of applause from onlookers who'd poured into the basement auditorium of the Harold Washington Library to listen to Tuesday's meeting.

According to one of Tuesday's resolutions, the contract RCN officials signed with the city back in December 2000 required the firm not only to pay $215,000 each year to CAN TV but also to build some 676 miles of cable plant in an area stretching across much of the West Side before the end of 2005. To date, the company has only built 3.54 miles. In addition, RCN officials have not yet made good on a $19,000 annual fee to the city.

As they have before, RCN officials are crying poor. The telecom industry has taken a dive, they say, and the company is struggling to keep afloat. In a letter written two months ago, RCN executives begged city officials to release them of their obligations in all but one of the city's cable franchise areas. Willing to continue service to the lakefront, RCN sought to unload the rest of its contractual burden. Current agreements with the city would have the cable company operating in the lion's share of the city.

Tuesday morning, Chicago Cable Commissioner Herman Wong took RCN to task for launching new networks in New York; San Francisco; Boston; Washington, D.C.; and Lehigh Valley, Penn., even as company officials failed to pay CAN TV.

"With that kind of money, I don't see why you can't pay us $215,000," Wong said. The auditorium erupted into whistles and wild applause.

The last time RCN officials failed to cut a check for CAN TV it spurred an eight-month stand-off. In the end, RCN officials paid the $645,000 they owed, and in return city officials suspended RCN's obligations in two of its four cable franchise areas, promising to study the company's financial wherewithal. Before that study could be finished, though, RCN officials made their written appeal in December.

In her press conference last Thursday, Shoenberger, who also sits on the Chicago Cable Commission, said she hoped to coax RCN executives into fulfilling the deal they inked three years ago. "A lot of companies are having financial trouble," Shoenberger said. "We still have a contract, we Still have the public trust. Those cannot be a mere footnote. ... We're not trying to drive RCN out of business; we're not trying to say, 'Leave the city' We're saying, 'Keep your word.'"

Pointing out that RCN was the first company to offer even the promise of competition in most of the city's neighborhoods with few exceptions, Comcast is the only provider citywide-Cable Commissioner James McCabe, said city officials were eager to see the company succeed.

"You've got to keep your word," McCabe said. "You've got to keep good faith with the public and with elected officials."

Carothers, though, seemed to be in a less forgiving mood at last Thursday press conference. With a ward that stretches through the Austin neighborhood on the Far West Side, Carothers accused RCN officials of ignoring would-be black, Latino, and lower-income patrons by offering service only to the lakefront.

"People in the Austin community buy just as many cable and premium channels probably more," Coruthers said. "We're not going to let a company come in and pick and choose."

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