Prince William County Supervisor James McCoart didn't believe his resolution of 19 months ago was particularly extraordinary. "Be it resolved," the one-sentence proposal said, "that the Prince William Board of County Supervisors does hereby agree to not get involved in cable television."
"I didn't want to see any more county regulation," said McCoart, who had feared that such regulation would boost monthly cable TV bills and anger his Dale City constituents. "It would have cost my people more, and given them nothing in return."
As it turned out, McCoart's resolution was extraordinary indeed. With its approval, Prince William became one of the few counties in America to spurn the chance to regulate--and tax--the lucrative cable communications industry within its borders.
At a time when cable industry officials are complaining about burdensome local regulation and Congress is debating restrictions on community rights to regulate cable, Prince William offers a case study of what happened when one local government let the marketplace regulate cable. For Prince William, the results have been mixed:
* County residents are limited to 12 or 18 channels of cable service--fewer than the range of 54 to 108 offered by most modern cable systems, cable experts say.
* Prince William residents pay roughly the same as subscribers in other areas for the services they receive, but they don't have the option of paying more to receive a broader range of services.
* None of Prince William's three cable systems offer local programming, such as TV coverage of local sporting events, or public access studios, where local residents can learn how to produce TV programs.
* Cable TV is limited to the county's densely populated areas, such as Dale City, Woodbridge and Quantico, because their density promises cable companies higher revenues. Residents of sparsely populated areas in Prince William receive no cable service and are not considered likely to get it.
* The county has not spent a penny on costly regulatory procedures, but neither has it collected tax revenues from the lucrative cable industry that can range up to 5 percent of cable revenues.
The county's cable market has been dominated by a local cable firm, Cable Television Inc. (CTI) of Dale City, rather than the industry giants who dominate cable elsewhere. CTI recently announced plans, however, to sell out to a national cable company. That will concentrate control of cable in the county's populous I-95 corridor in the hands of Prime Cable of Austin, Texas.
* Head-to-head competition among cable companies, which county officials had hoped to encourage through their decision, has not emerged.
* Lacking exclusive franchises, three cable firms nonetheless have carved out individual operating areas in the county. Other companies wishing to do business in the county found themselves unable to do so, either because a local firm was in the territory already or because they could not get legal authorization needed to install cables.
In short, the deregulation of cable television in Prince William County has proven neither peril nor panacea. County residents, their television reception muddied by Virginia's rolling hills, have paid about $15 a month and subscribed to cable in numbers approaching 90 percent in some areas.
Yet, many cable experts worry about the policy's long-term impact on electronic communications in the county. As cable evolves into a space-age network with two-way video communications, they say, Prince William's residents may find themselves with outmoded systems that broadcast only entertainment programming.
"This is a classic example of the detrimental effect on a community, the public, and the industry itself that occurs when there isn't some coherent regulatory policy," said Howard J. Gan, general counsel of the Cable Television Information Center of Arlington, a group that advises communities on cable franchising. "Clearly the county as a whole is not going to get advanced service for years to come because of a lack of planning by the government."
One impact of the board's policy is confusion over who is empowered to grant cable companies the legal authority to run wires in Prince William. Without exclusive county-wide rights, cable companies are now wooing civic groups and homeowners' associations in subdivisions as small as 380 homes, promising thousands of dollars in return for the chance to provide cable service.
"[The money] will be a help to our association," said Maggie Smith, manager of the Lake Ridge Parks and Recreation Association, which recently signed with Lake Ridge Cablevision and hopes to get up to $1,300 a year from the company. "Our intention on receiving these funds is to set them aside for community projects, like planting trees."
Cable companies still have problems from nonregulation. The county's rural electric cooperative, which owns many of the county's utility poles, is refusing to let cable companies string wires on the poles unless they first get county approval. "They county supervisors are asking us to award a franchise, but we can't do that," said John Bonfadini, a member of the co-op's governing board. "Our responsibility is to offer electrical service."
Meanwhile, nonregulation has allowed the county's largest cable system, Cable Television, Inc., to expand virtually unchallenged in much of the county's densely populated and lucrative areas, even though it offers only 12 channels. Developer Cecil Hylton, CTI's owner, is planning to sell his system to Prime Cable at a reported price of $13 million.
