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Bad Connection

Jana Freiband

When Steven Clift isn't online, chances are he's traveling. The Minneapolis-based Internet strategist is in demand as a speaker in places ranging from New Zealand to Northern Ireland. He also works with the New York-based Markle Foundation to create a national 1998 online election project called "Web White and Blue," and on another initiative called "E-Mail for All."

Much of that work, Clift says, could actually be done from the comfort of his southwest Minneapolis home--if he had a broadband Internet hookup for things like online videoconferencing and lightning-fast access to complex Web sites and databases. "I'm hoping to make myself available to colleges, universities, and conferences, through the Internet, around the world," Clift says. "What I need is cheap and competitive access to high-capacity connections. Every second I spend waiting for something to download is a second I'm losing for activity."

That's why Clift is thinking of bugging out to St. Paul. There, cable TV provider Media One has just unleashed cable-based Internet service. For less than $50 a month, customers get to use their TV cable for data transmission at speeds ranging up to 4 million bytes per second. Compared to familiar dial-up modem data speeds of 28,800 and 56,600 bytes per second, Media One is offering nothing less than digital hyperdrive.

Clift can get broadband access in Minneapolis today, but only if he is willing to pay a phone company anywhere from $1,000 to $2,000 a month for a megabandwidth T1 phone connection, and then only if he can afford to pay the phone company's cost--roughly $2,500--of extending the connection into his apartment building. He can perform some high-bandwidth Internet functions using the scaled-down ISDN phone line to which he already subscribes, but that costs him more than $100 a month. "Basically, I'm a small business with increasing bandwidth needs," Clift muses. "So if in St. Paul there's going to be the level of access that Media One provides, that becomes a much more attractive place to live."

Clift says he's willing to wait about a year for the situation to change before he breaks out the apartment ads. But if 13th Ward City Council member Steve Minn's assessment is correct, Clift may want to begin shopping right now.

Minn, the ranking member of the Transportation and Public Works committee, is known as the council's chief gearhead, the one member who has absorbed information technology into his bloodstream. He says an ongoing negotiation stalemate between the city and Paragon means Minneapolis is unlikely to see the kind of cable-modem technology Clift wants anytime during the next two, perhaps three years. "It absolutely panics me when I think about putting the city on a competitive [digital] playing field," Minn says. "If our downtown core can't compete on high-speed Internet access, that's bad."

So why doesn't Minneapolis receive the same high-bandwidth service from its cable franchisee that Media One offers St. Paul and eastern suburban residents? To understand that, you have to understand why the city and its cable contractor, Paragon Cable, have been locked for the past four years in a paralyzing, high-stakes squabble over the value of something that, as yet, does not even exist.

When Minneapolis signed its first cable franchise agreement in 1982, the city got a sweet deal. It was one of the last major American metropolises to award a citywide franchise, and companies were scrambling to woo its business. The winning bidder, Rogers Cable TV, not only offered cable with a capacity of 120 channels (most cities at the time had 56), but agreed to hand over fully 25 percent of that overall capacity--30 TV channels--to the city for public-access use.

Much has changed since then. In 1989, Rogers Cable TV became Paragon Cable, and Paragon has subsequently undergone several ownership changes; in 1995 it became a Time Warner Inc. subsidiary. More importantly, in those 16 years digital communications technology has exploded, positioning cable companies for a massive expansion of their business. The fiber-optic lines replacing the old copper wires can be converted to carry almost any kind of data, and to do it both ways--from subscriber to network, as well as vice versa.

If Paragon replaces its Minneapolis copper cable with fiber, the system could suddenly carry 600 channels or more, with the city's 25 percent share ballooning accordingly. In addition to public-access TV, the city could begin offering Internet-only public-access radio stations, or multimedia Web sites. It could sponsor interactive videoconferencing panels between city officials and the city's wired residents. Not to mention the value of those channels as a leasable commodity. In short, fiber could give Minneapolis's cable share enormous value, says city cable officer Edie French.

But fiber may not happen unless Paragon gets a new franchise agreement. City and Paragon officials have been trying to renegotiate their deal--which expires in 2004--for at least four years. The negotiations stalled last August when Paragon showed little interest for a city offer to lease some of its unused channels to the cable company.  

