The intense competition for potentially rich cable franchises has spawned allegations of questionable practices by cable companies.
The most common of these has been labeled "rent-a-citizen" by critics. Simply stated, a cable company offers community leaders a percentage of the local franchise -- if it wins out over the competition. The chosen prominent citizen either can pay for the stock outright or earn it by lobbying on the company's behalf before the local government group that will grant the franchise.
Defenders of the practice argue that by passing ot 20 percent or so of the stock to locals, the company is giving the community a voice in the operation of the cable station.
In the Washington area, Storer Broadcasting Co. has come in for criticism for offering 8 percent of the contested Fairfax County franchise to the former county supervisor.
More troubling is a deal Storer struck in Leesburg, Va., where it offered the Loudon Times-Mirror, the dominant paper in the area, the "exclusive" right to provide local news on the cable channel.
But Peter Storer, chief executive officer of the company, views the practice of passing out stock and other favors as simply one of the costs of doing business.
He says the practice differs from community to community. In Coral Gables, "If we're successful, local groups have the option to acquire up to 49 percent of the franchise," he explains.
Storer says that in Little Rock, Ark., the company granted 16 percent of the lcoal franchise to Jackson Stephens, a financier who is one of the most powerful political figures in the state. Stephens, who is also one of the richest men in the state if not the country, donated his stock to a charity, according to Storer.
By contrast, Storer says, "The Dallas city council -- in requesting proposals (from cable companies) -- made it very clear it would not favor rent-a-citizen."
In Minneapolis, meanwhile, an unnamed Storer official was accused of offering a bribe to an alderman if he voted to grant the company the cable franchise for the city. The allegation, pressed by a competing Canadian cable company and a local citizens group, was dismissed for lack of evidence by a county court.
The decision is being appealed.
In another controversy, Storer is accused of reading a competitor's bid when it was inadvertently delivered to a Storer official at Minneapolis city hall. While Storer acknowledges that a company representative took a copy of the competitor's bid out of city hall, the company denies its representatives read the competitor's document and altered its own as a result.