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LIBRARY

Michigan State
University

 

ABSTRACT

THE FEASIBILITY OF CABLE TELEVISION
IN GRAND RAPIDS, MICHIGAN

By

Thomas M . Girocco

The Federal Communications Commission in recent
months has elected to alter existing rules so as to permit cable
television to expand into the top 100 (by population) television
markets. By instituting this rule change the Federal Communi-
cations Commission will open the door to a largely unexplored
market. With the exception of a few isolated instances, there
is no cable television in the communities inhabited by the vast
majority of the American people. This condition exists due to
former F'.C.C. rules that limit the development of cable television
to those markets with a definite reception problem, one either of
quality or selection. As cable television showed that it could
provide diverse and specific programming not universally available,
the Federal Communications Commission began to change its point

of view and instead of protecting over-the—air television stations,

decided to partially open the top 100 television markets to
additional cable development. Although farkfrom wide open, the
new rules appear to make cable television viable in these top
100 television markets.

This study was designed to determine the feasibility of
a cable television system in one of these new markets, specifically,
Grand Rapids, Michigan, the American Research Bureau rated
37th television market. The study includes research on the
peOple, the businesses, the government and generally all that
makes up the market. This information is coupled with data
gathered in a two-phase interview process, then tempered with
rules and regulations, both local and federal, to culminate in a
conclusion and plan of action.

Data gathered leads the author to the conclusion that a
cable television system in Grand Rapids is indeed a sound business
proposition. Surveys conducted indicate a high rate of acceptance
for a hypothetical system built along guidelines prescribed by
the Federal Communications Commission in the new rules.

This acceptance is brightened by the general dissatisfaction
measured when interviewees were questioned about programming

currently available. These and other positive factors and data

on construction and growth of cable systems supplied by Time-
Life Cable Television, Inc., indicate that a. Grand Rapids system
would be feasible and could become profitable in the third year of
operation. This goal could only be reached, however, under a
system of carefully planned development, with a high degree of

coordination between construction and marketing.

THE FEASIBILITY OF CABLE TELEVISION
IN GRAND RAPIDS, MICHIGAN
By

Thomas M . Girocco

A T H E S I S
Submitted To
Michigan State University

In partial fulfillment of the requirements
for the degree of

MASTER OF ARTS
Department of Television and Radio

Accepted by the faculty of the Department of Television
and Radio, College of Communication Arts, Michigan State

University, in partial fulfillment of the requirements for the

/' , //7 " 7
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Director of Thesis \A

Master of Arts degree.

 

ii

TAB LE OF CONTENTS

Chapteri.........

Chapter2.........

Chapters. . . . . .

iii

Table
Table
Table
Table

Table

LIST 0 F TAB LES

Income By Households.........
Expenses.....................
Capital Costs.................
Salaries ...... .....

Fixed COStSooooooooooooé oooooo

LIST 0 F FIGURES

Figure 1, Dwelling Unit Income Map.. ..

Figure 2, Distribution System Map. . . . .

iv

14

7O

APPENDICES

Appendix A, Cable Television Questionnaire. . . . 88
Appendix B, Cable Television Fact Sheet . . . . . 89

Appendix C, Community Leadership Survey
Questionnaire 90

Appendix D, Rate Schedule ....... . 91, 92

INTRODUCTION

Cable television, since it was conceived early in the 1940's,
has been an industry devoted to the "have not" television markets.
Where there was a geographical reception problem, crude community
antenna systems sprung up to provide residents with a semblance
of good reception and selection. The next area of development
was in those communities adjacent to the top 100 television markets,
where residents were not within the coverage area of one or more
ofthe national networks. This need was further refined in the
mid-60's to include those areas that desired the services of
distant independent and educational television stations. As the
industry grew, the systems provided more services until the
limits of possible growth were restricted by a 1968 Federal
Communications Commission decision to prohibit a cable television
system in the top 100 television markets from carrying any TV
signal that was not already available in the market. This
restriction was conceived with the idea of protecting free "over
the air"television . In the early 70's the Federal Communications
Commission began to reconsider this move, and in the summer

of 1971. proposed a rule change. This study was taken on in

anticipation of these proposed "new rules" which if passed would
allow cable television to become viable in the top 100 television
markets. At this writing, these new rules are expected to become
effective early in 1972.

In order to determine the feasibility of cable television
in Grand Rapids and area, an in—depth study was performed to
test the variables that would contribute to the ultimate success
of such a system. The techniques involved were "hard" research
on the market, interviews with the populace and community
leaders, and investigation of local and federal rules and regulations
that would actupon such a system. The study concludes with

an economic projection and a systematic plan of action.

Special Note

 

Due to unavoidable delays in completion of this work,
there is repeated reference to "proposed" F.C.C. Rules.
As of the completion of the paper, the Rules have been made
essentially effective as of March 31, 1972. There 'was,
however, a 30-day period for filing of comments, and as of
thesis completion the F .C.C. is considering these filings
and some modifications may be made. The status of
copyright is still uncertain as final legislation has not yet

been enacted .

CHAPTER 1

This section of the study is one of fact finding for
purposes of acquainting the researcher and subsequent readers
with background on the area. In an effort to present the
material in a clear and concise manner, a modified outline
style was used. This will provide the reader with precise
access to the data initially and ready reference later on

in the conclusion forming sections.

Sources of information for this chapter were:
West Michigan Tourist Council
Grand Rapids Area Chamber of Commerce

Cities of Grand Rapids, East Grand Rapids,
Wyoming and Kentwood

Bureau of Census 1970
Grand Rapids Area Council of Churches

Grand Rapids Area Directory of Manufacturers,
1970 - 1971

C'l

HISTORY

 

The Hopewell Indians are the oldest known Indian tribe to live
in this area. They were found to inhabit Kent County from 300 8.0.
to 800 A.D. They are famous for their mounds, which were used for
places of burial and religious and ceremonial purposes. Artifacts
uncovered during excavation gave evidence that the Hopewells engaged
in heavy trade with the neighboring tribes. Items were found which
were made by other Indians near the Gulf of Mexico, and gave an
indication of the vast trading relationship between tribes.

The Hopewells were forced to leave when the Ottawa Indians
moved into this area. They got along well with the early French
missionaires and trappers; this helped pave the way for a good
relationship with the early settlers.

Rix Robinson was the first permanent settler in the area.
He arrived in 1821 and proceeded to establish trading posts along the
Grand River. One was located two miles west of Lowell and the other
one at Ada. The area was to continue to be a trading center as
furniture manufacturing became an important industry in the later
1800's. Because of the early manufacturing development it naturally
followed that the "support" businesses would also thrive. The

development of banking, legal counseling, machinery manufacturing

and marketing and advertising was therefore quite natural and con-
tinues to this day.

The recreational, social and cultural needs of this "service
center" type of city were well met and kept pace with economic
growth, making Grand Rapids a well balanced community in terms

of satisfying internal needs as well as providing services.

GEO GRA PHY

 

Grand Rapids is located in the southwestern portion of the
state on the Grand River. It is 147 miles west-northwest of
Detroit, 172 miles northeast of Chicago, and 30 miles from the
eastern Shore of Lake Michigan. It is well situated to serve as
a sales and distribution center, and provides goods and services
to the tOurist industry of Michigan. The city developed on the
banks of the Grand River, with business and industry occupying
the waterfront area, and residential development spreading up the
hillsides of the valley. The hills, streams, woods, and nearby
wildlife make the area a pleasant residential communiw, a factor

that enhanced the potential for economic growth in the area.

PO PU LATION

 

History notes that Grand Rapids has experienced a rather

substantial but erratic rate of growth. The only exception to this

occurred during the decade of the thirties, when, reflecting the
national trend of a Sharply curtailed birth rate, only a token increase
took place.

In 1950, the cities and villages of Kent County contained
approximately 68 per cent of the total population, while in 1960
this percentage had risen to almost 80 per cent. During this
decade, however, there still was a movement of residents to the
suburban, less developed regions near the more densely populated
areas. The apparent increase in urbanization is due primarily
to the incorporation of two townships into cities, as well as
annexations by the City of Grand Rapids. Those townships near
and adjacent to Grand Rapids experienced higher percentage population
increases than those located further from the city. This growth
has occurred in all directions, but generally the greatest proportion
has concentrated south and west of the developed area. Industrial
expansion, good roads, and increased auto ownership have contri-
buted to this movement.

The county's non-white population numbered 15,336 in 1960
representing an increase of 8,110 or 112.2 per cent over the 1950
non-white population of 7,226.

As of 1970 the non-white population had increased to just

over 35,000, with the majority of this segment concentrated in

the city of Grand Rapids.

