from: Columbus Dispatch [1]

Cities rip Senate's cable TV proposal
More competition not worth it, critics say

Wednesday, April 25, 2007 3:36 AM
By Alan Johnson
THE COLUMBUS DISPATCH

Cable video competition might flourish, but cities would suffer under a proposed change in state franchising law, dozens of municipal and township officials complained to an Ohio Senate committee yesterday.

Senate Bill 117, Cleveland City Councilman Matt Zone said, would "serve the best interests of new video providers and incumbent cable companies at the expense of local government."

The bill backed by state Sen. Jeff Jacobson, R-Vandalia, is touted by AT&T and other proponents as the tonic for anemic competition for cable-television customers. They say the proposal, which would shift city-by-city cable-franchise agreements to state supervision, would level the playing field and create more video-service choices and lower costs.

AT&T, which plans to introduce its own cablelike television service in Ohio, is lobbying heavily for the bill. The company, formerly known as SBC and Ameritech Ohio, took out full-page ads in The Dispatch and other newspapers across the state and also began a series of radio commercials.

But officials from the Ohio Municipal League and the Ohio Township Association, as well as city officials from Cleveland to Dayton, are far from sold on the idea. Most strongly opposed it in testimony before the Senate Energy and Public Utilities Committee.

Steve Husemann, executive director of the Miami Valley Communications Council, said Jacobson's bill would have a "crippling effect…on our municipalities."

The council, formed in 1975, is a cooperative venture of eight suburban communities in the Dayton area. Husemann said the council stands to lose more than $300,000 annually in franchise fees. He also is concerned about public right-of-way issues and the potential loss of institutional video hookups linking schools, governments and libraries.

Michael H. Cochran, head of the Ohio Township Association, said his members are opposed to the proposal because "townships statewide will lose millions of dollars."

Jacobson said revisions are being made to the bill, particularly one to resolve cities' worries about public right of way. New video providers such as AT&T sometimes must put large refrigerator-size equipment boxes in public spaces.

Jacobson fired back at some of the critics, charging that higher cable rates caused by the lack of competition amount to "disguised taxes."

AT&T Ohio President Connie Browning said in testimony to the same committee last week that the state needs "the next generation of regulation." She said consumers should decide "whether they want a cable company, a phone company or another provider to be their source for video entertainment."

The company has invested billions of dollars in high-speed fiber optics across Ohio and 12 other states to support its video service, called U-verse.

Time Warner and other cable companies, which stand to lose customers to competition, are neutral on the bill because it also would streamline the franchising process for them.

Eleven other states have approved similar laws, including Indiana and Michigan, both served by AT&T.

But Jacobson and AT&T clearly have a fight on their hands from officials such as Valerie McCall, Cleveland's head of government affairs, who called the measure "an unacceptable encroachment on home-rules powers."

ajohnson@dispatch.com