from: Sun Sentinel [1]

Titans battle for control of cable TV in Florida

By Josh Hafenbrack
Tallahassee Bureau

April 28, 2007

TALLAHASSEE · They've broadcast their talking points in campaign-style commercials, using the TV screens they're fighting over to argue about who offers the best deal for Florida cable customers.

Each side has dispatched platoons of lobbyists -- more than 100 in all -- to influence legislators.

Now, the Legislature is poised to settle a big-money brawl between cable and phone giants, deregulating the state's cable industry in a deal that should mean discounts for consumers. But some warn it could also deepen divisions between the rich and poor.

Telephone titans such as AT&T and Verizon want a foothold in the cable market so they can bundle cable TV programming with their existing wireless Internet and phone services.

Seeking to add Florida to a wave of states moving toward more competitive cable markets, the state Senate on Friday passed legislation (HB 529) to do away with the regulatory framework that has governed cable TV in Florida for decades.

Just before the 30-3 vote, Sen. Dave Aronberg, D-Greenacres, called it a "particularly brutal fight between the telecom people."

"This is one of the best consumer bills we will pass this session," he said .

With the Senate and House having approved variations of the same legislation, differences must be resolved before the session ends Friday. The bill then would go to Gov. Charlie Crist, who said he'd sign it if he concludes it's a good deal for consumers.

At issue: local cable franchising, which requires companies to negotiate separately with Florida's 67 counties and 435 municipalities, a process that can drag out for years and has produced monopolies in most markets. The bill replaces that system with a streamlined franchise that would be valid statewide.

The bill adopted by the Senate also offers a compromise on the most hotly debated issue: whether new cable providers can "cherry pick" upper-class neighborhoods and skip low-income areas. They wouldn't be required to sell cable to everyone in areas they chose to serve, but they would be banned from discriminating based on income or race.

As the legislation gained ground, the influential and rival industries took to the airwaves to defend their interests and enlist consumers.

Phone companies hammered cable providers for, on average, almost doubling rates in Florida in the past decade, and claimed that greater competition would bring lower prices.

The cable giants shot back that phone companies wanted to cater only to wealthy neighborhoods . In recent weeks, they aired ads tailored to each Senate district, broadcasting the e-mail addresses and phone numbers of local senators.

At the state Capitol, the lobbying was fiercer. Phone companies BellSouth, AT&T and Verizon alone deployed a total of 88 lobbyists.

BellSouth had spent at least $1.1 million on contributions to candidates and political committees in the 2006 election cycle. Verizon and AT&T poured a combined $775,000 into their political committees.

Cable concerns spent heavily to influence the political process in Florida, as well. The Florida Cable Telecommunications Association, which includes Comcast, contributed $142,500 to candidates and deposited at least $540,000 in its political action committee's war chest in the 2006 cycle.

"We don't have the money, the politics or the pull to do that," said Walt Dartland, president of the Consumer Federation of the Southeast, which opposed the bill because of fears it would allow cable providers to skew services towards well-to-do areas.

Texas, California, Virginia and others already have deregulated the cable industry, a trend that started in 2005. Nationwide, customers in competitive cable markets saw their bills drop 21 percent since deregulation, according to the Federal Communications Commission.

Much of the savings is derived from so-called bundling. In the Tampa area, for example, Verizon won local franchising licenses and sells cable in four counties. Going to head-to-head with Bright House Networks, Central Florida's largest cable provider, Verizon has slashed its bundle price by almost $30, to $99.99 a month, a spokesman said.

Yet how much South Florida consumers would save as a result of the new law is unknown. A study paid for by the phone companies estimated yearly savings for cable TV subscribers in Palm Beach and Broward counties at $88.

"I hope the effect will be lower cable bills," said Sen. Steve Geller, D-Cooper City. "Can we predict what's going to happen? No."

In an interview, AT&T spokesman Don Sadler strongly suggested the company would challenge Comcast and sell cable in South Florida. AT&T last year bought BellSouth, Florida's largest local phone provider.

"The [cable] component is an integral part of our bundle strategy," Sadler said. "I can pretty much assure you we're going to look at every market we serve."

Consumer groups weren't convinced any savings would be spread evenly. They prefer an approach that would have forced new cable providers to offer service to a certain percentage of households to be able to sell to any. That would have ensured the benefits of competition were more widespread, they said.

Staff Researcher Barbara Hijek contributed to this story.

Staff Writer Josh Hafenbrack can be reached at 850-224-6214 or by e-mail at jhafenbrack@sun-sentinel.com.