PO PU LATION (Continued)

 

Numbers

_C_3_i_t_y_

Grand Rapids
East Grand Rapids
Wyoming
Kentwood

Age Profile

 

Under 5 years

'5 — 14
15 - 24
25 - 39
40 — 54
55 - 54
65 - 74

75+

Total

 

198,000
12,555
55,550

20,310

« Racial Profile of Non-Whites

Negro
Indian
Chinese
Japanese
F iliphino
Other

Non-White

 

15'%
.1'%
2 79

2%

111%
211%
191%
16'%

16%

97.3%
1.4%.
.3%
.4%.
.2%
.3%.

 

 

Homes/
Homes Street Mi.
68 , 000 1 12
3,700 79
30,794 158
5,200 62

10

PO PU LATION (Continued)

 

Religious Profile

 

Churches in Greater Grand Rapids Area

 

Denomination Number

 

Assembly of God 7
1 Baptist 67
Catholic 42
Christian (Disciples of Christ) 2
Christian Reformed
Church of the Brethren
Church of Christ (Christian)
. Churches of Christ (Non—Instrumental)
Church -of Christ, Scientist
Church of God (Abrahamic Faith)
Church of God (Anderson, Ind.)
Church of God (Cleveland, Tenn.)
Church of God in Christ (Memphis, Tenn.)
Church of the Nazarene
Congregational Christian
Episcopal
Evangelical Free
Independent Fundamental
Jehovah's Witnesses
Jewish Congregational
Lutheran (Latvian)
Lutheran (Lutheran Church in America)
Lutheran (Missouri Synod)
Methodist
A.M.E.
A.M.E. Zion
Free
United 38
Orthodox 4
Penetecostal 5
Presbyterian 1 0
Reformed Church in America 51
Reformed (Netherlands) 2
Reformed (American) 1

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11

, PO PU LATION (Continued)

 

Reliigious Profile

 

 

 

Denomination Number
Reformed (Protestant) 5
Reorganized Chruch of Jesus Christ

(Latter Day Saints) 3
Seventh Day Adventist 5
United Brethren 8
United Church of Christ 20
United Holiness
Wesleyan Church 8
Miscellaneous 42

Total 523

(Includes some churches not in Kent County)

Gross numbers of people affiliated with churches
are impossible to determine due to varrying definitions

of affiliation .

Educational Profile

 

The latest census figures indicate the area to be
high in educational attainment with 63.6% of the
male residents having some high school, and 40.2%

having a high school education or more.

12

PO PU LAT ION (Continued)

 

Occupational Profile

 

The 1970-71 Manufacturers Directory of Metropolitan
Grand Rapids lists 950 manufacturing firms doing
business in the area. 1 Industry in the area is quite
diversified, ranging from heavy metal manufacturing,
through light and technical metal work to high grade
woOd craftsmanship; also food and paper. Approximately
36 per cent of the total work force is employed in
manufacturing, leaving the remaining 64% in the
professions, and in support businesses such as whole-

saling and retailing .

Income Profile

 

The Grand Rapids area presents a large middle
income group. With median annual income at $10,524,
64.3% of the households earn between $5,000 and
$15,000 each year. The following pages indicate
exact percentage categories and geographical

distribution.

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PO PU LAT ION (Continued)

Crime Profile

15

Comparative Crimes By Counties in Mictggan ‘69

County 81
Population

 

Ingham
256,567

Kalamazoo
199, 288

Kent
408,232

Macomb
619,164

Oakland
900, 671

Murder

31

16

32

Rape

 

57

41

86

123

169

Robbery

188

94

286

358

782

Crimes Per
1000 Persons

 

34.6

20.9

22.5

23.2

27.1

16

 

POPULATION (Continued)

Cultural Facilities

 

Kent County Library
Administration, Bookmobile and School Service

Grand Rapids Library - Ryerson Library
Administration, Bookmobile and School Service

Calvin College Fine Arts Center - 1000 seat auditorium
designed specifically for music and drama.

Circle Theatre - organized in 1952 to present arena-type
productions.

Grand Rapids Community Concert Assn. - Non-profit
organization formed to offer best in orchestra,
ballet and music.

Grand Rapids Public. Museum - Exhibits art works and
maintains permanent exhibits of period furniture,
costumes, etc. Includes planetarium.

Grand Rapids Symphony Orchestra - Membership well
over 2600. Orchestra composed of 80 men and
women, 140 in Symphonic Choir and 112 in Youth
Symphony.

Grand Rapids Art Museum - Fine permanent collects,
plus temporary showings of art works and craftsmanship
and strong program for children.

Grand Rapids Civic Auditorium - Accommodations for
audience of 5000 in main auditorium, plus auxiliary audi—
toriums and meeting rooms of various sizes.

Grand Rapids Civic Theatre - in continuous operation since
1925.

St. Cecelia Society - Formed in 1854 to promote cultural
values through muSic.

17

PO PU LATIO N (Continued)

 

Recreational Facilities

 

An array of public and commercially operated recreation
centers are available to Grand Rapids residents. Because
of its location in West Central Michigan, Grand Rapids has
easy automobile access to numerous state parks and the
beaches of Lake Michigan. Local parks provide facilities
for picnics, camping, swimming, fishing, golfing, tennis
and baseball. In autumn, hunting season opens on small
game, pheasant, duck and deer. Winter sports include
ice fishing, ice skating, skiing and snowmobiling.
Commercially operated recreation centers compliment

the public facilities and private clubs and organizations
provide all types of year-round recreational activity.

The accent is on participation types of activities.

Parks

Parks throughout the Grand Rapids area have been selected
and developed to be preserved and maintained for the
enjoyment of the people. The Grand Rapids Metropolitan
Area has long enjoyed one of the finest regional park
systems to be found in any area.

A detailed inventory of the existing facilities indicates that:

There are 37 county parks in the Metropolitan Area
with a total area of 3,037 acres.

The local municipalities within the Metropolitan Area
provide 86 parks, consisting of 1,735 acres.

The adjoining counties, collectively, maintain 44
areas totaling 1,011 acres.

The state maintains, within the regional area, three
game areas totaling 7,443 acres and nine public
access sites for boating and fishing.

18

POPU LATION (Continued)

 

Plalgrounds and Recreation Centers

 

The Grand Rapids Recreation Board operates 36 play-
ground sites, staffed by 55 seasonally employed "Play
Leaders". The nine week organized program includes
sports, games, arts, crafizs, storytelling, special events
and free play.

In addition, the Parks Department and the Board of
Education in a joint effort have been developing parks
at schools. The goal of a park or playground within a
half mile of each child is being approached.

Golf Courses

 

With over 32 golf c0urses and only 8 of these being
closed, private country clubs, the Grand Rapids area
offers a fine choice of golfing facilities. Driving ranges
and miniature golf courses are also numerous in the area.

200

 

Grand Rapids has Michigan's second largest 200 in John
Ball Park and also a Zoological Gardens. Some 600
animals, birds, reptiles and fish are on exhibit in
surroundings resembling their natural habitat.

GOVERNMENTA L ORGANIZATIONS

 

East Grand Rapids

 

Commission/Manager - Established in 1925

Grand Rapids

 

Council/Manager - Established in 1916

Kentwood

 

Mayor/Council - Established in February 1967

Wyoming - Commission/Manager - Established January 1959

19

GOVERNMENTAL ORGANIZATIONS (Continued)

 

Fire Protection

 

East Grand Rapids

 

16 full time, 14 volunteers, 6 vehicles

Grand Rapids

 

299 full time, 15 vehicles

Kentwood

 

1 full time, 26 volunteers, 9 vehicles
Wyoming
15 full time, 75 volunteers, 14 vehicles

Police Protection

 

East Grand Rapids

 

20 full time, 5 vehicles

Grand Rapids

 

383 personnel, 99 vehicles

Kentwood

 

10 full time, 7 reserve, 6 vehicles

Wyoming

65 full time, 26 vehicles

20

EDU CATIO NA L FACILITIES

 

 

Colleges & University Extension Centers

Aquinas College

Baptist Bible College
81 Seminary

Calvin College

Central .Mich igan

University
Davenport College
Grace Bible College
Grand Rapids Junior

‘ College

Grand Rapids School
of Bible 8. Music

Grand Valley State
College

Kendall School of
Design

Reformed Bible

Institute

Michigan State
University

A Catholic institution open to those
of all faiths. Average enrollment: 1,400
A college affiliated with the General Assn.
of Regular Baptists. Average enrollment:
630

A Christian Reformed Church institution.
Average enrollment: 3,572

Extension Course: Supervision of
Student Teachers

Junior College of Business. Average
enrollment: Day - 665: Evening - 340

A non-denominational college. Average
enrollment: 116 -
Grand Rapids Board of Education institution.
Average enrollment: 5,283

A three year college affiliated with the
Independent Fundamental Churches of
America. Average enrollment: 578

Four year liberal arts college.
Average enrollment- 2,460

Three year advertising and design school.
Average enrollment: 525

A Christian Reformed Church Institution
offering a Bachelor of Religious Education
degree. Average enrollment: 75‘

Extension program. Graduate degree
programs and continuing education primarily.

