Regulation and the Cable Environment

By Norman J. Jacknis, Ph.D., WATPA Chair

This, our first newsletter, [Reprinted from WATPA's hard copy edition.-Ed.] focuses on the cable industry. Our lead article summarizes some interesting information about the efforts of other areas to deal with cable franchises during changing times. It also discusses developments in the cable industry. Please note that almost all of this information was gleaned from various sources on the Internet.

The "State Of The Art" is best summed up by Thomas C. Feige, president of Time Warner's Full Service Network operation in Orlando. The project was launched this spring with two Time Warner employees. He states, "It proves that the basic technology works when deployed in the field. For now at least, it's the Fractional Service Network. Put another way, they've advertised a space ship, but are only at Kitty Hawk."

COMMUNITY NETWORKS

Various communities around the country have been inducing their cable operators to provide community networks, Internet connections and other data services over the cable "wires." They are commonly called I-Nets. Here is a sampling.

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"We're just getting started on our second renewal in five years. Data will probably be an issue. There has been a parallel coax Institutional network since the system was built in 1980. It is underutilized. We initially used it to transmit computerized circulation data back to a central computer from our six libraries. However when we went to a new library system and jumped from 15 to 80 terminals, we were reluctant to depend on the RF modems and recurring problems with them, so we went with dedicated lines from Bell. It costs us though, so I would like to see the I-Net included in the recent fiber optic upgrade Comcast is doing. (Not required under franchise; they're doing it on their own.) Comcast is also planning a market test of data transmission to subscribers later this year."

Patricia Ryan
Director of Libraries and Cable Television
Township of Lower Merion, PA.

"The City of Newton, Mass.,has had an I-net from Continental Cable for over 10 years. We were slow to start making use of it but are now getting to the point where we are concerned that we soon won't have enough frequencies. We have drops in every school (21), library (5), and municipal building (16). Originally intended to be for video only, it is now becoming a surrogate data network until our six year goal of laying a 48 strand fiber backbone connecting to every building is accomplished (we're in year one).

"Local access TV uses the I-net for cablecasts from any location and regularly cablecasts the Board of Aldermen and School Committee meetings. Recent live events have included: Mayoral debate from Main Library; preliminary election results from City Hall; Scandinavian Festival from City Hall.

"School Department uses the I-net for: Interactive Classrooms (primarily between the two high schools); Interactive Teleconferences; Satellite Communications for Global Learning for language classes); and viewing residential cable. They are also using it for a student information and administrative data network.

"The Fire Department uses the I-net for training using both video tapes and live lecture/classes to their six stations. The Public Works Department has set up a WAN (Wide Area Network) to link its two yards with City Hall. The purpose of the network is to support the Department's Facilities Management System, its general communications needs and the City's Geographic Information System (GIS). The last is an ARC/Info based system which resides on a Sun workstation at City Hall. The School Dept. will soon be linked to the GIS. The I-net will soon be used to connect other municipal satellite sites to the City Hall data network including the Health Department and the Housing Rehabilitation Office."

Specific questions should be directed to:
Linda Walden, Cable Coordinator,
Newton Planning Department
(617) 552-7135 ext. 104.
Steve Gartrell
Director of Community Development
City of Newton, Mass.
1000 Commonwealth Avenue
Newton, MA 02159-1417
(617)552-7135 x123
(617)965-6620 (Fax)

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"Bethel, Maine, is in the early stages of data distribution on CATV resources using LANcity bridges (LANcity Corporation (508)475-4050). Data transmission is purported to be at 10 megabits/second. After about two weeks of operation, there's nothing to suggest that the system is other than robust."

Harry H. Dresser, Jr., Ed.D.
Associate Headmaster, Gould Academy
Bethel, Maine 04217
(207) 824-2161
(207)824-3879 (fax)
dresserh@gould.pvt.k12.me.us

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"Cedar Falls [Iowa] Utilities is a municipal electric, gas, water, and communications utility with roots over 100 years old. However, the communications utility portion was started in October 1994 to build the information infrastructure needed in our community. CedarNet, a community computing network for a portion of Northeast Iowa [will] offer access to CedarNet over the new hybrid fiber/coax network. This will be in addition to cable TV, possible telephone services, and numerous other uses.

"CedarNet is on-line in demo mode with dial-up access up to 28.8 kbaud. The broadband network will be built starting this summer with completion scheduled for Aug 96. We expect access to CedarNEt and other users to be 2mb/s. We anticipate a great future."

