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Woodstock Times - Featured Arts | 11/25/2009 |
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Cable on the table
Woodstock scrutinizes Time Warner contract |
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by George Pattison
An upcoming public hearing is expected to clarify Woodstock's options for providing high-speed Internet access to town residents who lack such service and its benefits, which include the ability to telecommute to jobs outside the immediate area and operate home-based businesses.
The subject of the public hearing, which is scheduled to take place at 8 p.m. on December 8 at the Community Center, is a proposed renewal of the town's contract with Time Warner, which provides cable television and high-speed, or broadband, Internet access to a coverage area that includes Woodstock and West Hurley. The last franchise agreement between the two parties was signed in 1998 and has been renewed annually, unchanged, since then.
In the past year residents of low-population-density areas of Woodstock, such as Silver Hollow, Mink Hollow, West Saugerties, and Hutchin Hill Roads, have petitioned the Town Board and Time Warner to extend broadband service to their neighborhoods. Without broadband, residents of those areas have had to manage with dial-up Internet access, which is not only sluggish, but also ties up a phone line when it is in use.
Non-cable-based broadband options offered elsewhere by Verizon, such as digital subscriber line (DSL) and FiOS service, are either unavailable or unreliable those areas. Also unavailable is Internet-based telephone service, which would enable residents to get help quickly in an emergency when conventional phone lines are compromised.
State law requires cable providers like Time Warner to offer service to households in areas with a minimum population density of 35 homes per linear mile of aerial cable. Under the terms of Woodstock's draft agreement with Time Warner, the company would extend service to all areas with a minimum density of 20 homes per mile. In addition, within the first five years of the ten-year contract, Time Warner would perform a six-mile extension, or "buildout," of its current service area, beginning with a 2.5-mile extension of service to Silver Hollow Road, in the hamlet of Willow.
According to Woodstock supervisor Jeff Moran, Time Warner has also agreed verbally to extend its buildout, within the first five years of the agreement, to the parts of Meads Mountain, MacDaniel Hill, and Upper Byrdcliffe Roads that currently lack cable and broadband service. The company might consider extending service to Hutchin Hill and Mink Hollow Roads, and more distant parts of Silver Hollow Road, although their populations densities are less than 20 homes per mile, said Moran.
The draft agreement contains two other salient features. First, as in the past, Time Warner would annually pay the town a franchise fee equal to five percent of the gross revenue collected by the company in the coverage area during the preceding year. State law sets five percent as the maximum basis for calculating the fee. The franchise fee is actually paid by Time Warner subscribers, as a designated portion of their monthly cable bills, and thus is not a donation made by the company to the town.
In recent years, said Moran in a November 22 interview, the annual fee has amounted to approximately $100,000, of which the town has contributed about $6,000 for the operation of the local public access TV station, channel 23, with the remainder deposited into the town's general fund. [A call seeking confirmation of these amounts was not returned by the town bookkeeper.]
Second, upon execution of the contract Time Warner would connect Woodstock subscribers to the system's local education channel, known as the SHOW (Shandaken, Hurley, Olive, Woodstock) channel. The channel, based at Onteora High School, has been in operation for several months, but has been unavailable to Woodstock subscribers pending a new agreement between the town and the company.
Wireless sending stations
As described in the draft agreement, Time Warner's buildout plans clearly would fall short of extending cable and broadband service to all areas of Woodstock. A program percolating at the county level, however, may offer hope to residents who are unlikely to receive service anytime soon from Time Warner.
Within the next few weeks, Ulster County expects a response to an application it submitted last August for a $4 million stimulus grant under the Federal Broadband Initiatives Program. The money would be applied to the construction of a wireless broadband system designed to provide high-speed Internet coverage to nearly every area of the county that lacks it, including parts of Woodstock. Areas of the towns of Rochester, Wawarsing, Denning, Hardenburgh, Shandaken, Shawangunk, and Olive would also be covered by the project.
Within towns in which the majority of residents receive broadband service, areas classified as either unserved or underserved would qualify for coverage, said March Gallagher, the county's deputy director of economic development, in a November 23 interview. Unserved areas are census tracts in which 90 percent of households lack broadband service; underserved areas tracts in which 50 percent of households are without service.
The service would be provided by Ulster County Community Wireless (UCCW), a division of Kingston-based Intelligent Information Technology Solutions, Inc., whose president is Gilbert deLeon. The estimated total cost of the project, $4.8 million, includes a local matching sum of $800,000, apart from the federal grant. The local match would consist of $400,000 from the state, a $100,000 grant from the Ulster County Development Corporation, and $300,000 from UCCW.
Whereas Time Warner's cable system relies on access to poles and wires, obtained by leasing rights of way from utilities like Central Hudson, the wireless system would employ up to 25 "masts" or "sending stations." At a height of 35 or 40 feet, the stations would be significantly smaller than cell towers, said deLeon in a November 24 interview.
