from: The Tennessean [1]

Don't turn local franchising of cable over to the profit sector

By ELLIOTT MITCHELL
Wednesday, 05/16/07
Tennessee Voices

As a volunteer board member of Nashville's Metropolitan Educational Access Corp., I have been extremely interested in AT&T's proposal for video-franchising legislation because it threatens the future of public, educational and governmental access (PEG) channels across Tennessee.

I was quite surprised to hear Sen. Bill Ketron tell a committee May 8 that that the measure of success in the cable TV industry is the number of subscribers: The more the better.

With all due respect to the honorable senator from Murfreesboro, customers come with an overhead — a cost of doing business — especially in the service sector, which includes cable TV. In cable, some costs are fixed across all customers, but other costs vary widely depending on where the customer is located.

The overhead for serving 5,000 customers in a sparsely populated area is considerably greater, per customer, than the overhead for serving 5,000 customers in a densely populated area. This is why cable systems build from the dense areas first out to the contiguous areas where each customer becomes more difficult to reach. This is why Willie Sutton robbed banks, "because that's where the money is."

Citizens such as myself rely on a dynamic in our government between those who seek to regulate everything that moves and those who prefer minimal regulation in the belief that competition best determines how corporations work in society. At some middle point, however, we must accept that not every corporation sees putting all customers first as the road to profitability. At this point, the proper role of government, as an agent of the people, is to be certain that vital services are available to the greater number of citizens, not just those whom a corporation might select to serve.

And make no mistake about it: "Wireline communication" is vital to the public interest. Cable might look like a desirable but non-essential commodity in our state, but when it is so closely woven into voice and data communications, as it now is, it becomes an actual lifeline.

Existing procedures for granting cable TV franchises works because local communities, through their elected officials, determine how their community is best served. They work because cable operators are contractually obligated to provide service as widely as the franchise agreement demands. They work because sparse populations are served as well as dense populations. They work because disadvantaged people are not denied services because they come with a higher overhead.

By destroying this system of local control and depending on competition and a company's largess to serve the people of Tennessee adequately, this General Assembly may be ushering the first great train wreck of this century in our state.