Curtis Johnson, P.E.
Cedar Falls Utilities
P.O. Box 769
Cedar Falls, IA
50613

319-266-1761
319-266-8158 (FAX)
johnsoncurti@cobra.uni.edu

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"We are negotiating a franchise agreement with a fiber optic carrier for our community (Chicago Suburb of 46,000). The company proposes to install a fiber optic network thru the community with a view toward providing penetration in residential and business area in the long term. Illinois case law presently restricts the collection of franchise fees. We have negotiated a favored nations clause to receive franchise fees if the matter in the IL Supreme Court (AT&T vs Arlington Heights)ends up in favor of municipalities. In an effort to maximize our opportunities in the pending agreement, we have proposed a fiber optic backbone system to eventually interconnect our public buildings (schools, library, Village, Park District, Post Office, etc.) via this system. The company has proposed reserving two pair of fiber optic lines in their cable for our exclusive use in any way we see fit. This is a loop to interconnect up to 50 sites in the community. The deal is summarized as follows:

• Splice Point/Manhole -paid by company
• Line to building (aerial) -up to 75'by company, balance by Village
• Line to building (underground)
• -materials by company install @$150/ft +/- by Village
• Electronic interface- purchased/owned by Village
• Fee to use fiber line -none -- unlimited use by govt units on system

Kurt Bressner

Village Manager
Village of Downers Grove, Illinois
(708) 719-4567
FAX (708) 719-4593
bressner@interaccess.com

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"In Santa Cruz, California, the franchise renewal (1989, I think) required that channels dedicated for community uses must be capable of carrying audio, video and data. The cable operator (TCI) subsequently determined that establishing and maintaining 'clean' data transmission would require an inordinate amount of expense, and offered instead to provide a separate dark fiber optic network that connects key facilities of the city and county. The city and county accepted this offer and now has that network, but, to my knowledge, has not yet activated it. So, I agree that in this instance at least the design of the cable plant was inappropriate for computer networking.
Tom Karwin, Coordinator of Educational Advancement
Division of Natural Sciences
University of California, Santa Cruz
tkarwin@cats.ucsc.edu

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"The Fitchburg, MA PEG channel goes to every cable subscriber in the city. We have a subsplit system. All four reverse channels and their associated upstream channels are under the control of the city. All pole amplifiers are populated to drive signals in both directions.
T-7 maps to Channel 56 Public Education Television
T-8 maps to Channel 27 (a Zenith Communications Ethernet-like data channel pair)
T-9 maps to Channel 36 Public Access Television
T-10 maps to Channel 63 Government Television

"I know of no reason political or otherwise why individual users ought not to be encouraged to use our T-8/Channel 27 for Internet access. This would further enhance access to the schools by interested parents since it assumes that the schools/city have set up the necessary Routers and servers to support such a system.
Ken Jones

(508)262-1197

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"I recently had a personal demo of access to WWW and AOL via the service that Comcast Cable will soon field test in the Philadelphia area. They are using the cable modems developed by Intel. The price of the box is expected to be in the price range of current 28.8 modems. [V.34 street prices $200-$300 -Ed.] We did a side-by-side comparison with a 14.4 dial up. The results may make much of the debate about viability of Web access via current phone modems moot.

"Comcast's architecture is different from others. They have their own local servers with a large local database. But you can also gateway to commercial services and the Internet. My rough calculation, based on downloading some GIF files via AOL from the telephone and cable alternatives is that the cable speed was about 5 to 1. Comcast says they will be expanding the service to about 300 homes soon. They haven't set pricing, but mumbled something about the cost of a second residential phone line."

"In my own neighborhood of Cambridge, Continental Cablevision spent last summer and fall laying upgraded cable to be used for similar purposes."
Ben Compaine, Bell Atlantic Professor of Telecommunications
Center for Information Industry Research
Temple University
ciir@aol.com

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"There is NO FCC requirement for PEG access! The original FCC requirement for PEG in systems larger than 3500 subs (in a 1972 Rept & Order) was struck down by the Supreme Court in the Midwest Video II case (in 1976?). The Cable Act of 1984 (unamended in 1992) is permissive for local franchising authorities to require PEG access (which can include I-Nets). It is totally a local option, as is the configuration...a local govt can require EG, but not public access, or I-Net, and Public Access only, etc."
Dr. Barry Orton, Professor of Telecommunications
University of Wisconsin-Madison
6l0 Langdon St.
Madison, WI 53703
Voice: 608 262 2394
Fax: 608 265 2329
Internet:borton@macc.wisc.edu
bmorton@facstaff.wisc.edu
Listowner:TELECOMREG;FD-NET

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"Despite the current brougha [sic] over whether CATV can be used for telephone service (and vice versa), cable operators can provide data networks to PEG entities and be totally within the law.

