from: The Ledger [1]
Television Bill Merits Crist’s Veto
May 15, 2007
Finally, the Florida Legislature had no problem agreeing on something: In overwhelming votes (117-1 in the House, 30-3 in the Senate), lawmakers voted to allow telephone companies to enter into local cable-television markets.
They did this in the interest of “furthering competition.” Unfortunately, in Tallahassee that means giving the telephone companies a different set of rules than used by the cable-television industry — while at the same time placing the consumer at a disadvantage.
If Gov. Charlie Crist signs the bill, it will allow telephone companies to enter into local cable-TV markets simply by applying to the state Department of Agriculture and Consumer Services for a statewide franchise, instead of winning approval from individual city councils and county commissions.
But more bad than good can come out of this bill — reason enough for Crist to veto it. With a governor’s veto attached, a good deal of legislative support for the bill would vanish until some glaring flaws can be resolved.
Advocates of the measure say rates will go down with more competition in local markets by eradicating the cable giants’ minor monopolies created by the current franchise-awarding system.
Research bears that out. One Associated Press report cited a Federal Communications Commission study that said across the country bills for consumers in competitive markets dropped 21 percent since deregulation.
Proponents also point out that the phone companies had to surrender the final phase of a three-part local-service rate hike adopted by lawmakers in 2003. Rep. Trey Traviesa, R-Tampa, who sponsored the bill, pegged that amount at $150 million.
One more point in the phone companies’ favor is that the cable companies are already infringing on their turf by offering telephone service through a high-speed Internet connection. So it seems fair to let them into the cable TV industry.
Competition, of course, is healthy for all. More providers of any good or service offers freedom of choice, and that, in most cases, means the benefit of lower prices.
But the deregulation proposal offers plenty of reasons to be skeptical of the claims.
The foremost is that the last time the phone companies lobbied for and got deregulation, Florida consumers got hit with a record-setting rate increase. Brad Ashwell of the independent Florida Public Interest Research Group said the 2003 bill allowed phone companies to pocket an extra $300 million in higher rates. We can’t help but wonder why phone companies would forgo a guaranteed $150 million in new rates when they could come up empty in an expanded cable-TV market. We also are curious about what precludes them from challenging existing cable-company franchises, whose market share has already eroded somewhat by competition from satellite providers, when those come up for renewal before local governments.
Ashwell also noted in an opinion piece that AT&T told investors that it planned to cherry pick wealthy customers, defined as those who spend $160 or more a month in cable TV, phone and Internet service. Only 5 percent of so-called “low value” consumers, or those who spend less than $110 a month, would be able to get such services.
The measure also repeals a provision that forces the cable companies to “build out” to all the customers in their service areas, which opponents say will curtail access to customers in rural or low-income areas. And it could spell the end of public-access channels, such as Polk Government TV, that broadcast government meetings as well as educational programming.
And, of course, the final down side is that lawmakers turn cable regulation over to faceless state bureaucrats in Tallahassee instead of leaving it to people from the community the cable companies now serve.
The current method is likely flawed and could probably be improved with more options for consumers. But this plan has too many flaws and inspires too many doubts. Gov. Crist should veto it until the bugs are worked out.