from: Knoxville News Sentinel [1]

Is Tennessee Ready for AT&T to Enter Cable Market?

May 18, 2007

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.

The bill represents one of the most hotly contested issues this session. Both sides are armed with lobbyists and top-flight public relations firms to persuade lawmakers to approve the measure for AT&T or reject it on behalf of the cable TV industry.

AT&T’s bid is being touted as adding competition to the marketplace where cable companies have had a virtual monopoly through their franchises with local governments. Competition is a good thing, and the cable services could use a dose of it, but AT&T’s proposal has some glaring trouble spots.

Should the bill pass, one of the more significant changes would involve a shift from local oversight of cable television to oversight by the state. That no doubt is why groups representing local governments such as the Tennessee Association of County Mayors — Knox County Mayor Mike Ragsdale is president — argue that the legislation poses a threat to local control and the revenue local entities receive from franchise fees.

The fees are no piddling amount. County Commissioner Mike Hammond, chairman of the commission’s cable TV committee, said cable companies Comcast and Charter paid $3.9 million in franchise fees to Knox County in 2004 and 2005. The city receives about $1.5 million annually in fees from Comcast and Knology.

AT&T says the franchise fees that flow to local governments will continue if the legislation passes, but will they be roughly the same amount? The phone company also says local governments will continue to control rights-of-way and locally produced programming, despite fears that kind of programming will disappear. But will local governments have the control they need if true authority is in Nashville?

Another concern is that AT&T will “cherry pick” the wealthiest neighborhoods for service, leaving low-income and rural areas high and dry. To the contrary, AT&T claims it has no incentive to redline low-income or minority areas. Nevertheless, the legislation does not include the “build-out” requirements the cable companies have faced.

The most significant change for consumers, however, might well be the loss of local control. Customers will have no local government agency with whom to lodge a complaint over poor service, improper billing or other problems where a controlling authority is essential.

There is some speculation the bill might not get to the floor of either the House or Senate this session, so contentious are the issues involved. That might be best because a full debate over the legislation has not been aired in either chamber.

Right now, AT&T and the cable companies are angling to be on top when the debate is done. Lawmakers should take control of the legislation and make sure consumers are the eventual winners.

It would be great to have a choice of TV providers. The General Assembly should find a way to make that happen without sacrificing quality service and accountability for all Tennesseans.