Cox responds to Mayor Baker’s cable franchise veto

Cox Communications said it is “surprised and disappointed” with Mayor Ray Baker’s veto of its franchise extension, and the company reminded the city that federal law requires certain criteria to be met before a city can reject a cable operator’s franchise.

“None of those criteria were cited in (the) Mayor’s veto statement,” Jay Allbaugh, vice president of government affairs for Cox, said in a letter addressed to City Administrator Dennis Kelly.

Mayor Ray Baker on Friday vetoed an ordinance approved Feb. 17 by the Board of Directors that granted a third extension of the franchise agreement between the city and Cox Communications, a regional cable and internet provider.

Apparently, the hitch in the negotiations is perception between the city and Cox over an “Equal Protection” clause. Cox, according to Allbaugh, believes it should get essentially the same franchise provisions allowed AT&T Arkansas, which is now providing television service through its U-verse system. The equal protection clause in the previous agreement between Cox and the city said an agreement with any other video provider must be “no less burdensome nor more favorable” than the agreement with Cox.

“The City’s responsibility is to ensure that it doesn’t provide an advantage to one company by imposing additional costs or restrictions on the other company,” Allbaugh noted in the letter.

Jerry Canfield, the attorney representing the city said Cox does not deserve the same treatment because the AT&T agreement covers more than just video services.

“CoxCom’s position that Fort Smith must adopt a cable franchise which is essentially the same as Ordinance 16-07 is inconsistently applied in its discussions with the City as CoxCom refuses to pay franchise fees based on non video revenues (telephone service) whereas AT&T pays franchise fees not only on its local access line telephone service but it has agreed to also pay franchise fees on its video revenues,” Canfield noted in a letter to Deputy City Administrator Ray Gosack.

(Link here for the full letter from Canfield and other city documents related to this matter.)

The differences over franchise language do not justify the veto action of Mayor Baker, said Len Pitcock, Arkansas director of government affairs for Cox Communications. He said both sides were negotiating in good faith up until the veto.

“It’s regrettable that the Mayor is treating any business operating in Fort Smith this way,” Pitcock told The City Wire. “We spend millions of dollars in the city of Fort Smith on an annual basis in payroll … and for other types of business services we do there.”

Pitcock said Cox Communications has invested $70 million in the Fort Smith area in recent years for fiber optic systems and other communication projects to upgrade individual and business services in the area.

And about those channel changes (moving religious programming to other tiers that cost more money to access) over which Mayor Baker has repeatedly castigated Cox?

“That was done in an effort to benefit the largest number of our customers and impact the smallest number,” Pitcock explained.

Technically, it’s all about “space” within the cables and cords and fiber optic networks Cox uses to push television, phone and Internet service. The space previously used by the religious programming and Lawrence Welk used high-value broadband space that Cox now uses to present sports and movie programming, high-definition service and other channels and Internet services that were in much greater consumer demand than local religious programming.