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The city of Tucson and its cable-television franchisee, Cox Communications, have made much progress in negotiations to renew Cox's license. After 10 months of informal on-and-off talks, we believe small concessions on both sides could bring cable peace to our community.

Officials from the city and Cox met separately with the Star's editorial board last week. Those sessions revealed to us that the two sides are probably closer than they realize to agreeing to renew a license that expires later this year.

As in any good compromise, neither side should expect to be completely happy with the deal. But with minor modifications, a proposal now on the table would allow both parties to make money and serve Tucson cable customers.

The city has moved away from its rigid stance of wanting to preserve most, if not all, of the eight analog public access, education and government, or PEG, channels on the cable system. The city controls four of those channels, Pima Community College has two, and the University of Arizona and the Tucson Unified School District have one apiece.

Cox and the city are in agreement that under a new deal the city will get three analog channels and one digital channel to allocate in whatever way it sees fit. Also, Cox would provide 2,000 hours of on-demand PEG programming.

In addition, Cox has agreed to enter separate agreements with the University of Arizona and Pima Community College for one digital channel apiece.

Analog channels are those viewable by subscribers to Cox's basic and expanded-basic services. Digital channels and on-demand programming are viewable only by customers who pay extra for Cox's digital services and a required set-top cable box.

Other key differences

The remaining key requirements are:

● Addressing the "digital divide," the claim that poor households won't have access to PEG channels on the digital tiers.

● Getting written assurance that Cox will continue to provide the higher-education digital channels for the UA and Pima College.

● Getting written assurance that Cox will maintain free service for K-12 schools.

A wildcard in the negotiations is an audit that found Cox may owe license fees to the city. Joseph Van Eaton, a Washington, D.C., attorney assisting the city in its negotiations with Cox, said the cable company owes more than $2 million in fees.

Cox disputes the audit findings and has said that the city has never asked for the money.

It's unclear how the audit has or will impact the negotiations. The city may see it as a bargaining chip, while Cox may consider it an issue that can be settled along with the license renewal.

Addressing the digital divide is tricky. The city wants Cox to create a tier of PEG channels similar to the digital tiers it now has that cater to sports fans or Spanish-language viewers.

The city says Cox could charge PEG aficionados somewhere from $3 to $5 monthly for rental of a set-top box that would allow low-income viewers access to digital and on-demand PEG offerings.

Cox counters that poor customers are actually more likely to have digital cable, so a special tier to address the digital divide isn't needed.

In a letter to the City Council this week, Anne Doris, vice president and system manager for Cox in Southern Arizona, said: "Contrary to conventional belief, household income is not a significant predictor of whether a customer will have digital service in Tucson. Cox's highest digital penetration rates are in the most economically challenged parts of the city."

Cox suggests that if the digital divide is such an important issue for the city, then the city could subsidize the service to poor families. The city, Cox suggests, could qualify customers to receive digital cable and Cox would provide the service in exchange for a credit against the license fees it pays the city.

We agree with Cox's position on the digital divide. It doesn't make sense to create a special tier that would have a handful of channels at most and, we believe, appeal to few cable customers. It's unlikely many Tucsonans would want to pay an extra $5 a month to see more PEG programming when they would already have three PEG channels at their disposal.

A feasible compromise

Where we believe the cable company can compromise is in assuring the continuation of higher-education PEG channels and cable service to the community's schools.

Doris said it is the company's intention to continue to provide service to schools. She stated in the letter to the city that Cox wants to enter a joint-venture agreement with the schools for such service. The city wants the school service included in the new license agreement, just as it is in the soon-to-expire pact.

We believe the city's request is reasonable and that Cox should make school service part of the formal agreement.

Likewise, Cox should make its promise to provide digital channels to the University of Arizona and Pima Community College part of the license. Cox currently has a deal with the UA for a digital channel and is striving to reach a similar agreement with Pima College.

The outside deals notwithstanding, Cox should provide written assurance within the license agreement that those two digital channels will always be provided.

"The issue is, do we want to have those channels corporately controlled by Cox or publicly controlled by an elected mayor and City Council?" asked Mike Letcher, deputy city manager of Tucson. "We'd like to have public control of those services, that's what it boils down to.

"We don't want to put the community in a position where we could lose those channels. We want that safety net for the community."

City has a deadline

The city has set a deadline of Wednesday to reach an agreement in principle with Cox; otherwise the City Council may seek a formal request for license renewal under the Federal Cable Act.

The formal process would be long and costly. Doris estimates that the city may end up paying somewhere from $500,000 to $750,000 in legal fees if negotiations are done formally. That tab would be picked up by Tucson taxpayers.

"Our informal offer comes off the table when they ask for a formal offer," Doris said.

Cox's offer may not give the city everything it wants, but with the minor changes we have suggested it wouldn't be a bad deal for the city or the community. Tucson would still have more PEG channels than any other city in Arizona, and it would receive license fees in excess of those that would be required under a new state law passed last year.

By reaching an agreement, Cox would maintain its hold on a growing television market that Doris said "is a very important part of our company's operation."

We urge both sides to reach a deal soon and save Tucsonans the cost of a formal renewal process.