21

EDUCATIONAL FACILITIES
Colleges 8. University Extension Centers

University of Michigan Extension program. Graduate degree
programs and continuing education primarily.

Western Michigan Extension program. Graduate degree
University programs and continuing education primarily.

Public School Districts

East Grand Rapids Public Schools
2006 Weatlhy St. SE, Grand Rapids 49506
Enrollment: 3,820
High School: 1: Jr. High School: 1: Elementary Schools: 5

Forest Hills Public Schools
5900 Ada Drive S. E. , Grand Rapids 49506
Enrollment: 3,897 '
High School: 1: Jr. High School: 1: Elementary Schools: 6

Godfrey- Lee Public Schools
1335 Lee Street S.W., Wyoming 49509
' Enrollment: 1,415
High School: 1: Elementary Schools: 2
' Non-Public Schools: 1 Catholic Elementary

Godwin Heights Public Schools

15 - 36th Street, SW, Wyoming 49508
Enrollment: 3,560
High School: 1: Jr. High School: 1: Elementary Schools: 3 .

Grand Rapids Public Schools

143 Bostwick N.E., Grand Rapids 49502
Enrollment: 34,632
High Schools- 5: Jr. High Schools: 7:
Middle School: 1: Elementary Schools: 61

Non-Public Schools:
5 Catholic High - 19 Elementary

2 Christian High — 11 Elementary

3 Lutheran Elementary
1 Seventh Day Adventist Elementary

22

EDUCATIONAL FACILITIES (Contd)

 

Kentwood Public Schools .

4479 Kalamazoo Ave. S.E., Kentwood 49508
Enrollment: 5,600
High School: 1: Middle School: 1: Elementary, 7

Northview Public Schools
3801 E. Beltline N.E., Grand Rapids 49505
Enrollment: 3,443
High School: 1: Middle Schools: 2, Elementary: 5

Wyoming Public (Schools

3575 Gladiola S.W., Wyoming 49509
Enrollment: 7,800
High Schools: 2: Jr. High Schools: 3,: Elementary: 10
Non-Public Schools: 1 Christian Elementary, 1 Lutheran

HEALTH AND MEDICAL FACILITIES

Grand Rapids has four general hospitals with a total of 1,465
care beds. Of these beds 1,029 are medical-surgical, 250

are pediatric, and 186 are obstetric. making the Grand Rapids
community self-sufficient in the medical arts. The hospitals
are served by a wide range of specialists, aided by sophisticated
plant and equipment (and specialized educational and research
facilities.

General Hospitals

 

Blodgett Memorial Hospital - 426 beds
Butterworth Hospital - 467 beds

Grand Rapids Osteopathic Hospital - 183 beds
St. Mary's Hospital - 389 beds

Kent Community Hospital - 550 beds — operated by
Kent County

23

HEALTH AND MEDICAL FACILITIES (Contd)

Other Ho'spitals

 

Ferguson-Droste-Ferguson Hospital — 110 beds
Specializes in diseases of the colon and rectum.

Kent Oaks Hospital - 50 beds - care of persons
suffering from mental illness.

Mary Free Bed Hospital‘8. Rehabilitation Complex -
82 beds. Provides for crippled and afflicted children
and adults.

Michigan Veterans Facility Hospital - 260 beds.
Pine Rest Christian Hospital - 542 beds.

Provides for emotionally ill and mentally retarded
of all ages.

COMMUNICATIONS MEDIA

NEWS MEDIA

 

 

 

Newspapers Daily or
Weekly Circulation

Grand Rapids Press Daily 132,000
Grand Rapids News Weekly 12,600
South Kent News Weekly 5,850
Wyoming Advocate Weekly 7,000
Grand Rapids Legal News Weekly 2,500
The Almanac Weekly 17,000
The Interpreter Weekly 20,000

Grand Rapids Times Weekly 10,000

24

COMMUNICATIONS MEDIA (Contd)

Station Call Letters

 

VVEFUK-Awm
WFUR-AM
WFUR- FM
WGRD—AM
WIO N— FM
VVJEfi=wAAA
WJ FM- FM
WJ PM- AM
VVLAnfiwAAA
VVLvasme
WMAx-AM
woo D-AM
v WOOD-FM
WYO‘N- FM
WZZM— FM
WKZO-TV
woo D-TV

WZZM-TV
WU HQ-TV

Dial

 

1 530

1570

’ 102.9

1410

1 430

1 230

93.7

810

1 340

96.9

1 480

1 300

105.7

101.3

95.7

Wattage

500
1,000
40,000
1,000
5,000
1,000
500,000
500
1,000
28,000
5,...
5,000
255,000
50,000

50 , 000

Channel 3 (CBS)
Channel 8 (NBC)
Channel 13 (ABC)
Channel 41 (ABC)

CHAPTER 2

This section of the study is one of surveying, for
purposes of determining consumer attitudes, programming
preferences and community needs. The material is presented
in the same order as collected, with tabulation sections

following survey results, on an item by item basis.

Sources of information for this chapter were:
Broadcast Research Primer NAB 1969
Kent County Bureau of Social Services
City ‘of Grand Rapids
City of Wyoming
Pierson, Ball 81 Dowd, Attorneys, Washington,D.C.
Michigan Bell Telephone Inc.

Consume rs Power Inc .

.25

26

RANDOM SURVB

 

To determine the probable penetration of a cable television
system, it was necessary to conduct a survey of the people ultimately
to be served. Such items as cable television awareness and pro-
gramming preferences were tested. The prime question being:
How does one reach, influence, sell and maintain a potential
subscriber? To ascertain this information, a 200-unit random
survey was conducted. The sample was selected from the Grand
Rapids area telephone directory, using a skip interval of 260
names with a starting point selected from a table of random
numbers. This sample of 260 names was then worked repeatedly
with a minimum of two phone calls being made at the non-
response residences. This list with no variations was made to
yield the final sample of 200 completed questionnaires. Standard
deviation of this size sample with 50% reliability is +, -, 7.1%
with a safety factor of 20 to 1 according to tables in NAB
Research Primer 1969.

Interviewers were trained as to purpose direction and
techniques. They were equipped with master information sheets
and questionnaires as exhibited in Appendix A. The five questions

asked are as follows:

27

1. Do you know what cable television is?
2. What do you like best about TV?

3. What do you like least about TV?

4. What does TV need?

5. Would you like to see cable television
in Grand Rapids?

Those interviewees who did not know what cable television
is were informed by reading of the master Sheet in Appendix B
before continuing. The answers were recorded verbatim in
an effort to let the potential customers' true wants and needs
come out. Question No. 5 seems weak, but such is not the
case, as trial surveys conducted by the author in question
formulation showed that questions were rejected by the
interviewee when worded stronger. The first form of Question
No. 5 was: Would you subscribe to cable television if it was
available? The second form was: Do you think five dollars
per month is too much for a service such as cable television?
Both questions met with much resistance and hesitation. The
final form indicates acceptance without definite commitment,
and was answered readily.

Results of the survey follow.

28

Do you know what cable television is? No

What do you like best about TV?

Yes

Total

Sports

Movies

" Everything"
News

Drama

Specials

Variety Programs
Comedies
Educational Programs
"Nothing"
Documentaries
Family Programs
Talk

Daytime Serials
Religion

CBS

Color

Westerns

Quiz Programs
Cartoons

No Comment

Total

1 2O
80

200

-*-*l\)i\)i\)00
00300-5600

OmdddMMQQCfiCflQVOG

_L

 

“8’

What do you like least about TV?

29

Commercials

Violence

Daytime Serials

"Nothing"

Situation Comedies

Sports

Variety Programs

General low level of pgms

Reruns

"Everything"

News

Westerns

Profanity

Quiz Shows

"Programs scheduled
at wrong time"

Cartoons

Cultural Programs

Game Shows

Long Hair

Movies

Science Fiction

Talk Programs

Poor selection

Programs not realistic

No comment

Total

10101000
[DUI-b

IDIOOO-ACDO'IVCOOUIO

bd-‘d—L—LJ—Ldmm

I0

'9’

30

What Does TV Need?

"Nothing" 28
More educational programs 24
More children's pgms 18
Less violence 16
More variety of pgms 10
More movies 10
General elevation of

programming

More drama
More documentaries
More music programs
More sports
Less commercials
More travelogues
More family programs
More variety programs
More comedies
More weSterns
Less sports
Less variety programs
More local programs
More religious programs
More game programs
More "realism"

Less profanity

No comment

—L

.h—Ld—L—L—L-bd-l-LI'DMODUIUIVQQO

C10

 

ii

Total

31

Would you like to see cable television in Grand Rapids?

Yes 1 27

No 50

Undecided 13
No comment _1__(_)__

200

Special Observations:

70% of those surveyed either were favorable toward cable
or undecided. If the interviewee did not know
what cable was, it was explained to him.

