Friday, January 25, 2008


What happened at the Akaku hearing yesterday

by Larry Geller

I wrote Wednesday that Akaku's motion would be heard on Thursday in its ongoing challenge to the state's plan to put the public access television contracts on each island out to competitive bidding.

This should concern us all, because (among other problems) the state isn't requiring a potential contract winner to have any public access experience, only TV experience. So a subsidiary of Fox News, for example, could win a contract in Hawaii.

There was a Maui News story, but what happened, if I understand it correctly, is that Judge Joel August continued the motion until the state comes up with some rules on the bidding process. He did not rule on whether the state's decision to put the current contracts out to bid was lawful or unlawful, and in fact, they don't have to make rules that adopt procurement, they just need to get some rules.

Now, if the state comes up with rules, which they are working on, then as I understand it, part of the motion becomes moot and probably that's the end of it. I'm not sure about this, though no doubt the attorneys are clear on it. I'll find out more if I can.

For those who (like me) are concerned but confused about different actions to preserve public access television, I would like to recap that the process seems to have been rigged from the get go. A vote was taken after a secret meeting held without public notice. After 2 hours 12 minutes of some kind of secret discussion, a vote was taken that flew in the face of the testimony of hundreds of people. Why take public testimony when the plan is to ignore it?

A lot more can be said. I'm not sure what the public can do at this point—what can be done when open meetings laws are ignored, the OIP has taken no action on it, and public testimony is cast aside in favor of a clearly political decision?

It feels to me like we're getting screwed by the state on this.


I'm not following this as closely as you (and others) are, Larry, but won't the people of Maui STILL be able to produce their own programming using equipment and facilities provided by the PEG contractor? Even if Fox, to use your example, were to win the bid, I don't see how it follows that any particular viewpoint would suffer censorship on the station. On the other hand, if Fox acolytes wanted to produce shows on Akaku right now, they could (and maybe they are?).

I'm truly confused. Where's the beef?

First, one has to go back to the attack on Akaku that resulted in loss of some funding and their executive director, Sean McLaughlin. That was complicated enough, and it was alleged that a developer who didn't like Akaku's programming was largely behind it.

But Akaku continued. Now this.

Olelo has extensive facilities and several satellite facilities. They've invested in infrastructure and training programs. It's not clear that assets held by Olelo pass on to the next contractor. Imagine the disruption of a 3-year contract cycle on continuity of programming, training, outreach, and production.

The RFP process is biased against the current contract holders. In the original document it was explicit (and I think it's still in there) that they may not use current facilities or manpower to create and submit their own application for the new contract! This puts the vendors with the most experience at a severe disadvantage. Also, the RFP doesn't require PEG experience.

That's the fear that some North American company might win, just by investing several thousand dollars to prepare an attractive bid. Time Warner might want its channels back, or another broadcaster might want an entree into the Hawaii market, with all those channels. They'd be big, big, big here, and they could choose their programming and have their own biases. Even a religious organization could win the bid.

There are always those who think public broadcasting (radio or television) should be done differently. It's the nature of the beast. One task that current provider have nationwide is to balance damands and interests with funds and available channel time. Most vendors have mastered this and contracts are generally long-running.

It would be a shame if developer/government interests are allowed to break up a system that works fine at present, and is beholden to neither government nor special interests.

Disrupting public access television may be part of the plan. A shakeup every contract cycle is as disruptive as one can get.

There are other issues involved, and comments are probably not the best place to discuss them. One that I am hot on is that the funds involved are not public funds in the sense that they are apportioned and spent on, say, a maintenance contract or for equipment, facilities or other services. It's money paid by the cable carrier for PEG services, and cannot go to the state for other purposes.


I think the proper analogy is the cable operator's franchise. The cable operator only has to apply for a franchise every eight to twelve years (and subsequently can get extensions that go on for another decade). Then, there are clear consumer based reasons why a franchise can be terminated early, modified before term, etc.,. However, the cable operator isn't left with the uncertainty of having to renegotiate the terms of its franchise every year or every three years.

Similarly, by making PEG access organizations subject to the competitive sealed bidding process, it strips any benefit to long term designation -- investment in social capital, investment in community education, etc.,.

Most businesses make capital improvements, staff training, products and services available to the public based on business models that vary in time. Like the cable operator, the greater uncertainty the higher the overhead, the less "extra."

In this case, an annual RFP or a three year RFP would require the contractor to produce a business model that had as its certain term 3 years. This may provide enough for bare bone television station operation and accepting of the public's programming to be programmed. However, there are threshold funding requirements to run a television station -- they go higher as the amortization period is shortened. Maui, Kauai and the Big Island don't have very much disposable income to spend on producer education, equipment repair, community involvement. If they are forced to create a business model on three years making expenses repaid in those three years (as opposed to 8 or 10 or in perpetuity subject to standards for revocation), the small percentage left for the extras that bring meaning and life to PEG access on the neighbor islands disappears.

It may be hard to understand given the fact that Olelo seems to be so cash rich and is capped. However, there are minimums required to run a television station. That coupled with having to plan the business model on short depreciation/expense amortization periods sucks up every last available dollar for non-community-benefit necessities.

Another way to think about it is the difference between a 15 and 30 year fixed interest mortgage. The monthly payment on a 15 year mortgage is significantly higher than a 30 year one -- even though at the end of both, the 15 year has saved money. More resources have to be put to paying the mortgage in the 15 and the savings accrue at the end of the mortgage. However, unlike the 15 year mortgage, the running of a television station will have to be rebid every 3 years.

Line of flight, thanks very much for your insightful explanation. You've brought clarity in your explanation that I could not get close to.

I would love to have something like your detailed comment for the website.

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Requiring those Captcha codes at least temporarily, in the hopes that it quells the flood of comment spam I've been receiving.

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