The sending stations would be situated on private property. In exchange for a landowner's permission to site a station on his or her property, the landowner would receive free Internet access. To receive the signal from the sending station, residents in the area would affix a small (four-inch or six-inch) antenna to the exterior of their house. Intervening trees or other obstructions would not impede reception of the signal.
Whereas residents who live at a considerable distance from a utility pole might have to spend thousands of dollars to gain access to cable-based services, connection to the wireless system would entail no such charge, nor would people have to wait for the construction of a pole, according to deLeon. "Our wireless technology has no need for an 'extension cord' from Central Hudson, so we can put sending stations just about anywhere," he said, adding that the system would offer superior quality of service for Internet applications.
The monthly cost of the wireless service would start at $40 (for a 3 megabyte download and a 1 megabyte upload) and $50 (5 megabyte download, 2 megabyte upload), which deLeon deemed competitive with the rates by charged by Time Warner.
The definition of revenue
Meanwhile, Woodstock's proposed cable franchise agreement has its proponents and its detractors. In supporting the agreement, Moran has pointed out that Time Warner, as a private, for-profit corporation, rather than a public utility, cannot be legally compelled to provide services that do not suits its interests. He has further noted that Time Warner operates without private competition in the area. The presence of a competitor, such as Cablevision, for example, might provide the town with leverage in its negotiations with Time Warner. [The draft franchise agreement can be viewed on the town's website, woodstockny.org, via the "Drafts and Proposals" link on the home page.]
The supervisor views the draft agreement as offering reasonable progress toward the goal of eventually providing broadband service throughout the town's borders, while fulfilling the goal of connecting local subscribers to the education channel. At the Town Board's November 17 meeting, David Nelsen-Epstein, who teaches television production at Onteora and supervises the education channel's studio at the school, urged the town to sign the agreement. "Time Warner is the only game in town," said Nelsen-Epstein. "It's time for us to sign the contract."
The draft agreement includes a request by the town that Time Warner provide several pieces of video production equipment for use by Channel 23, the public access station located in the Community Center. In the meantime the town has received, in the form of a "member item" allocation from State Senator John Bonacic, $10,000 toward the estimated $12,000 cost of a portable video production device called a TriCaster. The town plans to purchase the device in the next couple of months, unless an expansion of the cramped Channel 23 studio is undertaken, delaying the equipment purchase.
Skeptics doubt that Woodstock will get the best deal possible if it signs the franchise agreement in its current form. In a November 24 interview, councilwoman Liz Simonson maintained that her previous request for an independent audit of Time Warner's subscriber base in the coverage area has been unfulfilled. An audit would determine the number of subscribers, which in turn would permit a calculation of the gross revenue that is the basis for the 5 percent fee that the town is to receive from the company.
"The real essence of these contracts is the revenue that they generate; that is, what the town is going to get in return for its rights-of-way," said Simonson. "The definition of revenue is crucial." The councilwoman also noted that in recent years Time Warner has offered, and received revenue from, digital telephone service. Perhaps Woodstock could derive a share of the company's income from that revenue source, as well as from its cable TV and broadband services, she said.
Simonson was unimpressed by Time Warner's proposed extension of service as described in the draft agreement. "Time Warner won't provide anything of significance to Woodstock," she said. "They would already have built (line extensions) if it would have been profitable for them. Most of the unserved roads that we are talking about have a density of less than 13 houses per mile." In her view the county's wireless project represents the best hope for Woodstock residents who seek high-speed Internet service. "Wireless broadband is the future," she said.
Simonson expressed other misgivings about the proposed contract, including the difficulty she has experienced in comparing it with the most recent previous draft, which was composed in November 2006. "This is a 100 percent different document than the last draft," she said, adding that she plans to compare the current draft not only with its 2006 predecessor, but also with franchise agreements that other Ulster County municipalities, such as Marbletown, have signed with Time Warner in recent years.
After the public hearing but before the town executes a ten-year contract with Time Warner, said Simonson, the draft agreement should be evaluated by town attorney Rod Futerfas, provided he has the requisite expertise; a representative of the state Public Service Commission; or an independent consultant. "I think that it would be advantageous for someone to vet this agreement for the Town Board, in order to protect Woodstock's revenue stream," she said.
In fact, last March an independent consultant, John Battiloro, who is director of a Westchester County-based firm, offered to assist the town in promptly negotiating an advantageous franchise agreement - for a fee of as much as $120,000. The town passed on that offer, and also on a subsequent, scaled-down proposal that entailed a fee of approximately $13,000, excluding legal expenses. Moran recently expressed opposition to the idea of hiring a consultant, citing the town's tight budget in recessionary times.++
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