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Bossier Governments Deservedly Get Tough on Cox

Finally, if belatedly, Bossier City and Bossier Parish are trying to enforce their franchise agreements with Cox Communications. KTAL, owned by Nexstar Broadcasting Group, ordered Cox to withdraw transmission of the station, because it refused to pay 30 cents per subscriber per month for the right to rebroadcast KTAL’s signal.

Note that for many of the channels it transmits, Cox does pay, often at several times the rate Nexstar is demanding. In large part these costs get passed on to consumers. Also worth noting is that, at the current 33,000 subscribers in the KTAL viewing area, Cox would have to fork out $118,000 a year to keep KTAL on the air.

Even if this amount would only comprise 0.00205 percent of Cox Communication’s revenues for 2003, the fact is it has been hemorrhaging money lately (details and more recent figures are hard to come by because this is a privately-owned company by Cox Enterprises). The communications unit lost $137.8 million in 2003, which was almost half of the 2002 loss. (It’s harder to judge the overall impact on the parent since they publicly report only revenues, which have increased 40 percent in the past four years.) Even if it knuckled under and then attempted to pass on the charges, it would lose subscribers because of the higher costs, increasing losses.

Worse, its real fear is that this fever will spread to other over-the-air broadcast station owners, creating a monumental competitive problem. This is why it is resisting so strenuously carrying the station for anything but free, trying to conduct a public relations campaign to make it seem like it’s not the villain, and as well to prevent defection of subscribers to satellite transmitters.

Cox asserts that it cannot be forced to carry KTAL despite federal law, even though the applicable U.S. statutes seem pretty unambiguous. United States Code 47 Section 534 makes it clear that local stations must be carried by a cable operator under franchise agreement, unless the originator refuses to allow the operator to have access to the signal under 47USC Sec. 325b. In effect, Nexstar is invoking this right.

Cox has every right to refuse under law – except it signed an agreement with the city and parish that it would have to broadcast the three local original network stations. A Cox spokesman said in The Times “a 1992 FCC ruling prohibits cable operators from retransmitting the signal of a commercial broadcast station without permission from the station's owner,” implying it can break the agreement. But I can find no record of this rule from the Federal Communications Commission – it sounds like he’s quoting the law.

However, Nexstar is not denying any signal at all to Cox, it’s just attaching conditions to its rebroadcast. That is, it is not a legal impossibility for Cox to transmit the signal – it becomes legally possible if Cox pays the fee (although the FCC does have the right to regulate such a fee to insure that it is not “excessive” and it’s hard to argue, relative to other fees by broadcasters, that 30 cents per subscriber per month is “excessive”).

And it’s another fact that Cox legally bound itself to transmit KTAL. Simply put, it has the means to fulfill its contract but is refusing to do so. So the city and parish (also backed by what they say is a federal court ruling affirming their position) not only are doing the correct legal thing, they are morally correct in preventing Cox, in essence, from cheating their citizens who wish to have cable from getting the complete package that Cox promised.

In fact, the city and parish should go further, by whatever means available in the contract, to institute proceedings to remove Cox as the franchisee and replace it with somebody else. In this competitive environment, no doubt an operator gladly would step forward and follow all parts of a franchise agreement like the present version. (This also would solve a headache for Bossier City concerning the relocation of the Cox building to make way for the Benton Road overpass – force Cox to sell it after selling its equipment to the new operator, the new operator removes the equipment, and then bulldoze the building.)

Don’t let the Cox campaign fool you – they are in the wrong here and the city and parish need to press this matter as forcefully as possible

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