October 9, 2003

Galaxy Cable Comes Under Fire At October City Council Meeting

Representatives of Galaxy Cable came under fire for outages, customer service and a number of other issues at the October 2 meeting of the Memphis City Council.

The company was present at the meeting seeking an extension of a franchise agreement with the city to provide cable television service to the community.

The city council proved reluctant to enter any long-term agreement with the corporation because of concerns raised by constituents.

One issue raised by a customer in attendance at the meeting was the outage of the Public Broadcasting Service (PBS) station.

Pam Glasgow asked why the PBS station had been off the air from January 6 through February 30 and more recently had been replaced by Discovery Kids channel.

Justin Taylor of Galaxy Cable explained that the station had been off the air because of a conflict in digital signals being transmitted locally. He indicated that the signal being sent out by KTVO television was broadcasting on the same spectrum as the old PBS station, causing it to be blocked out. He noted it was an issue across northeast Missouri and southeast Iowa and not just in Memphis.

Taylor continued to explain that his company reached a temporary agreement with an Iowa PBS feed to return the public broadcasting service to local viewers. The return was short lived however as the national PBS feed was lost when the national broadcaster lost its satellite causing a nationwide outage for PBS.

He noted that Discovery Kids channel was simply a fill in as some programming was preferred to a blank channel. Taylor indicated the issue had been resolved and the company had reached an agreement to return the PBS feed for customers.

“When you have problems like this customers would really appreciate it if you communicated with us,” Glasgow said. “We have a local radio station and a newspaper you could use to let us know what’s going on.”

Taylor agreed that the company needed to improve its public relations, particularly in communicating during situations like this.

Alderman Mike Stone told Taylor that he has received several complaints from voters regarding the fact that cable charges continue to increase without any significant service improvements.

The company representative responded, telling Stone that Galaxy recently resurfaced from bankruptcy and has improved through restructuring of the corporation.

“It’s no secret we had our share of problems before,” Taylor said. “But we are now owned by a different operating company that has streamlined the business and eliminated a number of our smaller service areas to allow us to focus on our current customer base.”

Chuck Kigar, another citizen present for the meeting asked if the company is planning any service improvements or added services.

Taylor said the customer base in Memphis is not high enough to warrant offering high-speed internet service.

He also noted that the corporation is trying to secure funding to eventually replace the existing cable system in Memphis to a new digital provider.

Taylor estimated the project would cost as much as $600,000 and stressed that a long-term agreement with the city was imperative for the company to have to seek the capital financing for such a plan.

“I don’t want this to sound like a threat but the draw back of a short-term agreement is that there will be no way we can take this idea to a banker and get funding to install new service for a community where we only have a one-year contract,” Taylor said. “The minimum we will need to be able to do this is a five-year agreement.”

The current system has been in place in Memphis since 1981 when the city signed the original 15-year franchise agreement. A five-year extension was later signed with the company but expired at the end of September.

Despite the number of issues Taylor did point out that Galaxy numbers had only witnessed a small decline over the past five years, dropping from 330 customers to 295 in Memphis.

He also noted that since the restructuring of the company that the number of trouble calls had dropped by 1/3.

Taylor highlighted the fact that since 1996 Galaxy has added 12 channels to its service and over that time rates have increased only eight dollars over those seven years.

Despite Taylor’s presentation Alderman Ron Gardner stated he was not willing to enter any long-term agreement with the company.

“I tell you I’m not ready to renew this contract tonight,” Gardner said. “I’ve been on this council for seven years and for seven years we’ve been having these same problems with our cable service. What can you do to guarantee these problems are addressed?” he asked Taylor.

Taylor responded that he definitely could not guarantee a system upgrade. He did point out that the agreement does provide the city with a definite revenue source and also noted that it is a non-exclusive agreement meaning any other cable provider could still open up shop in Memphis and begin serving the community.

Gardner said the city definitely does not want to take over the antiquated cable system and added that no other company was likely to come to Memphis.

City Attorney David Peppard pointed out that the city could approve a one-year franchise agreement and at any point during that period could offer an extension if the council felt the company was doing a good job resolving the problems.

After further discussion the council voted 4-0 to renew the cable franchise with Galaxy Cable for a period of one-year.

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