Friday, January 19, 2007


State Procurement Policy Board decides Hawaii's public access television channels shall be privatized and put out to bid

The Procurement Policy Board at its meeting on Thursday, January 18, 2007 voted against three petitions on rules to exempt Hawaii's public access television services from the bidding process. It also denied a request for declaratory ruling that the public access services are utilities and should therefore be exempt from the state procurement process, and another holding that the funds that support these public services come from cable fees and so are not public funds subject to the procurement law.

The PPB decision pushes the next action over to the Department of Commerce and Consumer Affairs, which even before yesterday's PPB decision had already issued a draft Request for Proposals (RFP) to begin the open-bidding process.

Open bidding risks loss of local control

Any corporation, based in Hawaii or the Mainland, can win the contracts. This could mean that an organization with a political or religious agenda could take over Hawaii's broadcast channels. The requirement that the bidder be a non-profit is no obstacle to a large broadcaster such as Fox News or to Time Warner (the cable company) itself, since it is inexpensive to organize and register a non-profit in the state of Hawaii.

Should the contract go to a new corporate entity, there would be no assurance that current programs or policies would continue.

The implication for viewers of `Olelo, Akaku and the other public access TV providers is that whatever entity wins the bidding process will replace the current providers. There is no provision in the current draft RFP that would provide identical services or guarantee free speech rights, and it has specific sections that disadvantage current public access providers from winning future contracts, which could change hands every three years. The disruption caused by the open-bidding process has also been a subject of community opposition

The PPB decision must be placed in context. Congress passed its legislation as a benefit to the people, not to the state government. Funding for the channels comes from the cable companies, not from the state budget. This is one of the arguments against imposing the state procurement process onto the awarding of public access contracts--no state money is involved, and no goods or services are purchased by the state. Additionally, the PPB reached its decision after a number of meetings at which quorums were not present, and after an irregular secret meeting lasting longer than two hours was held on October 5, 2006.

Yesterday's meeting and reconsideration of the petitions came about as a result of the violations of the state open meetings law in previous meetings. Some of those who voted yesterday did not hear the lengthy public testimony. Even at yesterday's meeting, some Board members continued discussions among themselves even during an announced "bathroom break" recess during which the public and even their own attorney were not present in the room.

Public testimony (as recorded in PPB minutes) was overwhelmingly against the decision that the PPB finally made by denying all of these petitions. At yesterday's meeting, no one present testified in favor of sending the contracts out to bid.

[The Hawaii public has consistently supported the current public access providers. At the September 22 and October 5, 2006 PPB meetings, 166 people provided testimony and only approximately one person testified in favor of the RFP. At meetings held during February 2006 statewide, over 1,200 people sent in written testimony and only about 35 of those favored the RFP or were not satisfied with current services. In an older (1995) survey of cable subscribers, over eight in ten viewers surveyed viewed then current access programming as valuable to the community.]

Public policy background

Congress passed the Cable Communications Policy Act of 1984 which permitted the cable franchising authorities in municipalities or states to provide public access channels (also called PEG channels, for "Public", "Educational" and "Government"). These channels were to be used to provide programming for local audiences, including ethnic, cultural, social, religious, or political material that would not be found on commercial channels or even on public broadcasting stations (such as PBS).

The legislative history states that
Public access channels are often the video equivalent of the speaker's soap box or the electronic parallel to the printed leaflet. They provide groups and individuals who generally have not had access to electronic media with the opportunity to become sources of information in the electronic marketplace of ideas. PEG channels also contribute to an informed citizenry by bringing local schools into the home, and by showing the public local government at work.
Hawaii's Legislative Reference Bureau (LRB) interpreted this language to mean that
there are two beneficiaries of PEG access: the individual speaker, who has a forum for the speaker's ideas, and the community, which will receive access to a diversity of viewpoints.
This supports claims by opponents of the RFP process that public access channels are not goods or services which benefit the state.

Hawaii established its public access services in the late 1980's with the advice of consultants in the field. The Mainland experts helped the community to set up organizations which (1) operate the public access cable channels, (2) provide facilities and equipment, (3) train ordinary people and community organizations to produce programs and use the facilities and equipment, and (4) provide support services including marketing and promotion of the channels and programming to the viewing public. That the experts did their job well is reflected in the high level of satisfaction expressed in surveys.

The PPB has not sought expert advice in making its decision. At yesterday's meeting, they seemed to be guided by an often-repeated mantra that "competition is good." Unfortunately, this is one situation where competition means disruption and disassembly of the work that has been put in to developing the system over the years to the point where it is working well for the public.

Political influence on public access television

In a 1995 report, the LRB found that
... In Hawai'i, the State has an unusually high degree of involvement with its access organizations.

and that
The State could help by ensuring that undue political influence and special interests do not interfere with the creation and implementation of PEG access public policy
Instead of following the LRB recommendation, by putting the public access TV contracts out to bid, the Lingle administration is privatizing services and opening them up to political influence.

It appears that part of the motivation may be the same as has been alleged during the turmoil last year on Maui: Akaku was attacked and lost its executive director, a well-known advocate of open access to the media. It was alleged that moneyed developers objected to the broadcast content. If these or other special interests wanted to put together a bid, they have extensive resources to do so. What they failed to win last year they could receive as a gift from the state.

It's not unusual for a state or city to bias the bidding process in favor of a particular outcome (or even a particular vendor) through the devilish details in the bidding document--the RFP. DCCA's draft RFP shows signs that it is strongly biased against the current public access providers. Since the draft RFP is not the final document, it remains to be seen whether adjustments will be made to level the playing field.

For example, one section of the RFP would take the current provider's assets and give them to the winner of the contract. But the state does not own these assets since they were not purchased with state money. In fact, the providers have done extensive fundraising to make ends meet. The DCCA itself urged the providers to raise their own funds. DCCA's Decision and Order No. 174, October 2, 1995 explicitly encourages access organizations to seek other funding strategies. So the state cannot claim those assets to give to an unrelated company. At least, this can result in litigation that will cost taxpayers money in the end.

Another provision of the contract requires DCCA's approval for outside fundraising, which is contrary to their own order and could reduce services particularly on Neighbor Islands where the cable franchise fee is not sufficient to provide an adequate level of services.

But the most biased provision of the RFP is the one that prohibits the providers from using their own staff or resources to prepare a response to the RFP itself. This provision would seem to exclude the current providers from winning a contract at all, and has at least the appearance that it is politically motivated.

Other provisions would severely cut back on public programming, training and services because it would channel funds to provide services to the government itself (the "G" in PEG access). The present balance between P, E, and G which preserves the public component would not be possible, to the detriment of both the producers and viewers.

With public testimony against the bidding process and producer and viewer satisfaction at very high levels, it is hard to avoid concluding that there could be a political motivation behind the administration's action against the current public access television providers.


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