After the county rejected a ban on cable expansion at the same time it rejected regulation, Hylton added 5,000 new subscribers to his system in the Montclair and Woodbridge areas. Those subscribers added at least $4.5 million to the market value of his system, said a spokeswoman for Paul Kagan and Associates, publisher of a leading cable industry financial guide.
A question posed by supervisor McCoart in Prince William was basic: Does the government have a right to regulate the communications industry?
After heavy lobbying from constituents who either subscribed to cable services or hoped to award cable franchises of their own, Prince William board members voted 4-3 against county regulation. "When you regulate something, everyone ends up paying the same high price," said county supervisor Eileen Barnes, who switched her vote to suport McCoart's resolution after a Montclair citizens group lobbied her for almost three hours. "I don't even like to regulate taxicabs."
Some officials in the nation's 13,000 franchised communities worry that the Prince William view may prevail. Just a few months ago, the U.S. Supreme Court ruled in a Boulder, Colo., case that localities may be sued for antitrust violations if they seek to restrict the trade of cable companies. At the same time, several bills have been introduced in Congress that would sharply curtail local regulation.
Even cable officials acknowledge the benefit of government-bestowed wiring rights, and say they don't want complete local deregulation. "This is not the industry saying, 'Regulate us to protect us,' " said Thomas E. Wheeler, president of the National Cable Television Association, an industry trade group that recently accused the nation's cities of placing unnecessary regulatory burdens on cable. "But there is a legitimate role for government in allowing people to get to the marketplace."
Prince William's supervisors got essentially the same message in letters from five of the six cable companies they consulted before their cable vote. their cable vote. "We told them that if you don't have a franchise, you can really end up with a mess," said Charles E. Sampson, president of CATV General Corp. of Fairfax. "Somebody builds a little something here, a little something there. Suppose people want service in their area and there isn't any? Who do they complain to? The county will just say, 'We don't have any authority to do anything.' "
Only one company recommended the county not regulate cable--Hylton's CTI. "We wanted free enterprise, period," said CTI's president Norris Sisson. "We figured that everyone should have the same right to do business that everyone else does."
Sisson said federal regulation only adds to the consumer cost of cable--an assertion many in the cable industry echo. A recent study prepared for the National Cable Television Association, for instance, found that some 22 percent of the monthly subscriber fee paid in one American city went to the cost of local regulation.
Hylton's company had much to lose with county regulation. Hylton, who is considered one of the county's wealthiest and most influential men, built a cable system during the 1960s and 1970s to attract homebuyers to his Dale City residential development. By 1980, he had 7,500 cable customers and was planning to add thousands more. County attorney Terry Emerson said Hylton's cable business could have been jeopardized if the county had regulated the public rights of way Hylton used for his cable lines.
"Of course, Mr. Hylton didn't want to see regulation," said an official of another area cable firm. "He was already here. Why did he want to see anyone else get started here?"
Hylton, a publicity-shy man, declined to discuss his cable business, but his close associates say he was not that concerned with regulation. "I don't think Mr. Hylton would have been inconvenienced if the board had taken a different position," said George Halfpap, general manager of Hylton Enterprises, Inc.
For the supervisors, it was less a weighty regulatory issue than a matter of simple politics. Many residents of Dale City, Montclair, Lake Ridge and other areas opposed regulation.
Arguments that county regulation eventually could improve cable service went nowhere with residents eager for any service instead of the few fuzzy over-the-air channels they received. Even less popular to urban residents were arguments that government regulation would ensure service to rural county residents. "Why should somebody in Dale City be paying higher prices for cable just so somebody living on a five-acre plot somewhere can get it?" asked one subscriber. "It just doesn't make any sense."
Faced with the prospect of a bitter battle for the county's franchise, the board rejected local regulation without holding a public hearing. "It was just a gut kind of a decision," said county manager Robert S. Noe, Jr. "We did no staff work."
"In Prince William County, we're not that sophisticated," explained one county official. "We don't always look to the future. People out here are interested in other things--like potholes and biting dogs."