Whither CAN TV?

Aldermen contemplate the financial future of public access television in Chicago

Chicago Journal

Published March 04, 2004

By Lydialyle Gibson

What began last Friday morning as one more installment in an ongoing harangue against RCN cable company-now two months in arrears on its $215,000 debt to the city public access television station-ended up an uneasy contemplation on the future of West Loop-based CAN TV.

"This is a situation we need to look at," CAN TV Executive Director Barbara Popovic told members of the City Council's Committee on Finance last week.

In the last couple years, city officials have had more than a little trouble coaxing money-and reliable promises-out of RCN executives. Back in 2000, the cable giant agreed to unfurl 676 miles of cable across the West Side within five years. They also undertook a vow to begin operating in four of the city's five cable franchise areas-and to pay CAN TV headquartered at Green and Van Buren, $215,000 per year per area for the rights to each.

To date, the company has laid just 3.54 miles of cable across the West Side, and last December RCN officials wrote a letter to the city begging to be relieved of their contractual burdens in two franchise areas. On Jan. 7, RCN officials failed to cut CAN TV'S $215,000 check for franchise area two, the second such lapse in as many years. Finally, last month, they announced the company would file for Chapter 11 bankruptcy. The Chicago Cable Commission's response was to levy fines of more than $1 million per day for RCN's unfulfilled contract.

All of this leaves CAN TV perching rather precariously. Should RCN decide to leave the city altogether, its departure would punch an $860,000 hole in the cable access channel's annual budget. That would certainly mean cutbacks in programming and staff, and a shrinking of the public forum aldermen took turns praising last Friday.

But the issue is larger than that. All told, city efforts at fostering competition between cable companies seem to have borne little fruit. When RCN officials inked their fateful deal four years ago, they agreed to provide competition in all but one of the city's franchise areas. These days, though, the firm only truly operates in one of those areas. Throughout most of the city, cable is still a monopoly, even though on paper it's not.

Meanwhile, as 47th Ward Alderman Helen Shiller said last week, "The rates keep going up...We have to address what it takes for people not to feel hijacked."

And for CAN TV to be fully funded. Without competition for cable in the city's franchise areas, CAN TV's budget would dwindle.

"Fake competition doesn't help us," Shiller said.

Popovic reiterated that assertion.

"If competition goes away in our city, that's not a fourth of our funding; it's half our funding," Popovic said. "Pretend funding does no one any good....Where is this going in the city of Chicago?"

Without a new-and broad- solution, Popovic warned, "All we're going to do here is continue to fight these battles one company at a time."

In the meantime, members of the Chicago Cable Commission are aiming to extract a little cash, by carrot or stick, from RCN executives. Following last week's announcement of $1 million in daily fines, which tick away from a Feb. 10 start date, cable commission members have begun an investigation of RCN's bonds and letters of credit. According Caroline Shoenberger, commissioner of the Department of Consumer Services and a member of the Chicago Cable Commission, RCN's promissory bonds are worth a total $9 million and its letters of credit are worth $1.5 million.

"We have taken formal steps to assert a claim on RCN's bonds and letters of credit," said Jeff Levine, the city's chief corporation counsel.

And since the cable commission's daily fines can't be discharged in bankruptcy, Shoenberger said, the weighty penalty will almost certainly give the city a voice in RCN's Chapter 11 proceedings.

More than one alderman at last week's meeting weighed in with pretty tough love for RCN, whose executives were not able to attend.

"It's very disrespectful the way this company takes the city for granted," said 27th Ward Alderman Walter Burnett. "I think we should hold this company and other companies like it to the fire."

Sputtering mad, 31st Ward Alderman Ray Suarez said RCN executives decided to "thumb their nose" at their city contract, and he vowed never again to support them, should they come to the city with hat in hand.

"I know they have expenses, but they also have a lot of money, and they want to have their cake and eat it," Suarez said."

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