Last week’s cover story, “Mega hurts,” by Lisa M. Collins, included the disclosure that Comcast Cable grossed nearly $100 million and took more than $36 million in operating profits out of Detroit last year.
Granted, that’s a pretax figure that does not include depreciation and other bookkeeping hocus-pocus that undoubtedly will add up to a net loss on the books. But it’s still a big bundle of cash, generated in Detroit — a city grappling with a $75 million deficit — by a company that gloats about its 40 percent profit margin.
Comcast generated a record number of complaints from its customers in Detroit last year. The cable giant is in the crosshairs of the city’s Cable Communications Commission, but nobody is willing to pull the trigger.
The company’s contract to do business in Detroit expired in June 2000, and commission officials say Comcast has dragged its feet in negotiating a new pact and has refused to provide data that would allow a thorough assessment of its performance. They fret that Comcast’s Detroit system is antiquated.
Comcast says its Motown system capacity is 610 megahertz (MHz) and downplays the notion that higher-capacity systems are even necessary in the digital age, which makes one wonder why Comcast has wired most of Detroit’s suburbs at 750 MHz, or why Comcast bothered to wire Albuquerque, N.M., at 860 MHz.
How obstinate is Comcast? Commission officials say Comcast has yet to provide documentation that it has even upgraded Detroit from the Paleozoic-capacity 550 MHz.
The stakes here transcend MTV and ESPN. Cable companies have joined the digital communications revolution, scrounging for a piece of the burgeoning Internet pie.
No modern city can expect to compete without a high-speed, high-capacity, state-of-the-art system. Yet the issue doesn’t seem to be on the proverbial radar.
Who can blame Comcast for its lassitude? If I were allowed to do so, I’d sit idly back and rake in the cash too.
When push comes to shove, the city has been a pushover, from the top down. Comcast jacks the city around because the city allows itself to be jacked.
The city has granted Comcast a virtual monopoly. An ordinance decrees that any cable company serving Detroit must serve the entire city. This provision was designed to ensure that the entire city, including the poorest neighborhoods, got wired in the first place. But its effect over the years has been poor service to all neighborhoods. Nobody has come in to compete with Comcast, because they’d also have to wire the entire city.
Yet, curiously, even fierce Comcast critics on the Cable Commission say they have no desire to change that key provision, which amounts to a license to plunder for Comcast.
Dennis Archer, the neo-Nero whose eight years as mayor ended Dec. 31, told Collins: “There was no reason to reach out and try to create competition.”
New Mayor Kwame Kilpatrick has been silent on the matter. When Collins buttonholed him at one of his many coronation celebrations, the mayor enthusiastically assured her he was interested in commenting on the issue and would do so in time for publication of her story. Collins’ dogged efforts to hold Kilpatrick to his pledge were met with silence. My own calls to Kilpatrick’s handlers have not been returned. Perhaps the newly crowned populist was busy getting fitted for a new designer suit.
The city received $4.5 million in franchise fees from Comcast customers in fiscal 2000 — a sum city leaders apparently view not as the relative pittance it is, but as a philanthropic donation from Comcast.
“Vision” is a word that gets tossed out more often than the trash in Detroit. If Kilpatrick has any vision, he’ll recognize his power to reap far greater rewards and catapult the city into this millennium.
As it stands, the city is allowing Comcast to pillage and forgo the kinds of technological upgrades that should be mandatory. It’s the worst of both worlds.
There’s a contingent at City Hall, including City Council President Maryann Mahaffey and Auditor General Joseph Harris, that believes the city should build its own cable system. The city has the power to buy Comcast’s system if no new franchise agreement can be reached.
Rather than taking its $4.5 million kickback and simpering about Comcast’s performance, the city should investigate the possibilities of becoming a cable provider. Some 400 other local governments around the nation are already in the business.
Even if it cost the city $200 million to buy Comcast’s system or build its own cable grid, it could pay for itself — and more — within a few years. It’s a can’t-miss investment.
The City of Detroit could control its own communications destiny. The city could use its own system to improve its efficiency and revolutionize communications with its constituents. It could vastly upgrade TV and telecommunications service to those constituents (and charge them less for it) while emerging as a cutting-edge city and socking away the kinds of profits that Comcast now remits to company headquarters in Philadelphia.
The city has some “enterprise funds” that are supposed to operate like businesses. Unfortunately, some would go bankrupt without substantial subsidies. An in-house cable system is one enterprise that would actually pay for itself and enrich the city’s barren treasury. This new revenue could be used to improve more traditional infrastructure and our neighborhoods.
Who knows? Somebody might even get around to posting the names of streets, or repairing the potholes that have loosened several of my dental fillings.
If I were Kilpatrick, I would summon Comcast’s apparatchiks to my office, flex my massive arms and read them the riot act. I’d tell them that if they make $36 million this year, the city will take half of it. If Comcast’s moguls won’t share the wealth, I’d show them the door and set about creating my own cable system.
The time has long since passed for the city to start acting like the master, not the servant.Jeremy Voas is editor of Metro Times. E-mail him at email@example.com