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Oakland, San Francisco, and other California cities have in recent years tried to negotiate maximum public benefits under their franchise agreement with cable television provider Comcast, but all have backed down when the telecom giant threatened costly litigation.
The latest episode played out May 30 at the Oakland City Council meeting when the council voted to repeal an ordinance that would have required franchisees like Comcast to allow workers to decide whether they want to form a union.
Comcast — dubbed the “Wal-Mart of Telecom” by the American Right to Work Foundation — not only sued Oakland over the ordinance but also decided to void a tentative franchise agreement with the city that had taken three and a half years to work out.
Comcast officials claim the company walked away from the contract because two years had elapsed since major parts of the agreement had been hammered out and during that time the competitive field had shifted.
As for the lawsuit, company officials argue that Oakland’s union ordinance is preempted by federal law and that the city doesn’t have a “proprietary interest” in its franchise.
A proprietary interest occurs when a city has to manage critical public rights-of-way, such as streets, alleys, and utility easements, and must make sure it receives fair compensation for the ongoing use of those public properties by private entities, like Comcast.
In such situations, a city must ensure the efficient and cost-effective management of its public rights-of-way and must maximize benefit and minimize risk, including the risk of a labor-<\h>management conflict that could arise from a union organizing campaign.
That, at least, was the argument the city of Oakland made when it drew up its labor ordinance, and it was the argument that city council president Ignacio De La Fuente continued to make at the May 30 council meeting.
Councilmember Desley Brooks managed to sound like a Comcast apologist by claiming the city had been wrong to pass the ordinance in the first place.
“We knew that when this ordinance was passed, we had no basis to do it,” Brooks said. “We can try and justify why we did it, but federal law is settled in this matter.”
But De La Fuente was joined by Councilmember Jane Brunner and Vice Mayor Jean Quan in insisting that the city wasn’t backing down because it was wrong, but because it couldn’t afford to fight with a deep-<\h>pocketed monopoly in court.
That was the same argument that led the San Francisco Board of Supervisors to narrowly approve a four-year contract extension with Comcast last September, rather than negotiate better public access and other community benefits as part of the contract.
San Jose, Walnut Creek, and other cities have also been tied up in expensive litigation with Comcast, which has virtually unlimited resources and a willingness to spend big in court fights and the political arena. But a bill now moving through the California State Legislature has the potential to shake up the cable television playing field — some say, in ways that are hard to predict.
The Digital Infrastructure and Video Competition Act, authored by Assembly speaker Fabian N??ñez, seeks to allow telephone companies like AT&T and Verizon to provide television services through fiber-<\h>optic lines and thereby compete with Comcast and other cable providers.
The landmark bill, AB 2987, cleared the Assembly on a 70–<\d>0 vote the day after the Oakland City Council repealed its ordinance. It is now awaiting consideration — and possible modification — by the Senate.
It is being watched carefully by Communications Workers of America, which represents 700,000 workers nationally, including 2,000 in the Bay Area, and is one of the few labor unions that is growing.
As CWA field coordinator Lisa Morowitz explained, for cities to take on Comcast individually, as Oakland, Walnut Creek, and San Jose have tried without success to do, is like David fighting Goliath.
“It’s one step forward, two steps back,” Morowitz told the Guardian. Nevertheless, she believes Oakland has substantial leverage in future negotiations with Comcast, precisely because of the N??ñez bill.
“CWA supports AB 2987,” Morowitz said, “because we believe it’s going to create conditions more favorable for cities, communities, and workers by bringing competition to video service.”
She acknowledged that the bill won’t directly address the issues raised during Oakland’s ordinance battle, but, she said, “theoretically, it will create more accountability.”
CWA argues that in addition to creating competition in the video services marketplace, the bill will replace city-by-city franchising deals that have led to steep rate increases, protect revenue streams for local governments, and expand local tax bases.
But Sydney Levy of San Francisco–<\d>based Media Alliance worries that it will simply help the titans of industry and not the communities they supposedly serve.
“I understand that labor thinks it has a better chance of being able to organize within companies if there’s more competition and AT&T is pitted against Verizon is pitted against Comcast,” Levy told us. “But I disagree with CWA on how to have that competition be fair. It’s like energy deregulation. It sounded cute, but it wasn’t. So, we can’t be stupid this time around. We need to do it in a way that’s good for cities, consumers, and communities.”
The goal of franchise agreements that cities enter into with cable companies is to ensure that providers cover the entire city, provide public affairs programming, and pay for their use of public rights-of-way.
“But with the new bill, there’s no enforcement, no contractual obligations, no timetable,” claimed Levy, who worries that under the proposed arrangement Comcast’s competitors could say, “We can’t put fiber everywhere; we’ll upgrade as we see fit.”
“But that’s not good enough,” said Levy, who also worries that the bill will screw up community media locally and that redlining — providing new services in higher-<\h>income neighborhoods while bypassing areas already underserved by broadband services — may well occur.
And then there’s the sticky matter of ceding control to Sacramento.
“If we don’t have the ability to complain at the city level, then we’ll have to take all our fights to Sacramento, where we don’t have equal access,” Levy said. “That would be disastrous for local decision making.”
To his mind, AB 2987 is about cable vs. phone companies, and not about what’s best for the public interest.
“Having competition is a good thing for cities, consumers, and communities, but having competition that is unfair to communities and dismantles protections is not. We need to fix what’s in the Senate version,” he argued.
Levy believes that Comcast is playing a wait-and-see game as the N??ñez bill makes its way through Sacramento and that Oakland should continue to negotiate with Comcast for the best franchise deal possible.
“Because it may be the last franchise deal Oakland gets,” he explained, warning that if AB 2987 passes unmodified in the Senate, “we’re going to go from an irresponsible monopoly system to one that’s a system of unfair competition.”
But N??ñez deputy chief of staff Steve Maviglio told the Guardian that without the N??ñez bill, “cities have as much choice as they did in the former Soviet Union…. This bill is a powerful incentive for other providers.” Maviglio said that the bill language could still be modified in the Senate, but that its basic goal is clear.
“We hope this bill will save consumers money, lead to more competition, and prevent redlining,” he said. “We want to make sure under<\h>served communities don’t get left out of the digital picture.”
Comcast is the 800-pound gorilla lurking behind the vote in Sacramento, the force that all cities are looking to find some leverage against.
San Francisco supervisor Ross Mirkarimi told us that the Board of Supervisors had tailored legislation that mimicked Oakland’s union-<\h>organizing ordinance but abandoned it on the advice of CWA and the SF Labor Council because of what was happening to Oakland at the hands of Comcast.
To Mirkarimi’s mind, the best solution is neither piecemeal ordinances nor statewide laws, but for cities to municipalize their telecom and Internet systems.
“We would not be facing these kind of legal challenges if San Francisco was able to municipalize,” he told us.
And that’s precisely what San Francisco is now pursuing. A proposal by Sup. Tom Ammiano to study the creation of a citywide municipal broadband system — to be installed as streets are opened up for sewer lines or other infrastructure needs — was recently put out to bid.
Ammiano told the Guardian he expects to get some preliminary indications as to whether the system would be viable as soon as this summer, and he’s confident San Francisco will ultimately be in the position to offer television and other broadband services to city residents.
Mirkarimi, who supports the proposal, said it’s the best hope to “redeem our utility democracy as it pertains to our cable industry.” SFBG