What Paragon wants, French says, is for the city to abandon the concept of "capacity," and limit its control over the franchise to a certain reduced number of TV channels. The cable company has argued that the negotiators who wrote the original agreement, at a time when the World Wide Web was barely a gleam in a programmer's eye, had no idea what the capacity language would one day mean. But French disagrees: Early-'80s city planners "had some anticipation that this was something of value. It's like one of our city parks. It may not be used for commercial value, but that doesn't mean that if somebody else can make more money off of it that we say, 'Okay, here, fine, you can have this.'"

After a year's hiatus, the city and Paragon have gotten back together for a series of meetings that began in mid-August. A September 15 status report the negotiators filed with the City Council outlines both sides' wish lists. The city wants the cable company's help in developing a "Government Information Network," a souped-up version of the current city cable channels. It is also asking Paragon to provide extra help to Minneapolis's nonprofit cable operator, Minneapolis Telecommunications Network (MTN). For its part, Paragon wants to ditch a requirement that it carry FM radio transmissions on some of its channels.

The report doesn't mention money, but French indicates that that remains the big issue. "We haven't put down a final value for what we think our cable capacity is worth," she says, "but we know there is a value. We're in the process of determining what that is and ways the city could be compensated for giving up that asset."

Kim Roden, Paragon's vice president for public affairs, says it is too early to talk about the state of the present talks, or discuss Paragon's stance. But an August 10 St. Paul Pioneer Press article about the Media One Internet experiment indicates Paragon's position. In it, Roden bluntly suggested there will be no upgrades until city officials modify their stance. "No one will touch that (Minneapolis) system unless something changes," Roden told the newspaper.

Caught in the middle of all this--aside from bandwidth-hungry Internet users--is MTN. The organization provides public-access television to Minneapolis and also serves as a basic dial-up Internet service provider to nonprofit groups. Which is to say, it has very little money. And, according to MTN director Pam Colby, it won't get much more unless the city swaps some of its cable capacity for much-needed cash.

Already, Colby says, the snail's pace of negotiations between the city and Paragon over the last two years has cost MTN an opportunity to combine its two facilities at Plymouth Avenue North and St. Anthony Main into a single operation. And if Paragon and the city don't come to terms, Colby says, MTN will not be able to refurbish its antiquated equipment. "We need to figure out where we're going," Colby says. "A lot of our equipment is at least 10 years old. What we need from these negotiations is, in exchange for some channel capacity, some cash so we can continue to fulfill our mission."

Minn, for his part, argues that by holding fast to its stance on capacity, the city is making a "worthless argument." Already, he maintains, the city's demand for public-access programming is sated. "Right now, [the city has] however many channels of shit that we're programming," Minn says. "Ten, 15, 20 more channels of new shit isn't necessarily going to improve our public relations or our ability to communicate with our constituents." As for MTN, he scoffs: "Frankly, the technology, capacity, and interactivity of the market competition is far more important to the future of the city than where MTN plays back its tapes."

As time goes by, Minn says, the situation is growing desperate. While Paragon and the city talk possibilities, the telephone company US West--the corporation that spun off Media One after absorbing former St. Paul cable provider Continental Cablevision--is busy laying fiber-optic cables in downtown Minneapolis, creating what could become a monopoly on high-speed Internet access in the city's core. There have also been reports of a potential partnership between US West and Media One that would cover most of the metro area. If that develops, it will leave Minneapolis competing with suburbs that could woo office tenants and residents with not one, but two fiber-optic providers--US West/Media One and Paragon, which has committed $25 million to $30 million to system upgrades in places such as Eden Prairie, Bloomington, and Edina.  

"Given the commitments that Paragon has made these other jurisdictions, it is unreasonable to think that we could hope to fully digitize and expand the Minneapolis system until the year 2001," Minn says. "We have dithered and dallied for two years at the expense of gaining a competitive advantage on our existing cable system."

Clift strikes an even more sour note. "It's not so much that we have lost the upper hand, it's that we've fallen behind," Clift says. "It's time to call the moving trucks."


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