The Media
By TOM LITTLEWOOD

Chicago cable TV: let's make a deal

THE ECONOMICS of cable television determined the early order of wiring Illinois for pay-as-you-go video. The big communications conglomerates first looked to medium-sized cities: Peoria and Decatur (General Electric Cablevision), Danville and DeKalb (Warner Cable Corp.), Rock Island and Galena (Teleprompter Corp.), and Quincy, Lincoln, Freeport and Kewanee (Continental Cablevision).

Champaign-Urbana was the last major downstate community to select a community antenna system. The local franchising commission rejected Time Inc. and chose a Denver-based company with the understanding that local citizens would retain a half interest. But the capital costs were so high that local investors reduced their interest to 20 percent — and Time Inc. bought out the Denver firm. So the policy of preventing the multimedia giant from controlling cable TV in C-U was frustrated.

Meanwhile many sparsely settled rural sections of the state were not reached by the coaxial cable. Cable operations were not feasible in Chicago either for several reasons: a big city is very expensive to wire; reception from the variety of commercial stations in Chicago is generally good over the flat terrain, and the late Mayor Richard J. Daley wanted no part of neighborhood telecasting systems that might compete with his ward committeemen for the minds and hearts of Chicagoans.

More recently, however, important developments, both technical and jurisdictional, have combined to cause a frenzy of cable activity in the suburbs of the Chicago metropolitan area.

This resurgence of interest in the metropolitan area came about, first, because the Federal Communications Commission backed away from regulation of cable TV, including the rich opportunities in pay cable. Pay cable refers to a "premium" channel over which first-run movies, sports and other special attractions can be received for an extra fee. Local authorities — municipalities or in some cases counties — have been left to regulate (and incidentally to tax) cable TV, in much the same way as a public utility.

Just as important have been the improvements in communications satellite and microwave technology which make it possible for a cable broadcaster to "import" signals from anywhere on more than 100 separate channels.

As of 1978, there were 98 cable systems in 236 of the 1,278 Illinois communities with 402,461 subscribers. This represented only a little over 11 percent of the households in the state. Nationwide market penetration stands at about 20 percent. When the figure passes 30 percent, investors are expected to begin reaping large profits.

In the suburbs of Chicago, 19 companies are scrambling for whatever edge they can find to land some of the 150 separate local franchises up for grabs. "There's a gold rush going on," said Melvyn Muchnik, professor of communications at Governors State University and cable policy adviser to Park Forest. "They [the competing companies] play different games. Some will promise you anything."

One of the favorite games played by the corporate giants is to "rent" someone with local political clout like properly wired-in politicians, lawyers and newspaper publishers who are given cut-rate stock options in return for their influence. For $1, Cox Cable Communications, owned by the Cox Broadcasting Co. and now merging with GE, gave Paddock Publications of Arlington Heights 6 1/3 shares of stock in Norcom, a subsidiary created to land cable franchises in the communities where Paddock publishes newspapers. And in western and southern suburbs, four community publishers — Bruce Sagen of the Southtown Economist, Leo Lerner of the Lerner Newspapers, Charles Williams of Star Publications and Jack Kubik of Life Newspapers — hold 10 percent of the stock in a company established by Metrovision Inc. to acquire cable franchises in that area. Metrovision is owned by the Newhouse newspaper and broadcasting group.

An alderman in Berwyn said Kubik threatened to make political trouble for him in the Life Newspapers if he didn't support the franchise award. Kubik admitted contacting the alderman but denied making any threats.

Kubik said the publishers are looking ahead to the time not too far off when the words in a newspaper can be transmitted more economically by electronic signal onto the home television screen. Cable TV is "an information dispensing medium that requires no little boys to deliver the product," added Bruce Sagen. The print medium people want to be there on the day that residents of Midlothian and Palos Hills receive community news around the clock on a television channel instead of waiting for their weekly newspaper to be dropped on or somewhere near their front porch.

Meanwhile, there was a familiar odor of corruption about Mayor Byrne's sudden announcement that Chicago was getting ready to award cable franchises too. The Insull era of payoffs for utility and streetcar franchises could pale alongside the prospect of Chicago aldermen choosing cable broadcasters.

The shining promise of cable TV all along has been more diversity, more local public affairs programming, more opportunities for independent producers, and eventually two-way communication between public officials and the viewing audience at home. In Illinois, the unseemly jostling for the big bucks that are involved in cable television has thoroughly obscured the potential for public enlightenment.

38/August 1980/Illinois Issues