60% of those surveyed did not know what cable is!

58% of those that did not know what cable was, wanted
it after explanation!

7% were undecided about wanting cable!
5% did not want cable due to "too much money"!

Observed Tendencies

 

(This category is to be considered as an indication only,
as pertinent sample Size is so small that reliability is low).

The areas of the city rank in descending order as to cable
awareness and potential cable acceptance, Northeast, South-
east, Southwest, Northwest.

32

COMMUNITY LEADER SURVB/

 

To determine community needs and interests, a list
of 51 local opinion leaders was prepared, selecting men most
active in their professions and local affairs. This list was
composed of the following demographics:

13 Business and Industry Leaders

9 Political Leaders

6 Religious Leaders

6 Minority, Ethnic and Social Leaders
5 Cultural and Recreational Leaders

4 Volunteer Type Leaders

3 Legal Profession Leaders

2 Educators

2 Labor Leaders

__1_' Medical Leader

51 Interviews

Categorization of community needs and interests was
accomplished by instituting a two—faceted classification process
as follows:

Each interviewee was afforded two equally weighted

"ballots", one in each pertinent area. Where the interviewee‘

 

 

33

expressed a range of concern, touching upon non-related subjects,
a "ranking" process was used and the interviewee's comments
were rated by the scale A, B, C, etc. as to second most
important, third, and so on. Such a process not only allows
generalizations to be drawn, but gives this Exhibit a stratified
appearance, providing insight into the relationships between
general categories and indications of the ebb and flow of

opinion trends.

Leaders in the community are extremely hard to identify
and impossible to classify. The 51 men selected for this portion
of the survey were chosen by principles of WOOD Broadcasting,
Inc. on the basis of their professional and personal activity
in the doings of the community. The selection panel consisted
of the following men:

Willard Schroeder Vice-President 8: General Manager,

Time- Life Broadcast

Major Stockholder, W.B.I.
Michael O. Lareau Vice-President 8. General Manager

WOOD Broadcasting, Inc.

Stockholder, W.B.I.

Jay VanDenBerg Local Furniture Industry Executive
Stockholder, W.B.I.

Clifford Christenson Attorney
Stockholder, W.B.I.

Thos. M. Girocco Time-Life Broadcast, Inc.
General Sales Manager, W.B.I.

34

Personal interviews were conducted at the convenience
of the interviewee by those gentlemen listed above. The main
questions follow:

What is the most crucial community need from
your professional point of view?

What is the most crucial community need in
general?

A sample questionnaire is presented in Appendix C.
The interviewees were not coached, but asked and expected to
expound at length. The results were classified and assigned
weights as previously described and tabulated in the following

pages. A list of interviewees and positions held follows.

35

Business 8. Industry

 

Werner Veit, Editor, Grand Rapids Press.

Alfred L. Scott, President, Scott Realty

David Valenti, Chairman of the Board, Herpolsheimer's

J. Herman Fles, Chairman of the Board, Associated Truck Lines
Robert Pew, President, Steelcase, Inc.

Britton Gordon, President, Blackmer Pump, Div. of Dover Corp.
William Beaman, Jr., President, F. Raniville Co.

Eugene Silveri, Executive Director, G. R. Chamber of Commerce
Herbert Daverman, Daverman Associates

Joseph Shaw, President, Michigan National Bank

Clarence Damon, Manager, Wurzburg's Dept. Store

Albert Davis, General Manager, Diesel Equipment Div. of Gen. Motors

James Hager, President, T. W. Hager Lumber Co.

Political

Joseph Grassie, City Manager, City of Grand Rapids
Patrick Barr, City Commissioner, City of Grand Rapids
Robert Veit, Fire Chief, City of Grand Rapids

Robert Anderson, Chief of Police, City of Grand Rapids

Chris Sonneveldt, Ex-Mayor, City of Grand Rapids

36

Political (Continued)
William Farr, Chairman, 5th District, Republican Committee
Jon DeWitt, Kent County Board of Supervisors
John Collins, Mayor, City of East Grand Rapids

Thomas Eardley, Mayor, City of Wyoming

Re ngious

 

Rev. Roy Ostenson, Minister, Grace Episcopal Church

Dr. Russell McConnell, Exec. Director, G. R. Area Courcil
of Churches

Rev. H. M. Beahan, Bishop's. Secy. Communications, Diocese of G.R.
Rabbi Frederick Eisenberg, Temple Emanuel
Rev. Peter Paulsen, Media Coordinator, Reformed Church of America

Harry Vanderlaan, President, Christian Labor Association

Minority (Ethnic, Social)

 

O. O. Horn, Jr., Director, Freedom Homes, Inc.

Paul- Phillips, Director, Grand Rapids Urban League
John Arsulowicz, Jr., President, Polish Heritage Club
James Haveman, Administrative Director, Project Rehab
Roy Roberts, President, NAACP

Miguel Navarra, Latin American Community Leader

37

Cultural and Recreational

Herbert Boshoven, Past President, Civic Theatre

Frederick Meyers, Director, Grand Rapids Art Museum
Wendell Frankforter, Director, Grand Rapids Public Museum
Wesley Tebeau, President, West Mich. Tourist Council

Edward C. McCobb, Exec. Director, Grand Rapids Foundation, Inc.

Volunteer Type

 

John P. Otte, United Community Services, Red Cross
Arthur Miller, Exec. Director, Red Cross
Brigadier William, Roberts, Administrative Head, Salvation Army

Raymond Tardy, Director, Community Action Program

Legal Profession

Robert C.C. Heaney, Partner, McCobb, Heaney & Van't Hof
Hon. Stuart Hoffius, Presiding Judge, Kent County Circuit Court

Hon. John T. Letts, Judge, Kent County Circuit Court

Educators

 

Dr. Norbert Hruby, President, Aquinas College

Dr. Robert Sneden, President, Davenport College!

Labor

.Arthur Heimer, International Representative, UAW-CIO

James Kelly, Secretary-Treasurer, Teamsters, Local 406‘

Medical - Dr. Leonard Rosenzweig, M.D. (Psychiatrist)

38

 

 

TABU LATION
O rganiz ational
1. Reorganization of city govt. 3
AAAB
2. Racial/Ethnic Problems 14
3. Economic Distress 16
A
4. Communication of needs 11
5. Deterioration of city 2
AAAB
6. Schools
7. General Apathy
A
8. Transportation Systems 1
AAA
9. Ecology 2
10. Vietnam War
11. Continuing 131 North
AA

12. Physiological/Psychological Problems 2
AAAA

General

19
AB

9
AAAB

AAB

AAAA

10

39

(1) Re-organization of Local Government:

 

The total of 28 ballots for re-organization of local govern-
ment and services does net tell the entire story, for five of the
elements in the "Economic Distress" category are situations that
could exist because of duplication of services, and inefficiencies
in various local governments. This category is expanded even
further by impact from the category, "Deterioration of City",
due to erosion of the tax base. The number of second and third
priority (7) weights assigned to this category also indicates an
undercurrent of concern. When the interviewee felt other matters,
closer to his sphere of influence, were of prime importance, he
still felt the need to touch upon this category. It is interesting
to note that of the 28 elements solidly in this category, 27 were
for unification and consolidation of fimctions and services, leaving

only one against such a concept.

(2) Racial and Ethnic Problems

 

The total of 26 elements in this category are made up of
three pertaining to housing and the remainder generally to polarization
of groups and maintenance of longstanding ethnic barriers. The
second and third place weights in this category (4) and positive

comments made by some interviewees would seem to indicate

40

a contradiction of opinion. Some leaders feel the "Polarization

Gap" is widening, others feel progress is being made.

 

(3) Economic Distress:

Of 23 elements in this category, one was in the area of
national regulation, the others were pertaining to lack of operational
funds and are in the category of organization points of view, related
to the interviewee's professional function. Second place weights

are inconsequential here.

(4) Communication of Needs:

 

Of 23 elements here, the interviewees are strong in the
opinion that the communicators need to communicate more and
better. This tabulation was gleaned from what initially appeared
to be other categories but upon development, emerged as problems
that are the result of an acute dearth of accurate knowledge surround-
ing agency functions and minority folkways. This general lack of
understanding between organizations and the populace, and between
various groups, was thought a surmountable obstacle by the
majority of those interviewed. Of course, the communicator's
ability to fulfill his function is directly related to the public's
willingness to be informed. Second weights (1) here are

inconsequential .

41

(5) Deterioration of City:

 

The 10 elements here are interesting in distribution because
only 2 are organizational points of view, while 8 are general
opinions. The strong undercurrent of second and third weights
(7), and comments made by interviewees seems to indicate a

trend toward more concern for this category.

(6) Schools:

The relatively low frequency of mention in this category
(4) stems partially from the fact that much of the weight of the
category was absorbed more correctly in the "Racial/Ethnic"
area. The strong undercurrent (6 second weights) seems to

indicate ebbing concern .

