The City Council of St. Paul, Minn., took a major step yesterday toward becoming the first major municipality in the nation to effectively own a local cable television system.
In a 6-to-0 decision, a City Council subcommittee on energy, utilities and environment voted to toss out bids from large national cable concerns and seek proposals from industry companies to manage the system on behalf of the city. Since there are only seven members on the council as a whole, the subcommittee's vote is considered a significant action clearing the way for construction of the system.
"This is a way to keep the city involved," Joanne Showalter, chairman of the subcommittee said in an interview. Showalter also said that last year Congress considered legislation that some municipal officials felt would have deregulated the cable industry on a retroactive basis, potentially tossing aside agreements between cable franchises and local governments.
"Deregulation might pass this time," she added. "So if this works, it might take off all around the country."
There are further steps before the action is final, including the issuance of requests for bids to manage the system and the possibility of a referendum on the issue. Showalter said, however, that it is unlikely that either the City Council or the major of St. Paul would overturn the action.
Six major cable companies, including Warner Amex Cable and Viacom, sought the franchise, in addition to a local cooperative group.
There are 36 small cable systems owned by municipalities; the largest, a 29-year-old system with 7,200 subscribers, is located in San Bruno, Calif. The St. Paul system would be accessible to 110,000 households, would cost about $40 million to build and could be in operation next year, Showlater said.
Thomas Wheeler, president of the National Cable Television Association, in opposing the municipal ownership, said that taxpayers may "end up chasing an expensive rainbow. . . . All other cities of any size have rejected municipal ownership because of the very high cost and great risk that the system will never be built or not show a profit."