Voluntary first, then pursue divestment
1. For the short term, RMA should make participation in the cable TV system entirely voluntary, as presently is the case regarding broadband and premium TV services. When the system was created in the 80s and there was NO other way to get TV out here, it made sense to assume everyone needed RMA TV and to thus charge everyone for it. Since then hundreds and hundreds of dishes have been put up by residents seeking better signal and programming choices, obsoleting that assumption long ago. And now those households who really only want to see the local channels can now receive them free on any HDTV or HD receiver with a thirty buck indoor antenna and no bill from anybody. RMA is paying very substantial per-customer programming charges for many hundreds of homes who don't watch RMA TV and would gladly unplug from their system and spare RMA from those charges if permitted to drop out. Since those homes will never buy RMA premiums, they generate no revenue and their involuntary participation in the system is pure loss to RMA. Releasing them from the system would save RMA money. The board needs to follow through on its commitment to make the TV/broadband enterprise self-supporting, and should do so by means more stringent than creative and wishful accounting. It should be cut off from expenditure of our general dues entirely, with basic cable billed separately as broadband and premium TV are, and priced in a way to ensure it covers its own operational and reserve costs. Anything less guarantees a continuing bleeding of dues money.
The Board should put a non-binding advisory question on the November ballot, asking the members whether cable TV should continue to be mandatory and supported out of general dues, or should be voluntary and self-supporting like broadband. Dare to ask us, at last.
2. For the long term, I agree with Director Mel Standart that RMA should be aggressively pursuing a way to ease itself out of the role of being the community's cable provider. It has never been something we do well. We only got into that role out of manifest necessity, and it is no longer at all necessary. Despite the infusion of hundreds of thousands of members' dollars in recent deferred maintenance and upgrades, we continue to have significant customer satisfaction problems. Doing it right requires a 24/7 customer service capability. We simply don't have the scale to support that and still provide a cost-competitive product. Doing this right requires a large and stable highly trained staff. We have been going backwards rather than forward on that score. The costs of recruiting, training and retaining an adequately sized and highly trained staff vastly exceed this venture's overly optimistic budget projections. Doing it right also requires a stable management structure, not just the employed managerial staff but also the governing board. Any casual observer knows how volatile we are in both regards. Running a stable business, especially one selling services to non-members who have legal and contractual rights denied to the HOA's own conscript members, simply isn't a good fit with the inherently volatile amateur governance paradigm of HOAs.
The provider relationship under the MBA is a prescription for disaster. New North residents, who will not (barring a miracle) be RMA members, will also be involuntarily charged for RMA cable which many or most will not want, and it will not be their own association, but someone else's, ripping them off. But the contract gives them a right you and I don't have: the right to force an outside audit to determine how to compute the true "cost of basic cable" which they are obliged to pay. This will reveal weaknesses not only in how RMA fails to capture and account for all of its costs (hidden losses already lost in the budget), but also weaknesses in its ability to document and "prove up" some of its costs which it DOES show in the budget, such as the current guesstimates of the portion of the compensation of several high-cost administrative and managerial personnel should be "booked" to basic cable. Another dicey question which will hit the table is how does one apportion personnel and hardware costs between "basic cable," for which they must pay, and "premium TV services" from which RMA skims a profit? Expect that difficult question to be pressed, hard, because nonmembers will suspect their cost share is being padded to enhance RMA's profits on the other line of business. RMA draws lines in that regard which suit its own internal purposes. Those lines may well not hold in an independent audit. The bottom line is that forcing nonmembers to pay for RMA cable is a prescription for dissent and the invocation of legal remedies which are not available to unhappy RMA member customers. I predict it will become an ugly and costly ongoing dispute with the new associations' members at a time when we will really need to be trying to assimilate them, and that RMA, unable to prove up all of its costs, will end up having to SUBSIDIZE those nonmember customers with RMA members' dues.
Director Standart correctly answered Director Martel's question regarding RMA's obligations under the old Cable Agreement and more recent MBA. The developers don't particularly want RMA to be the cable provider. They really don't want any more entanglements with RMA than they have to have. If Comcast, AT&T or another provider could be lured into the market, the developers would be thrilled to sign off on an amendment letting THEM out of the TV deal and enabling them to offer new homebuyers a competent, professional, brand name cable provider. Otherwise it is entirely foreseeable that, when they're building model homes 2-4 years from now, people will STILL be grousing on these public forums about problems with their cable service, which will NOT be good for their sales. The developers, who aren't dumb, know that. The big cable providers won't be interested in RM until it becomes clear that at least several hundred more homes will be built in the next few years and that at least several hundred will follow a few years later, realities which may be more concrete a year or so from now. The commercial providers won't be interested, I imagine, unless those new homes are freed from the obligation to "pay twice" which afflicts the hundreds of RMA homes which have dishes. They would be all the more interested if RMA took the gun away from the heads of its own members and freed THEM from having to "pay twice." The prospect that they could pick up a couple of hundred RMA homes as well as a substantial portion of the new homes market could make it pencil out that much more reassuringly for the cable providers, whose costs of getting here continue to drop and to whom the opening of the initial New North phases is a magic window of opportunity if opened to them as competitors on a level field. Let's not fret and dither our way out of that window of opportunity.
RMA needs to have serious discussions with the developers and providers about the viability of making this transition happen. Just this once the discussions should be conducted by someone who hasn't already made up their mind it would be a bad idea which should be discouraged, which is my informed impression of previous approaches to Comcast when I was involved in this planning process several years ago. I'd suggest the entire board, rather than a designee, should participate and each form their own direct impressions rather than receive filtered information. Substituting the private market pros would provide RM residents with more and better cable choices, and it would get RMA out of an operation which has been a huge source of distraction, heartbreak and expense, and promises much more of the same if RMA indeed goes into the business of selling cable to hundreds or thousands of nonmembers.
RMA also needs to let go of the dream that somebody is going to pay us millions for the right to use our infrastructure. Under the original Cable Agreement by which the developer gave RMA custody - NOT ownership - of the system - the system itself is sort of held in trust, subject to a provision that can divest RMA of the system in favor of an all-developments coop, with no "profit" going to RMA. It's NOT OURS TO "SELL." We could in a transfer fairly conceivably recoup the money we've spent upgrading it, but trying to pocket a huge "profit" from "selling" it will just draw another lawsuit and other costly, distracting legal maneuvers.
Instead of trying to play venture capitalist, the Board should remember why and how RMA got into the cable business in the first place: to ensure that RMA members got TV service at a reasonable price. The market is poised to provide that now, and by squatting on the market RMA is obstructing the market's ability to provide. Speculating with members' money and RMA's future in pursuit of a fiscal windfall was never the purpose of the CATV enterprise until a few years ago, and speculating in the business world is an inappropriate activity for a homeowners' association. That speculation goal is actually working at cross-purposes to the original, legitimate purpose of meeting members' TV needs.
Holding unwilling members hostage to the system to try to enhance its imaginary "sales" value, placing a "book" value on them as conscripts, is, well, just plain reprehensible. I certainly hope that's not part of the calculus in resisting the call to render participation voluntary, though sometimes I wonder if it is, and just isn't being examined in that unflattering light. It should be.
Let's turn the business of TV provision, at which we've never been very good, over to professionals in the private sector, and get back to what we're supposed to be doing, enforcing CC&Rs and maintaining the common areas.
Meanwhile, let's let members choose whether to buy basic cable from RMA. We no longer need forced "socialized TV," and any business plan which depends upon it for its viability is unworthy of us.