(7) General Apathy:

 

This category does not indicate strong interviewee concern.
The two elements and two second weights tabulated are thought
to be partially due to the depth of the interviews conducted.
Generalizations that could have been superficially indicative 0f

apathy were developed into more meaningful classification.

(8) Transportation Systems:

 

This relatively light category, one element, was made up

42

of complaints that appear to be the result of personal inconveniences
suffered by interviewees as regards business oriented air travel.

Second and third weights (4) are of the same disposition.

(9) Ecologx.

A relatively light categOry, three elements, indicating
interviewees are not particularly concerned with this area. Second

weights ( 1) are inconsequential.

(10) Vietnam War:

 

Light response to this category, one element, seems to
be the result of "local" orientation of survey conducted. Although
interviewees were not instructed to keep remarks "local", they
seemed to react to needs and ,interest's'to whose ends they might

serve personally. No second weights in this category.

(11) Continuing_U. S. 131‘North:
Light response, one element, two second weights, is

th0ught to reflect preoccupation with items of greater import.

(12) Physiological/Psychological Problems:

 

Relatively light response, two elements, both directly
related to professional occupation (1 VD, 1 mental illness). Of

more impact seems to be the second weights, unanimously con-

cerned with growing awareness of drug problem.

, FRANCHISE REQUIREMENTS

 

In planning a cable television system for a metrOpolitan area
divided into separate municipalities, it is most realistic that the
potential franchisee prepare himself to live universally with the
most stringent single franchise he is confronted with. The
separate municipalities awarding franchises all have certain common
denominators such as a demonstration 0f financial capacility, pro-
fessional expertise, fair employment practices and performance
schedules. Items like franchise payments, services development
and channel capacity, are subject to variation between governmental
units. These variations tend to disappear once services are provided,
and all municipalities want equal treatment. Corporate experience has
demonstrated that soon the lowest common denominator becomes the
most stringent franchise. For this reaon we will examine the Code
of the City of Grand Rapids, Michigan, Title VII, Chapter 110, as
regards cable television. The ordinance covers the following topics:

A descriptionof which revenues are to be used

to determine franchise fees. These "gross" figures
are largely regular monthly charges, but are ~ »
subject to revision. They are: 0 - $500,000 at

4%, $500,000 to $1,000,000 at 5% and $1,000,000

up at 6%.

44

A statement that all local, state and national
laws will be abided by.

The right to. use all city streets, alleys, public
ways and places to carry out the business of
cable television.

The length ‘of the franchise is 20 years and
shall be carried forth from that point on '
mutual consent of both parties.

A statement of policy regarding customer
refunds.

A statement indemniiying the city from all
damages and penalties, and stipulating '
performance bonds and insurance requirements.
The rate schedule is spelled out in exact form
by the ordinance, and allows $15.00 for in-
istallation and $5.00 for monthly service charges.
for the first outlet. Additional outlets are
installed for $5.00 and maintained for $1.50
additional monthly service charges. A complete

rate schedule is provided in Appendix D.

45

A Statement on Channel Usage

 

Use of Channels
Grantee may sell or use for program origination
all channels except those which he must carry
under FCC regulations. The fees charged for
use of such channels are to be set by the Grantee
for all but the public broadcast channels herein-
afier described.
Advertising and Pay TV are allowed on these
channels; provided, however, that Grantee shall
not permit advertising for any candidate for any
local political office or for any party sponsoring
such candidates to be carried on its channels
unless any other candidate for said office or any
bona fide party, as determined by the Commission,
interpreting all relevant FCC rules and gu1delines,
or a party itself in case other parties so advertise,
be provided with comparable advertising time. The
Commission may, by regulation, specify the offices
and parties covered hereunder and may specify what

shall constitute the provision of comparable time.

46

Four channels are reserved for use at the City's
discretion for public broadcasting, pu'rsuant to
provisions of Section (3).

‘ Grantee is prohibited from censoring any program
which is cablecast; Granteefis expressly granted
immUnity from any liability which might otherwise
arise out Of its failure to censor any program
pursuant to this subsection.

Charges to the user are to be based upon value
of the service to the user and costs to the
franchisee and no other criteria. Grantee is
prohibited from discriminating on any other

grounds among users or in favor of himself.

Public Service and Public Broadcasting_
The Grantee agrees to provide four channels for
public service use as the need for same shall be
determined by the City CommisSion. The Com-
mission shall, upon 60 days' written notice to
Grantee, have the power to require said public
channels to be set aside at specific times or

at all times twenty-four (24) hours, a day. In

/’

47

providing for the usage of such public service
channels, the Commission may consider any
unmet need of low-income 0r economically
disadvantaged persons for access to, and use
of, such communication media.
The Commission may grant licenses to persons
or organizations for use of a public service
channel for periods up to, but not exceeding,
one year for a specific schedule or for the
entire channel for all of such period of time;
provided, however, that such period may be for five
(5) years if such licensee is a governmental body
or board of education.
Applicants to the Commission for public broadcasting
licenses must fulfill the minimum criteria established
by the FCC for ETV. The Commission may require
that a licensee provide a reasonable amount of
audience participation time and may establish such
other requirements not inconsistent herewith as it
deems appropriate.
A statement specifying public service installation which
shall be free of charge, schools, fire stations and

police stations .

45

A statement prohibiting sale, lease, and repair

of receivers.

A statement on construction standards and require-

ments, stipulating good engineering practices, with

minimum disruption of existing services, and public

convenience .

A statement prohibiting transfer of franchise and

change of corporate control without-prior city

approval.

A statement covering terms of forfeiture, which

amounts to substantial violation of the franchiSe.

A statement regarding performance guarantees

of construction to begin within 60 days 'of distant

signal authorization from the FCC, and service

to subscribers within 90 days after construction

begins. Extension to all areas and residents

must be as soon as possible.

In addition to the above Categories, the City of Grand Rapids

has added miscellaneous provisions that allow for an emergency
"override" of all audio outputs for purposes of Civil Defense and

other matters of public safety. Exclusive telecasting to specific

49

neighborhoods and districts, from multiple origination points is
mandatory in the interest of providing SpeCIfic‘ group or neighborhood
information from within that group or neighborhood.Further additions
call for development of two-way, non-voice communications, without
defining wants or needs. These miscellaneous provisions were
presented as items to be used in evaluating specific proposals,
and as such were loosely defined, leaving description up to the
individual applicant.

The only other ordinance or franchise that exists at this
writing is that of the City of Wyoming. The Wyoming franchise
is generally Similar to that of Grand Rapids, but somewhat less
exacting in its requirements. The cities of East Grand Rapids
and Kentwood are expected to "borrow" from the City of Grand

Rapids .

50

F.C.C. RU LES

August 5, 1971, by a 6—1 vote, the FCC adopted a
letter addressed to the Chairman of the Senate and House Com-
munications Subscommittees, in which the. Commission set forth
a summary of the rules governing CATV operations which it intends
to promulgate. I The Commission Stated that it hopes to issue a
formal Memorandum Opinion and Order with accompanying rules
detailing the specifics of its new regulations by the "latter part
of the year". It "now projects" an "effective date of March 1,
1972."

Since the text of the letter- runs 55 pages, a summaryis
presented. The basics of the regulations are unchanged from those
that the Commission relayed earlier to Senator Pastore's sub-
committee as slightly refined in its‘ presentation to Congressman

MacDonald's subcommittee:

CARRIAGE OF BROADCAST SIGNALS

Mandatory (Required) Carriage

All television stations licensed to communities within
35 miles of the CATV community.

Upon request, all television stations with predicted
Grade B Contours over the community of the system.

If the community of the CATV system is at least
partially within 35 miles of a Top 100 market,
then it may carry Grade B signals only if these

51

signals are "significantly viewed" -— the criteria
for "significant viewing" are:

Network stations -:- 25 percentnew weekly
circulation and 3 percent audience share.

Independent stations -- 5 percent net weekly
circulation and 1 percent audience share.

Minimum (Permissible) Carriage

 

 

 

 

Market Foreign
Size Networks Independents Educational Language
1 - 50 3 3 1 plus No limit
51 - 1000 3 2 ' 1 plus No limit
Below 100 3 1 1 plus No limit

The geographical extent of each market is deter-
mined by a 35-mile zone from a referance point,
usually the central post office -- all CATV systems
located wholly outside of any 35—mile zone may carry
any signals in addition to those it is required to ‘
carry and do not have to abide by the leap-frogging

restrictions .

The ranking of markets is to be determined by ARB'S

1970 prime-time households listing, not the previously

used net weekly circulation.

52

Stations with CP's would be counted 'only if their

CP was outstanding for less than 18 months.

Additional (Bonus) Signals

 

 

Top 100 Markets

Two bonus Signals —- two additional signals (either

independent or network) are permitted in any event,

even if the number of signals required to be carried
0

is equal to or greater than the formula for permissible

service in the particular market.

