Changes are coming to discounted bulk cable starting Jan. 1
FROM THE GRF
A Message from the Golden Rain Foundation, Leisure World Seal Beach’s Management Company Changes are coming to your Leisure World community cable TV programming on Jan. 1, 2023. That’s when the current bulk cable provider contract expires. Depending on what the 16 Mutual Boards decide, you may be able to subscribe at a discounted bulk rate. Or you may choose whether you are willing to pay full the retail rate like those outside the community.
While any cable TV agreement depends upon decisions your mutual board makes, GRF wants to collect impartial information to help residents determine the best options for their own in-home entertainment and information preferences.
Some basic questions:
What’s GRF’s stance on the competition between the two rival cable providers?
GRF received approval from all 16 mutuals in both 2021 and again in early 2022 to determine whether companies would be interested in running a bulk cable service among Leisure World’s 6,608 units.
On June 2, 2022, GRF presented outlines from five companies to the mutual presidents. At the time, only one company, Interact Solutions, answered the community’s central service specification: cheaper prices offered without 100% of residents subscribing.
Some mutual directors have confused the acknowledgement that Interact Solutions was the only provider in early June who satisfied this requirement as GRF’s “endorsement” of Interact Solutions. GRF does not endorse any potential provider. Superwire, the community’s current service, which chose not to submit a bid in the spring, entered the competition 10 weeks later.
What’s the situation now?
Interact Solutions now has contracts in Mutuals 5, 7, 8, 9, 10, 11, 12, 14 and 17. Mutual 15 reportedly supports Superwire. The remaining six mutuals—1, 2, 3, 4, 6 and 16—haven’t agreed to either offer.
Does that cause a problem?
Basic economics tells us that a bulk deal whose anticipated price is based on 6,608 customers becomes unworkable when two companies have to split the pie. The result of the mutuals not being able to agree on a single provider? A viable breakeven point for either of the providers may force them to raise prices soon after their entry into the community.
Are there other complications?
Time has become the biggest issue. As of Nov. 1, only two months remain for either supplier to install whatever infrastructure is necessary to deliver their service, enroll their customers, develop their billing systems, offer instruction for new customers and roll out their service.
Why were there delays in the mutual boards deciding on a provider?
The mutuals, which had initial pricing information and service features from Interact Solutions on June 2, 2022, were expected to be able to approve the contracts during their June and July mutual board meetings. The mutuals were only asked to approve Interact technicians installing transmission boxes in building attics. However, many mutual directors, apparently to protect their residents, asked mutual lawyers to examine the consumer contracts residents would be asked to sign. This process meant more weeks passed.
Another significant complication arose just as those legal reviews were returned. Superwire, which had been Leisure World’s cable provider for nearly two decades, had not made an offer during the spring’s solicitation period. On Aug. 19, 2022, Superwire communicated a late offer. This prompted another period of mutual-board lawyering and comparison of the Superwire consumer contract to Interact.
Why didn’t GRF decide upon a single cable provider and sign a contract with it?
During the past 20 years, GRF repeatedly signed a contract with Superwire to provide discounted cable services to the community. However, some mutual presidents voiced strident concerns that GRF didn’t have the legal authority to sign contracts binding each of the community’s 16 mutual corporations to a joint agreement.
GRF’s lawyer agreed that GRF’s operating agreement did not provide clear-cut authority. The lawyer’s reasoning? Even though GRF’s operating agreements clearly give some rights to contract for the entire community—say the all-encompassing agreements for water, trash collection and sewers—the documents did not specifically define whether entertainment programming fit into that category of “utilities.” For that reason, GRF turned over the cable service selection process to each of the 16 separate mutual corporations that own the community’s housing.
What’s going to happen?
We can’t predict. Two companies splitting the community’s subscribers introduces the question of whether either can maintain their original quoted price for more than the short term. The critically short time before any new system must become operational causes concern too.
What are my options?
Patience and caution may be the best advice. Interact, Superwire or another affordable cable service may successfully be established before Dec. 31. If not, residents can choose to subscribe to a full cable package at retail rates from Spectrum. Even if you now receive Spectrum programming, you likely will have to resubscribe and sign a new contract. You could also “cut the cord”: use a wireless connection and the streaming services to assemble your own programming array.
Are there circumstances in which GRF could sign a bulk cable agreement?
GRF could sign a bulk cable agreement for the whole community, but only if each of the 16 mutual boards ceded that power to GRF to negotiate and sign on their behalf.
