Pittsfield's deal with Time Warner not threatened by Comcast takeover
PITTSFIELD -- A long-term agreement between Time Warner Cable and Pittsfield is not threatened by Comcast Corp.'s bid to acquire Time Warner for $45.2 billion, according to city Cable Commission Chairman Brian Johnson.
"We shook hands on it. It's a 10-year agreement, and it is on the table in Atlanta," Johnson said Monday.
He said negotiations with Time Warner are in the final stages and the major details have been hammered out.
"What Time Warner is going through [with Comcast] is not altering anything in [the local agreement] at this point," he said.
However, Johnson said one development to watch -- if the proposed acquisition of Time Warner by Comcast goes through and wins Federal Communications Commission approval -- is whether the Berkshire area is simultaneously sold to a third cable company.
Johnson said there are about 15 smaller companies that could conceivably gain territory and customers as part of a larger agreement between the communications giants. If that happens, he said, it shouldn't mean a decline in services, as a federal requirement would be that the new company must provide at least the same level of service that the larger firm would provide.
He likened the situation to when Verizon sold off networks in rural areas, such as in Vermont, to Fairpoint Communications. Fairpoint was required to provide similar services and has been upgrading its telephone-based capacity in the Green Mountain State.
In reports of the proposed sale of Time Warner to Comcast, Johnson said, it was mentioned as likely that Comcast would sell off up to 10 percent of Time Warner's rural territories. If Comcast assumes all of Time Warner's areas, it would have some 30 million cable customers, far more than any of the other firms. Selling off some areas would still leave it the nation's largest cable provider.
Another aspect of the proposed Time Warner sale, Johnson said, is the question of what might happen to agreements with Albany, N.Y.-area TV stations that allow the Berkshires to receive Boston-area news and sports programming. Saying that Comcast is known in the industry as "a stickler" for examining the fine print of agreements and contracts, Johnson said an audit of practices in the Albany area could prompt those local stations to review and then raise objections to long-standing agreements that allow Boston-area programming in the Berkshires.
Under FCC regulations, Berkshire County is listed as within the Albany advertising region, and stations there have a right to block programming from other areas, such as Boston. If a smaller cable firm comes to the Berkshires, existing local broadcasting agreements might get less scrutiny, Johnson said.
The Cable Commission chairman recently went before the City Council to ask it to table two appointments to the commission proposed by Mayor Daniel L. Bianchi, fearing that any changes in the board might allow Time Warner to call for renegotiating the 10-year agreement.
Cable companies in general now favor shorter service contracts for communities, he said, while the commission is anxious to lock in a longer-term agreement.
In addition, he told councilors, Time Warner has publicly favored changes at the federal level to limit the franchise fees that go for local cable programming -- in the city's case Pittsfield Community Television -- to 2.5 percent of revenues.
Under the current agreement with Time Warner, and in the new agreement, the franchise fee is set at 5 percent, which is the maximum allowed under Massachusetts law. In other words, Johnson said, local cable commissioners do not want to have to renegotiate that percentage or other aspects of the 10-year agreement.
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