Council Considers Cablevision Franchise Renewal

The Township Council spent much of its brief Tuesday night agenda meeting preparing to renew Cablevision's Parsippany franchise. The renewal would be for a maximum of 15 years with the possibility of an automatic 10-year renewal.

The current contract expires Jan. 23, 2012. According to Business Administrator Jasmine Lim, under this pact Cablevision gave the municipality 2 percent of its local revenue. In addition, the cable outlet provided Parsippany's Video on the Go a minimum of six hours per week of of airtime on the Educational and Public/Government channels and free installation and basic monthly service to Town Hall and to each township school and library branch.

Lim said terms for the renewal contract have yet to be negotiated between Cablevision and the council. Any agreement would be nonexclusive, meaning that town leaders legally may offer franchises to Cablevision's competitors. Of course, Parsippany already does: The township has a number of television providers, among them DirecTV, Verizon FIOS and Comcast.

The actual deliberation (and perhaps a vote on Cablevision's renewal) is slated to take place at the council's next regular meeting, which is set for Aug. 16.

During the Tuesday agenda meeting, council members in attendance heard a presentation by the cable provider's Director of Governmental Relations, Gary Shaw.

Shaw explained that his Oakland-based company recently filed an application as the first step in the franchise renewal process. His appearance in front of the council and members of the public was the second step.

His presentation was limited to a few comments regarding Cablevision's wish to continue marketing its entertainment and information services to the people of Parsippany.

"Our product speaks for itself," said Shaw. "And now we're competing in a much more competitive field with DirecTV and Verizon Fios around."

Instead of giving a formal, scripted presentation, Shaw took questions from the council.

"We keep being told that competition brings rates down. Why hasn't that happened?" asked Council Vice President Michael dePierro.

"Competition may help control rates, but we in the cable industry face the same programming costs and operating costs that everyone else faces. We're subject to the same gas price increases the rest of New Jersey is subject to," Shaw replied. "That's why you haven't seen the reduced rates that were promised."

Shaw said Cablevision doesn't want to charge rates that anger its 1.1 million New Jersey customers, but TV shows (and the production companies and networks that make them) routinely raise their rates.

"Our biggest hurdle is an increase of 15 percent every year in programming costs," he explained. "Rates could by right go up 15 percent too, but they don't."

In addition to seeking the local franchise, Cablevision has also applied for a statewide franchise, which would allow the 38-year-old company to bypass the municipal process. 

"Verizon FIOS championed that statewide franchise, which has a four percent franchise fee that's paid by the consumer. Cablevision opposed it," said Shaw. "Our customers are only paying two percent on basic or family packages. if we were under statewide franchise, we would receive four percent, and that would come out of customers' pockets."

Cablevision is exercising its option to apply for a statewide franchise, but only because competition is forcing its hand, according to Shaw. 

"We want to negotiate on the municipal level as well," he said.