Comcast and RETN reach temporary funding solution2/26/09

Feb. 26, 2009

By Tim Simard

Observer staff

Cable customers in the Champlain Valley will continue to receive broadcasts of School Board meetings and other educational coverage on channel 16 for the short term, although an unresolved contract dispute leaves an uncertain future for the station.

The Regional Educational Technology Network, known as RETN, has been at odds with Comcast — the nation’s largest cable television provider — over RETN’s bookkeeping practices and financial reports. In November 2007, Comcast did not renew its contract with RETN South and has since asked Vermont’s Public Service Board to suspend its contract with RETN North.

The two parties met with the board on Monday in Montpelier for a pre-hearing on how litigation might develop.

RETN South comprises Charlotte, Ferrisburgh, Hinesburg, Shelburne and Vergennes, while RETN North covers Burlington, Essex Junction, Essex Town, South Burlington, St. George, Williston, Winooski and a small part of Colchester.

Monday’s meeting with the Vermont Public Service Board was a pre-hearing regarding the contract disputes between Comcast and RETN, but also served as a time for both parties to agree on an interim funding agreement that will allow channel 16 to continue operating. Comcast funds much of RETN’s programming, paid for through cable subscriptions. By law, Comcast has to allocate some of its programming for local content. The company is still paying RETN South based on its old contract.

The interim agreement would have Comcast pay half of the $500,000 it had allotted for RETN for 2009, with the rest of the money coming in quarterly payments later in the year pending the results of an audit. With approval from RETN, Comcast is scheduling and paying for an audit of the station’s capital budget and business expenses.

“The agreement is a temporary solution while the audit is going on,” Comcast’s Community and Public Relations Senior Director Kristen Roberts said Tuesday.

Comcast saw this as a step in the right direction in regards to the dispute.

“We’re very encouraged to see positive steps being taken, and the audit will continue along that path,” said Comcast’s lawyer, William Dodge of Burlington-based Downs Rachlin Martin.

RETN’s representatives, which included the station’s executive director Scott Campitelli, public relations associate Doug Dunbebin and lawyer Doug Marden of Burlington-based Little & Cicchetti, were not pleased with some of the interim measures, but agreed to them on the principle they would be temporary. Of particular concern were demands that RETN must seek Comcast’s approval for any capital expenditure over $4,000 and must provide bank statements and monthly reports in a timely fashion.

Dunbebin said after the hearing that any decisions on capital expenditures should be signed off with RETN’s Board of Directors, not Comcast. He said these changes usurped the authority of the board, which consists of residents from the towns served by RETN.

“They’re an outside organization and should not approve or disapprove a capital expenditure,” Dunbebin said. “However, we have agreed to these significant, but temporary concessions to ensure the important services we provide the community continue uninterrupted while this process moves forward.”

The interim agreement was scheduled to be submitted to the Public Service Board by Friday, after a few minor changes were made.

The pre-hearing came about after Comcast filed its petition with the Public Service Board to suspend the contract with RETN North. Comcast charged that RETN had inconsistent and incomplete accounting reports and was frequently late with documents requested by the cable company. The questionable accounting practices breached the RETN North agreement with Comcast, the cable company said in its petition. The contract ends in 2011.

RETN countered that it had worked with Comcast and improved its accounting and bookkeeping procedures starting last year. The local station also denied many of Comcast’s claims about incomplete and inconsistent reports. It also said staff members did not receive detailed instructions on what Comcast wanted to see for financial restructuring.

“The measures proposed/requested by Comcast are draconian, expensive and unnecessary,” RETN’s counter-statement reads.

Marden told the Public Service Board that RETN would be filing its own petition against Comcast in regards to a breach of contract, although Dodge and members of the board believed it would be best to wait until the results of the audit were completed.

“We want to keep pressure on Comcast to get the contract negotiations going,” Marden explained.

Dodge said the audit would likely be completed by May, when a status conference could be scheduled with the Public Service Board. Dodge said the outcome of the audit would determine if RETN has other financial issues about which Comcast should know.

“Until the audit, we don’t know what our next step will be,” Roberts said.