Below the Top 100 Markets

 

No bonus signals .

LEAPFRO GGING RESTRICTIONS

 

Distant Independent Stations

 

Top 100 Markets (Only one importation permitted)

 

No restrictions .

Top 100 Markets (Two or more importations permitted)

 

First independent imported / any UHF within
200 miles: or, if none, either any VHF within

200 miles or any UHF station wherever located.

53

Second independent imported, no restrictions.
Third independent imported, either any inter—
state or any station within 200'miles: or, if
none, no restrictions.

Below Top 100

 

No restrictions.
Distant Network and Educational Stations

All Markets

 

Each additional network or educational station

must be the closest, in-state station: if none,

then the closest station.

CABLE ORIGINATIONS

The Commission stated that "We envision a future for
cable in which the principal services, channel uses, and potential
sources of income will be other than over-the-air signals . . .
We put them (cable operators) on notice that it is our intention
to insist on the expansion of cable systems to accommodate all
reasonable demand."
Minimum Channel Capacity

Top 100 - 20 channels (actual or potential).

Below Top 100 - No mini mum requirement, at least
" immediately " .

 

54

Non-Broadcast Channels

 

1-1 parity will exist between the number of channels used
for broadcast signals and the number used for non-
broadcast matter. After all operatibnal channels are
used during ‘4 of the 5 weekdays for 4/5 of any 3-hour
period for 6 consecutive weeks, the system must add
a new channel. within 6 months (the so-called N + 1
availability). "One free,dedicated, non-commercial,
public access channel will be available'at all times

on a non-discriminatory basis", plus one channel for
educational use on a developmental basis with free
serVice for at least the first five years.

One channel will be provided for state and local
governmentvuse on a developmental basis with free
service for at least the first five years. The CATV
operator may charge production costs in connection
with use of any of the "free channels" except for live
studio‘presentations less than five minutes.

Leased Channels

 

Unused portions of the free dedicated channel and all

other non-broadcast capacity may be leased. Leasing

55

is to be on a non-discriminatory, first-come-first—serve
basis with "appropriate", "specified" rate schedules.
Commercials are permitted at any time on leased
channels (they may appear only at "natural breaks" on
channels originated by the system. The system operator
must not "censor or exercise program content control
of any kind" over the leased channels. The strictures
against transmission of lottery or obscene material
apply.

PROCEDURE

Certificates of Compliance

 

Each system must secure. a certificate of compliance

from the FCC before beginning operations. In order

to secure a certificate of compliance, the system must:
File its franchise, a list of signals to be carried,
an affidavit showing 1105 notices have been served _
and an annual report I Form 325) to the FCC. The
FCC will issue a public notice and there will be a
30—day period for protests by "interested persons".
The FCC will dispose of the protests before issuing

the certificate .

56

Federal-State/ Local Relations

 

The FCC's approach is to establish some general guidelines
with the specific criteria and enforcement lefi: up to the local bodies.
It takes no position on the desirable regulatory division of responsi-
bility between state and municipal authorities.

Before commencing operations, a CATV system must file
a copy of its franchise and submit a certificate "showing that the
franchise authority in a public proceeding has considered the
system operator's legal and financial qualifications, and the
adequacy and feasibility of his construction arrangements."

The FCC strongly suggests that the public
proceeding include a public invitation to all
potential applicants, reasonable public notice,

a public file containing the applications or bids,
a public hearing and a public report on the
results, but the selection of comparative
criteria to ascertain the winner is left to the
franchising authority.

The franchising authority "must make provision
that the franchisee extend service equitably to

all parts of the franchise area".

57

The franchising authority must require the head-
end to be in operation within one year after the
FCC'S certificate of compliance is issued and
must establish a construction schedule for the
remainder of the system. The FCC "suggests"
that a reasonable construction schedule would be
20 percent per year so that the plant is completed
within 5 years.

The franchising authority must set a reasonable
limit on the franchise term -- 15 years is es-
tablished as "generally speaking" a reasonable
period. (The example given of "particular
circumstances" which might justify. a longer
period is of "an applicant proposing to wire
inner-city areas free or at reduced rates".)

The franchising authority must have the power to
specify or approve subscriber rates (no level of
rate or rate return on investment is suggested).
Fees paid to the franchising authority must be
"reasonable" and ones that do "not interfere with

the effectuation of federal goals".

z"

58

UTILITY POLE USAGE

 

The potential franchisee for the. Grand Rapids area will
find an excellent pole system permitting ready access to all sections
of the metropolitan area. Unusually large numbers of poles in
excellent condition will provide trunk routes on any main artery.
Distribution routes are equally available, virtually eliminating the
need for the cable operator to install his own poles. Preliminary
contact with " right of way" supervisors for both 'Michigan Bell
Telephone and Consumers Power indicate common carrier tariffs
of $4.00 per pole per year, with a $1.00 per pole application
fee, payable at the outset. "Make ready" charges for rearranging
existing services to allow for CATV cable placement are estimated
to be 15% or less, due to the nature of the pole plant.

Upon obtaining a franchise, the potential Operator will
be required to provide each utility company with a map of the pro-
posed system indicating which poles will be used. Upon approval
of the new "cable plant", the franchisee must then provide standard
surety bonds of $5,000.00 and insurance indemnifying the utilities
from "cable" caused liabilities that may occur in construction or
during maintenance. Both utility companies are most anxious
to pursue the matter and have demonstrated extreme willingness to

cooperate .

59

SUMMARY

 

Franchise requirements for the area indicate that franchise
fees at saturation will total $53,000.00 per $1,000,000 gross annual
income in Grand Rapids and $53,000.00 per $1,000,000 gross
annual income in Wyoming. These figures are based on incomes
at the saturation figure of 55% penetration, with respect to the
payment schedules set forth in the franchises. The stipulation
of four channels being provided for municipal use will be expensive,
particularly: in light of the duplication factor that exists when service
is extended into other municipalities. These requirements, however,
should help secure the desired penetration figures by virtue of
their attractiveness to the consumer.

The populace has overwhelmingly indicated a favorable
attitude toward cable television as evidenced by the preceding survey.
With 63% positive attitude, and a clearly demonstrated dissatisfaction
with Current program fare, the people of the Grand Rapids area
appear to be ready for more selection in television viewing.

The proposed FCC rules will permit a total of three
distant independent stations, four local stations and a minimum of
one educational station. Additional services at the outset should be
largely limited to automated services such as weather dial, news

teletype and a local sports special events and public access channel.

60

A radio FM "pass band" (reception and amplification of the

entire FM range of frequencies) will provide distant and specialized
radio reception while adhereing to FCC radio requirements. The
"one-to-one" parity between off-air and local services, the

"N + 1" concept, and "public access" all required by the FCC

are also required by local franchise and must be met. System
design will permit "one-to-one" and "N + 1" nicely. Public
access should be a part of the system's local origination

channel.

Initial negotiations with Fetzer Microwave, Inc. indicate
reasonable rates and ready access to distant channels, once
carriage is authorized by the FCC. The only potential drawback
seems to be the "program exclusivity" clause as discussed in
the recent NAB/NCTA Copyright Compromise that could impair
the value of distant independent programming. It is impossible
at this point, however, to predict the outcome of the clause
(that would protect a syndicated feature for sale in a local market
from previous exposure in that market via a distant importation)

while "Cable" copyright legislation is still far from settled.

CHAPTER 3

This section of the study is one of Conclusion. The
information gathered in the two preceeding chapters has
provided data on the 'market, and set the bounds of operation
of a Grand Rapids cable television system. Conclusions
drawn. in this chapter-predict the. viability of such a system.
The final sub-section of this chapter presents a plan of

action .

Sources of information for this chapter were:
Time-Life Broadcast, Inc.,. NewYork, N. Y.
Wolverine Cablevision, Battle. Creek, Mich.

Grand Rapids Area Chamber ‘of Commerce

61’

62

COSTS

I In order to project the economic feasibility of suCh
a system, the costs of construction, development and operation
of the first 500 miles of cable plant were projected on the basis
of nationwide Time-Life figures as regards censtruction and
maintenance costs. Figures secured from theTime-Life
system in Battle Creek and the consumer aCceptance figures
surveyed in Grand Rapids were used to project penetration.
The following projection indicates the proposed system will

become profitable during the third year of operation.

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68

PLAN OF‘ ACTION

 

The city will be essentially divided into four main areas
of distribution with subsectors that will permit discreet pro-
gramming within the whole. These main areas are geographically
the Northeast, Southeast, Southwest and Northwest portions of
the metropolitan area. The reader is cautioned that reliability
on surveying described below is low, as a large percentage
'of those surveyed did not know what cable television is. The
following is a guideline only.