"There are some prominent I-Nets. Glenview, IL comes to mind immediately. They even have their own (continued page 5)homepage on [the Internet/World Wide Web] (http://www.ncook.k12.il.us/dist34_home_page.html) with complete details of how their network came to be, and how it is used now. Or email John Mundt at mundtj@ncook.k12.il.us.

"There is a very large and prominent I-Net in Oregon that was featured recently in America's Network magazine this [past] summer. "The list of communities that are doing this is longer than can fit in this message. But they have all found that yes, indeed - data networking over CATV does satisfy PEG requirements... largely because the imposition of a PEGrequirement is left by the FCC up to the local franchising authority.
Mark Wheeler - Advisory Systems Engineer
Apple Computer, Reston, VA
mwheeler@apple.com
Note: The expert on cable modems at Zenith is James Treuhaft, at 708-391-8000.

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REGULATIONS

Federal Communications Commission

Chairman Reed Hundt has proposed that there would be an unregulated tier of cable programs -- a la carte packages -- similar to Optimum TV offered by Cablevision Systems in Yonkers. Unfortunately, not everyone is happy about this. Cablevision was sued by A&E Network when it offered that service individually on request.

The item is from the best of sources, John Higgins' (higgins@dorsai.dorsai.org or 212-887- 8390) Multichannel News. (Subscription information: 800-247-8080, $78/year).

Class action suits over late fees are on the rise nationwide and media attorneys are warning operators to review their late fee provisions in order to avoid this latest wave of "cable bashing." Although many industries have penalties for late payment of bills and those policies go unchallenged, "if cable does it, it must be wrong," said one attorney. Consumers are convincing attorneys to take up their causes on a contingency basis. Though plaintiffs have had trouble certifying the class, once one succeeds, "You'll see a domino effect. If one does well, even more will crop up," said Tod Dubow of Robins, Kaplan, Miller & Ciresi. The suits to date have been filed in various states under different statutes, including consumer protection and business and professions codes. But the consumers' complaints are similar: The defendant cable system's late fee (often from $5 to $15) is excessive and does not represent the business' actual administrative cost to process the late payment. The suits also generally charge that the on-time payment window is so short that a significant portion of the consumer base will be deemed late every month. Plaintiffs in the suits have proved tenacious. The original plaintiff in a suit filed against Cencom of Alabama in 1993 saw his complaint thrown out, but another subscriber took up the mantle and is still slogging forward, trying to get a class certified and draw other cable companies into the late fee challenge. Other suits are pending against Sacramento (Calif.) Cablevision (Scripps Howard Cable Services), Viacom Cable in San Francisco and District Cablevision Inc. of Washington D.C. In San Diego, the city attorney challenged the late fee policies of Cox Cable Communications and Time Warner Cable last year and both companies negotiated a financial settlement. Since the latter two disputes were settled, they should not affect the outcome of lawsuits on the topic, attorneys said.

VIDEO ON DEMAND

There has been much discussion and several demonstrations of digital media servers that allow subscribers to select movies and other entertainment on demand. They could also participate in interactive advertising. As a result of tests at the end of last year, two things were clear. First, the servers do work and can provide service to at least a small number of people. Second, they won't be cheap, with estimates of a minimal 100 title system costing a few million dollars.

However, Frontier Corp. (Rochester Telephone Corp.) ended its video on demand test in Brighton, NY early. for lack of economic viability. The company said that subscribers were not sufficiently interested in movies alone.

Although not a trend, among the established cable operators there has been a movement away from pay-per-view entertainment. TCI has begun to use the channels for other purposes.

BEYOND REGULATION

Five affluent suburbs of Detroit have owned their own cable system. At the end of last year, they decided to sell the 16,000-subscriber system for $32 million to Comcast, which had managed it for them since 1988. The reason cited was the forthcoming competition in the cable industry.

Most municipally-owned systems have beenestablished as public utilities and tend to charge less than profit making cable operators. Some cities have also threatened to set up competitive systems to light a fire under current franchise holders.

About the Author--
Norman J. Jacknis has been in computer technology for more than twenty years. His functional specialties are interactive on-line computer-based information services, the uses of computer technology in the public and non-profit sectors, operations, and software development. Currently he is UNIX Products Director for Systems Strategies, Inc. Dr. Jacknis received his Ph.D., M.A. and B.A. at Princeton University.