Cox Communications has had a franchise to operate in Orleans Parish since 1981
There never was much doubt that Cox Communications would continue as New Orleans' cable television company. However, the City Council made it official this week, unanimously renewing Cox's authority to construct and operate a cable system in the city.
Cox has had a nonexclusive franchise to operate in Orleans Parish since 1981, meaning that other companies can also apply to provide cable services, although none has done so. The franchise was last renewed in 1995 and was due to expire Dec. 31.
New Orleans City HallWhen the council in April issued a request for proposals from potential cable providers, only Cox responded.
The new agreement runs for 10 years, through 2021, and maintains the same basic terms as the 1995 one.
The city will continue to get an annual fee equal to 5 percent of the company's gross annual revenue. The fee currently amounts to about $3.5 million per year. Federal law prohibits the city from charging a similar fee on Cox's revenue from Internet or telephone services.
The company is required to provide a cable system that will "pass by" every residential and commercial building in the city. Service cannot be denied to any potential customers because they live in low-income neighborhoods.
Cox also will be required to furnish basic cable service without charge to every school, police station, fire station and city-owned building.
The city's ability to regulate Cox is limited by federal laws and Federal Communications Commission decisions, which among other things give the federal government the sole authority to regulate the rates cable providers charge their customers. The city also has no authority over Cox's programming policies.
However, the new agreement states that "the quality of Cox's service, including signal quality, response to consumer complaints and billing practices ... has been reasonable in light of community needs." In fact, Valeri LeBlanc, one of the council's consultants, said an engineering audit of the local Cox system found that it is one of the finest cable operations in the country from a technical standpoint, perhaps in part because much of it had to be rebuilt after Hurricane Katrina.
Updated technical standards in the new agreement say Cox must operate a system "with a minimum bandwidth capability of 860 MHz, capable of providing a minimum of 250 video programming channels" including at least 100 high-definition HDTV channels.
During negotiations for the new agreement, probably the biggest issue was the future of the system's public, educational and governmental access channels. These locally programmed channels, usually referred to as PEG channels, carry government meetings, educational programs and shows produced by community activists, nonprofit groups and others.
Bill Aaron, an attorney who represented the council in the discussions, said that in most U.S. jurisdictions PEG access is being eliminated or severely limited. However, the council -- led by Councilwoman Susan Guidry, chairwoman of the Cable and Telecommunications Committee -- insisted on maintaining as much PEG programming as possible.
At present, Cox provides five such channels, which are managed by New Orleans Access Television, a nonprofit entity. Under the current agreement, Cox pays $1 million a year to support the channels; subscribers are charged $1.07 monthly to cover the cost.
The new agreement provides there will be four such channels, all included in basic cable service. Cox will continue to pay $1 million a year to support the PEG channels for three years, after which its obligation will be cut to $150,000 a year. The city will make up at least some of the difference out of its annual franchise payment from Cox, though the city's PEG payments will be capped at 10 percent of the amount it gets from the company.
Access programs will continue to be produced at the WVUE-TV studios.
Cox also will be required to make an annual contribution of $140,000 to "community nonprofit organizations focused upon education, technology training, communications and similar programs benefiting" the city's young people. The City Council will decide what groups get the money.
The company is required to "make reasonable and good-faith efforts" to spend at least 10 percent of its "total annual discretionary spending" with certified minority-, woman- and veteran-owned businesses.
Bruce Eggler can be reached at beggler@timespicayune.com or 504.826.3320.