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from: Blandin on Broadband

Statewide Cable Franchising (HF2351) Passed with no Recommendations

I have tried (not really hard) to find the testimony from the Statewide Cable Franchising hearing on April 13. It wasn’t televised. There was no video archive. So tonight I listened to the audio archive. (I have blogged about previous hearings.)

I was urged to follow up for 2 reasons. First I emailed the Committee Administrator (Elizabeth Emerson) who kindly sent me the following update:

HF2351 was heard in the Telecom Committee over the course of 3 weeks, the last being April 13. On April 13, the Telecom Division moved to pass HF2351 with no recommendation to the Committee on Commerce and Labor. Over the interim, I will be working with the author and Telecom Chair (Sheldon Johnson) to put together a working group that will dissect the bill and hammer out details.

Second, I ran into Mike Wassenaar from St Paul Neighborhood Network at the Minnesota Council on Nonprofit conference yesterday. (More on that conference in a later blog post.) It was great to see him and he was able to fill me in a bit. He told me that AT&T suddenly came out against the proposed bill – which was a turn around from the first hearing I saw! It was enough to drive me to listen to the audio archive.

OK my usual stipulation – I’ve done my best to take notes. Readers are asked to please correct me where they can.

Jerry Knickerbocker from Minnesota Telecom Alliance

Minnesota needs this bill for the following reasons:

* Cable competition in Minnesota is limited. We have 853 cities and 46 of them have competitive cable providers.
* Current legislation dates back to 1973
* The FCC says competitive cable is good for consumers. Cable subscription is up 90% in the last 10 years. Rates are down 15-40% were there is competition.
* Phased, rollout approach will help telcos as it helped cable companies.
* Dense neighborhoods will probably be served first; often those are inner-city neighborhoods.
* If you support statewide broadband deployment it makes sense to support this bill.

What is happening outside (or beyond) Minnesota?

* FCC reports show that it’s difficult to get into market. A 90-day limit on franchise approval would help
* 15 states have already gone with statewide cable franchising.
* An FCC order says that local authorities can’t require universal build out.
* Some cities have special franchising that may or may not be affected by the FCC order.
* Doing nothing is a boon for the status quo.

Question from Rep Masin – Are you aware of any telcos who have been denied franchises from current local cable commissions?

Yes. It happened but it depends on how you define denied.

Juanita Brown from AT&T

Generally AT&T supports more choices for consumers but they cannot support this version of the bill. They are opposed to 2351 but offer the following key components for a successful bill:

* Need to streamline statewide applications
* Need fair franchise fees
* No build out requirements – it’s the greatest barrier

There are problems:

* CLEC-type applications will be a deterrent and are not necessary for video the way they are for phone service
* The definition of gross revenues is problematic. A franchise fee is OK but the current definition is too vague. Need to have terms that are more predictable.
* The advertising requirement is too much. (Must reserve 10% of ad space for competitors)

Telephone companies are not looking to provide cable. They want to provide IPTV.

Question: Is there a bill that you think it good?
Iowa and Kansas.

Question: What is the role of AT&T in Minnesota?
AT&T plays a general role. They are concerned about video reform and some day may have an interest in providing video nationwide.

Jeff Lueders from MACTA

MACTA is opposed to the proposed bill. For 25 years current, local cable commissions have been improvising upon the process of managing cable. It doesn’t make sense to forget that institutional knowledge and bump the process to the state.

Local commissions are not opposed to competition. There are 50 communities with competition. Qwest and AT&T have not approached any of the local commissions for franchises. Neither plan to enter the Minnesota market.

Local commissions are better for quick responses and customer service. Broadband deployment should be universal.

Many states have not passed statewide legislative.

Main concerns are:

* Build out
* No means to challenge redlining claims.
* The onus to transmitting Public Access programs to the providers will fall to the city, which could be prohibitively expensive.
* Public access programming needs to be supported at a rate that isn’t necessarily simple but does sustain public programming.
* Right of way authority should remain local.

Question: There were lots of questions about Rosemount. Apparently there is a FTTH (fiber to the home) provider who applied for a franchise to serve a upper end housing development. They got it but they agreed to deploy services to the whole community over 6 years. They haven’t many any strides to deploy services beyond they housing development. The question is – who should follow up on the fact that the promise has not been fulfilled.

Question: Would the cable commission be interested in rate regulation?

Historically the cable commission did monitor rates but the FCC took away the right/responsibility if a community is 15% is served by satellite.

Dave Engstrom from Pace Minneosta

Problems with the bill:

* Loss of local control. Local control builds a local identity.
* Losing build out is a critical element and extension of local control and a move towards digital divide.
* No need to act at this time.

Pierre Wuollet of City of Minneapolis

The main problems are:

* State versus local franchising.
* A two-tiered system based on the type of company versus service.
* Lack of customer service obligations and public access programming.

Question/Comment: Right of way is not an issue in the bill.

The plan is to get an FCC expert to help and establish a working group to work on the bill. Now it will be going to Labor & Commerce.

Ann’s Notes: Listening to an audio archive of a legislative hearing is brutal! I would love to hear from organizations that are more neutral than cable companies, commissions, telephone companies, or public access programmers. Like Mike Wassenaar, I would like to know what’s up with AT&T. Why are they so interested in MN if they don’t have plans to get into the market? What caused the change in opinion on the bill?