Interviewing in the previous chapter has shown that the
greatest acceptance was in the Northeast section of the city,
indicating that this area would be the most likely area of good
penetration. Construction should begin in a Northeasterly direction,
then swing toward the Southeast, continue to the Southwest and
finish up with the Northwest, taking advantage of, general trends
in acceptance shown by surveying. The City of East Grand
Rapids will be included in the sweep from Northeast to South-
east and Wyoming will be included in the sweep from Southeast
to Southwest. Kentwood will follow Northwest Grand Rapids, due

to the sparsity of population noted earlier.

-
.‘a

69

Surveying in Chapter 1, as regards income, has also

shown that the Northeast and Southeast portions of the city have
the largest middle and upper income groups, also indicating good
potential penetration. Educational and occupational data show the
area to be above national average in educational attainment

and generally involved in service businesses and high paying
industry. This also is an excellent indication of potential success,
as"Time Inc. experience indicates middle and upper middle

income groups like cable.

By building the system in the fashion outlined above, utmost
advantage will be gained from the fact that the area indicating the
lea-st Cable aWareness and. the lowest acceptance will
be the last area to be completed, taking fullest advantage of all
advertising, word of mouth, and publicity associated with the
activity in the preceding three sections. The same principle
will apply, to a lesser degree, with the Southwest section.

The potential "homes per mile" is indicative of good
penetration, with a minimum of 62 and a maximum of 158, and

areas of most dense population scheduled before those less dense.

A map of the areas and sub-categories of developmental details follow.

       
   
   
          

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West Grand Rapids

  

N. E. Grand Rapids

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Figure 2, Distribution System Map

'71

Timetable of Construction

 

This matter is largely removed from. the area of choice
by the franchise which stipulates that the system, will

be under construction within 60 days after the F.C.C.

‘ approves importation of distant signals, will be providing
customer services within 90 days after construction begins
and will be available to all residents as soon as possible
within the limits of economic reason. Of import here,
however, is the method by which these requirements

will be met. A three faceted penetration campaign should
be undertaken throughout construction. The campaign will
begin with general advertising on radio, in newspapers,
and the first localization will occur through use of
specific billboards . The campaign‘will continue to localize
with direct mail, just ahead of construction crews, and
will culminate in a direct sales follow up on a "street by

street" basis immediately behind the construction crews.

72

Initial Services

 

The system should be constructed as a dual cable plant,
and where necessary to transport a video signal in the
reverse direction for intra-community programming, a
third cable will be used. The main hub er distribution
center should be at or near the downtown area with signals
emanating to major community sectors via discreet cable
routes permitting sector program distribution. (See map,
Figure 2, Distribution System). The proposed main TV
station receiving site should be 10 miles south of the city
limits, connected with the main hub by coaxial cable or
microwave. This final TV receiving site will also serve
as a microwave or satellite receiving station location.
Local origination facilities should incorporate color in a
downtown studio with two live color cameras, two video
tape machines, film and slide equipment and all attendant

hardware .

The system should provide 24 channel capacity by means
of an A/B switch allowing two uses of the standard 2 through
13 dial. Initially, the switch is a selector with 12 channels

on each cable .

73

Initial Services (Contd)

 

The second cable will be energized, when enough additional
services are added to warrant the additional channel space.
At such time as the system is able to provide services in
excess of the initial 24 channel capacity, converter
mechanisms should be offered to subscribers to allow up
to 60 channels, providing tremendous potential for diversified
services of all descriptions to local government, educational
institutions, community groups, and commercial interests.
Being located between Detroit and Chicago, distant inde-
pendent stations are readily available to the Grand Rapids V
market, through Fetzer Microwave Inc. The initial line—up
of off-the-air stations would be as follows:

WOOD-TV, Grand Rapids, Channel 8, NBC

WKZO-TV, Kalamazoo, Channel 3, CBS

WZZM—TV, Grand Rapids, Channel 18, ABC

WUHQ-TV, Battle Creek, Channel 41, ABC
(Significant Viewing Test)

WKBD-TV, Detroit, Channel 50, Independent
WGN-TV, Chicago, Channel 9, Independent
WELD-TV,» Chicago, Channel 32, independent
WMSB-TV, East Lansing, Channel 10, Educational

To be replaced by:
Channel 85, Grand Valley State College, Educational

74

Initial Service (Contd)

 

If F'. C. 0. Regulations should permit, additional stations
could be as follows.

WILX-TV, Jackson, Channel 10, NBC
WWTV-TV, Cadillac, Channel 9, CBS
WGTU-TV, Traverse City, Channel 29, ABC
WJIM-TV, Lansing, Channel 6, CBS
WPBN-TV, Traverse City, Channel 7
WTTW-TV, Chicago, Channel 11, Educational
WTVS-TV, Detroit, Channel 56, Educational

WNDU-TV, South Bend, Channel .16 Notre Dame
Educational

CKLW-TV, Detroit, Channel 9, Canadian

‘The program preference interviews conducted in Chapter 2,

(as regards desired programming)add credence to the pre—

ceding selections as follows:

(1)

' (2)

Sports and movies were the most popular program
types, and all three independents selected are heavy
in both categories.

"More" was the general theme of the "What does TV
need?" category. The number one specific was more

educational programs, followed by more children's

75

Initial Service (Contd)

 

programs. This category clearly testifies to the
desire for greater selection as 17 of 25 specific needs
began with the word "more".

(3) The greatest diSlike was documented as commercials,
general comments were "too many" and "their nature".
Second largest dislike was "too much violence".

In addition to "off-the-air" television stations, a full range

of distant radio stations should be carried as an additional

attraction. This may be accomplished by providing a "pass
band" service that essentially replaces the consumer's radio
antenna with the head and tower and provides greatly

improved radio reception. This meets potential F.C.C.

restrictions on radio "leapfrogging" by providing the entire

band, permitting the customer his preference of local or
distant radio signals. The fact that news rated high in
program preference indicates that automated serVices

for a weather advisory and a news/stock teletype should

be a part of the system's services.

76

 

Secondag Services

These services are other than as provided for primary
consumer impact. Although these secOndary services
undoubtedly will provide attraction to some potential.
subscribers, they are those that are originated by the

system in the public interest.

As soon as good business judgment dictates, probably
within a year after system construction commences, the
system should begin a regular schedule of community
programming to all subscribers. In general categories,
it will consist of local news and public affairs programs,
such as cooking, exercise, sewing, home repair, com-—
munity "specials", fund-raising drives, and high school
and local college sports, in response to preference study.
Because of financial limitations imposed by mandatory
services and the small economic base for standard types
of advertising ‘sales, cable origination stations cannot
compete head-to-head with commercial and educational
broadcasting stations. What they should hope to do is

enable many segments of the community to use television

as a tool of communication.

77

Secondary Services (contd)

 

As to the content of newscasts and public affairs programs,

a number of efforts were made to determine the informational
needs of the community. In a survey of 51 com‘muniiy leaders
in Chapter 2, an evident undercurrent of concern

was the lack of unity of purpose within the community. By
providing this new Communication medium and using an
"inter" and "intra" city distribution plan, a cable system

can begin to serve the specific needs of the community.
Originations must be kept simple in concept as a mutiple
origination plant will obviously be expensive. Current
technology is equal to this task, however, with cameras
costing only a few hundred dollars. The cable system can
indeed contribute to unity of purpose within the community,

by providing the means.

The City of Grand Rapids specifically requests that "intra"
city programming on an exclusive basis be a part of the
plan of those applying for the franchise. This study and
common sense would indicate that this concept in its

"exclusivity" requirement could do much to retard the

78

SecondarL Services (Contd)

 

community cohesiveness city/government wants. Although
this system discussed in these pages makes provision for
such "exclusivity", the applicant is reminded that with
virtually unlimited channel space, "universality" would
seem to better serve the intended purpose. -By programming
from‘any of a multiplicity of points to the entire system,
for example, the 15% "Black" population, in and around the
core city, could provide the entire populace with its

ethnic point of view. This same "universality" concept ,
would seem to lend itself to increasing the understanding
between various religious groups. The predominant
religion as indicated in Chapter 1, Religious Profile,

is Christian Reformed, with the remainder quite evenly
divided. A system of live telecasts of services on a .
rotating basis from various churches and the availability
of these services to the populace could increase under -

standing between religious groups.

While in no way attempting to supervise or direct the use
of the four, or more, public service channels allocated

under the ordinance, an effective cable system will be

79

> Secondary Services

 

able to Support the efforts of potential users:

Government

 

It is probable that various agencies of the Grand
Rapids city government as 'Well as county, state and
federal agencies, will desire to communicate with

the general public over cable TV Channels. Many areas
suggest themselves; films that have been produced for
general distribution on safety, fire protection, public
health, police functions, and "live" or video taped
presentations on local problems featuring appropriate
agency representatives. In addition, it is technically
possible to set up "discreet" point-to-point networks
within the cable system's perimeter, offering a method
of transmitting video and audio information only to
those authorized to receive it. This is done by the
addition of special converters at receiving points and
the use of a special "mid-band" channel that cannot

be picked up on the ordinary receiver. It could be
used for police communications, hospital originations

and other material not intended for the general public.

