The Knoxville News Sentinel weighs in, sort of, on the state-wide cable franchise bill [2] being proposed by AT&T.

They cover all the concerns with the bill regarding local control and revenues, build-out requirements, threats to public "cable access" educational and government programming (PEG), and other consumer protection issues.

But there are a couple of curious remarks.

The editorial starts out by saying:

A bill making its way through the Legislature would allow communications giant AT&T to enter the cable television market in Tennessee under the argument that increased competition will result in reduced prices and better service.

They fail to mention that AT&T can already enter the cable television market in Tennessee any time they want, and in fact have been invited by more than one local government to submit a proposal. What are they waiting for?

The editorial closes by saying "It would be great to have a choice of TV providers." Yet earlier in the editorial they note that Comcast, Charter, and Knology already operate in the Knoxville market, generating millions in franchise fees for local governments. These companies were able to negotiate local cable franchises and operate them for years. (And that's not counting satellite providers, who don't pay franchise fees but do provide competition.) Why can't AT&T do the same? What's stopping them?

They mention the "competition" aspects of the bill more than once, and, judging from some of the comments about the editorial, AT&T's massive propaganda campaign has been successful in making this the central focus of the debate in the minds of consumers.

So will the bill increase competition? And what about the other effects? Who knows? But we can look to states where the bill has been passed. Texas is one of them. They have been operating under similar legislation for about two years now. What has happened there?

For one thing, Houston may lose it's public education and government television [3] due to changes in the funding formula under the new statewide cable franchise law.

On the other hand, a survey of 800+ selected Texas residents in three markets, sponsored by a "cable competition" advocacy group, found that competition in these markets did reduce fees by as much as 25%. Other analysts note that some of that competition, however, came from satellite providers. Regardless, the loss of PEG programming is a small price to pay to save a few bucks on your monthly cable bill.

And according to a Texas Public Utility Commission 2007 report [4]:

Cable television (CATV) and non-facilities based Internet Protocol (IP) providers are two relatively new competitors that provide customers with more choices for the provision of their telecommunications and broadband services. CATV telecommunications providers, at this point, are primarily offering service in the urban and suburban areas, as opposed to rural.

But this should come as no surprise. Just as Texas was adopting state-wide cable franchises, SBC (now AT&T) told industry analysts [5]:

During a slide show for analysts, SBC said it planned to focus almost exclusively on affluent neighborhoods. SBC broke out its deployment plans by customer spending levels: It boasted that Lightspeed would be available to 90% of its "high-value" customers — those who spend $160 to $200 a month on telecom and entertainment services — and 70% of its "medium-value" customers, who spend $110 to $160 a month.

SBC noted that less than 5% of Lightspeed's deployment would be in "low-value" neighborhoods — places where people spend less than $110 a month. SBC's message: It would focus on high-income neighborhoods, at least initially, to turn a profit faster.

Regarding consumer protection, the Texas Public Utility Commission report says:

The Commission’s authority to resolve customer service complaints about cable and video providers operating under CFAs [Cable Franchise Agreements] is unclear. PURA 8 66.008 specifies that the Commission has no jurisdiction to process complaints in local markets where two or more non-satellite providers offer video service. However, in markets where the incumbent cable company has replaced an expiring municipal franchise with a new CFA, the municipality is no longer the franchise authority and it is unclear who has jurisdiction to process customer complaints. The Commission concluded at its April 13, 2006, Open Meeting that it does not possess clear authority to address these complaints.

At any rate, AT&T is spending hundreds of millions to "educate" consumers on the benefits of "increased competition" and hiring armies of lobbyists to push these bills through state legislatures. When they finally come up for a vote, they usually pass. Such will likely be the case in Tennessee, where fiercely "independent" free-market conservatives rule the roost.

It's ironic, though, that they will essentially give newcomer AT&T, which now controls most of the telecom industry in the South, a regulatory leg up over their established cable competitors who had to play by the rules on a level playing field to negotiate local franchises.