80

 

Secondary Services (Contd)

Education (Formal 8. Adult Types)

 

The potential of cable television for education is
enormous. It is suggested that the Grand Rapids
cable system: take advantage of the fine facilities in
the area and inter-connect all schools with the ultimate
goal of forming a Mutual Educational Network. The
Grand Rapids Board of Education was approached with
this idea and received it most enthusiastically.
Initially, such an operation could share space and
facilities with the cable system, with cable providing
the hardware, and education providing the space.

With the number of channels available in a dual cable
system, there would be ample room for both cable
system production and educational prddu‘ction to
eventually split and go separate developmental routes.
The overall idea was carried as far as the colleges

in the area, and reaction was generally favorable.
With 33% of the area population under fourteen years
of age, and the average age continually getting younger,

the need in this area is dramatically evident.

81

Experimental and Deve10pmental Services

 

These services are largely supposition at this juncture,

but the future of cable television must be concerned with
their development as. it is through development of additional
services that cable television will assume the role of
sophisticated communication.

Health and Medical Information

 

The area already has a most comprehensive system
of color television coverage of surgical procedures

at major hospitals. By utilizing existing facilities and
transmitting via cable television, any point on the
system could receive a coded transmission of' the
_ operation.

Cultural and Recreational Programs

With unlimited channel space, cultural programs
could find an outlet without having to compete directly
for a mass audience. Such offerings could be trans-
mitted live, or taped as in the case of concerts or
plays so as not to damage attendance at the event.
With the emphasis on participation sports a series

of "How To" programs could be run at convenient

82

Experimental and Developmental Services (Contd)
times to offer those interested a lesson series on
the recreation of their choice. Again, the key is the
benefit of not having to compete with the mass audience
programs. '

Information Retrieval

 

With a bank of computers accessible to the cable system
head end, the subscriber could ask for the answer to
his questions and have that answer appear on his

screen or on a hard-copy printout. This service could
also increase the capacity of the libraries in the area
andserve business and industry.

Audience Research

 

Media program decisions could be made on the basis
of much larger samples than are currently used. It is
possible-that all residents on the system could register
their viewing and listening habits nearly simultaneously.
This could be a great service to the media competing
strenuously for the market.

Shopping

The housewife could tune in on a store's fashion show

83

Experimental and Developmental Services (Contd)

 

or a supermarket's array of specials, order what
she wanted and have it billed, automatically.
Banking

Subscribers Could call up their statements on their
private home screen, and communicate with the bank
about transactions by a series of coded responses.
Movies

Experiments are already underway which permit
subscribers to Choose from a printed list of several
dozen motion pictures, and to order his choice run
on his screen at a time of his choosing.

Surveillance

 

Via the CATV network, closed—circuit TV cameras

can be installed at trouble spots and at burglar-prone
locations so that police can monitor them on a 24-hour
basis. This would be particularly beneficial in areas
such as downtown where crime rate is highest.

Fire and Burglar Alarms

 

Circuits can be added to cable TV home installations

which, if broken by entry or by heat, will activate

84

Experimental and Developmental Services (contd)

alarms in local police and fire stations. This

would be partiCularly useful in areas where the

police forces are undermanned and fire departments

are largely volunteers, i.e., Kentwood, Wyoming,

East Grand Rapids.
The fiJture consists of a long list of possibilities, limited
only by the scientists' imaginations. The cable teleVision
system serving the area can bring customers any' and all of
these two-way services when they have been proven to be
technically efficient and become at least a fair business risk,
as their expense will have to be borne in some manner.
It is too early even to speculate, but an educated guess
would seem to indicate some form of pay television is

inevitable if this degree of sophistication is to be attained.

Rate Adjustments

 

The Grand Rapids franchise, stringent in many respects
is quite liberal in others. One of these areas is that the
franchise does not prohibit Pay TV. The ordinance that

spells out the franchise seems also to recognize the fact

85

that a high degree of sophistication seems almost certain

to carry with it the possibility of some sort of unit payment.
The only stipulation is that any "Pay. TV" forms be approved
by the City Commission prior to their finalization. This
then would be the area that would have to do with rate
adjustments in the future. lThe manipulation of costs

would depend upon the nature of the services added.

86

SUMMARY

This study was performed for purposes of evaluating
the potential of a cable television System in the Grand Rapids
area. The data gathered and conclusions formed indicate
that such a system would be viable, and would be accepted
by the communin as a whole. As discussed, the system
could become economically sound during the third year of
operation. This situation could be altered as the variables
that contributed to this projection could change and lengthen
the time required to make the venture profitable. The
facts gathered on the market, the surveys conducted, and
the legal bounds that would be imposed, combine to form

a positive overview .

LIST 0 F REFERENCES

LIST ‘OF REFERENCES

West Michigan Tourists Council
Grand Rapids Area Chamber of Commerce

Cities of Grand Rapids, East Grand Rapids,
Kentwood, Wyoming

Bureau of Census 1970

Grand Rapids Area Council of Churches

Grand Rapids Area Director of Manufacturers
Broadcast Research Primer NAB 1969

Kent County Bureau of Social Services ‘

Pierson, Ball 8. Dowd, Attorneys, Washington,D.C.
Michigan Bell Telephone Inc.

Consumers Power Inc.

Time—Life Broadcast, Inc., New York, N-.Y.

Wolverine Cablevision, Battle Creek, Mich.

87

APPENDICES

APPENDIX A

CAB LE TELEVISION QUESTIONNAIRE

1. Do you know what cable television is?

2. What?

 

 

Explain concepts and costs if necessary.

3. What do you like best about TV?

 

4. What do you like least about TV?

 

5. What would you like to see on TV?

 

6. _What do you think TV needs?

 

 

7. Would you like to see cable television in Grand Rapids?

 

Address of number called

APPENDIX B

CABLE TELEVISION FACT SHEET

 

Cable television is a means of getting television signals through
a wire much like your telephone line. You don't need an antenna. and
you can get more stations and special services. A cable television
company in Grand Rapids would probably offer some Detroit and
Chicago stations, better reception of distant channels, and services
such as full time weather, news and stock reports. Also, loCal
high school sports, educational programs, city news and special
events, would be possible. For these services you would probably

pay an installation charge of about $10.00 and then about $5.00 per

 

month.
Special Notes

(1) Make certain you identify yourself properly.

(2) Make certain the interviewee does not think this
is a sales pitch.

(3) Tell the apprehensive interviewee that no record
will be kept of his name or number.

(4) Tell the apprehensive interviewee that the. Police

Dept., Better Business Bureau and Chamber of
Commerce are aware of this survey. Give them
phone numbers to check out if necessary.

Police Dept. - 456-3400
Better Business Bureau - 451-2681

Chamber of Commerce -' 459—7221

 

APPENDIX C

COMMUNIW LEADERSHIP SURVEY QUESTIONNAIRE
Name of Individual being interviewed

Organization or Agency with which he is affiliated

 

Position with Organization or Agency
Is area of concern of Agency/Organization restricted to:

Yes No

Grand Rapids

Kent County

Comments concerning community needs and interests from
standpoint of interviewee's Organization or Agency:

 

 

 

Comments regarding community needs and interests in general:

 

 

 

Other Remarks:

 

Name of Interviewer:

 

Date:

 

 

APPENDIX D

RATE SCHEDULE

 

(A) Standard Rates 8. Charges:
(1) Installation Charges:

(a) Initial tap—in and connection charges (TV and/or
radio, residential or commercial) $15.00

(b) Additional installation up to a total of four
at same location, each 5.00

(c) Additional installation, five or more at
same location: cost plus 10%

 

(d) Disconnecting service No Charge

(e) Each repositioning at same location
('relocation'): actual cost, plus 10%

(2) Monthly Rates:

(a) First TV and TV and radio outlet,

residential or commercial 5.00
(b) Additional W and TV and radio outlets, each 1.50
(c) Additional radio outlets, each 1.50

(B) Hotels, Motels, Rest Homes and Hospitals containing not less than
ten (10) rental units to which service is provided:

(1) Cost of installation plus 10%. No charge for disconnecting
service.

(2) Monthly Rates: $1.50 per TV and TV and radio outlet.

(C) Multiple dwelling units (Contained within one structure or a group
of structures located in one complex) where all service billed to
one customer:

(1) Cost of installation PIUSt 10%"

(2) Monthly Rates:
(See next page)

APPENDIX D

Number of Dwelling Units Served

Up t05

6 through 49
60 through 99

100 and over

Monthly Charge Per
TV and TV and Radio
Outlet '

Each dwelling unit shall
have same monthly rates as

provided in
7.502(6) (A) (2)
$ 3.50
8.00

2.50