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from: Madison.com

Wisconsin Cable Bill Proponents Fudge Facts

From Wisconsin State Journal, July 30, 2007
By Brad Clark and Barry Orton

The facts simply don’t support the State Journal’s July 24 editorial praising the so-called “Video Competition” bill.

Everyone favors cable competition. But AT&T (the corporation behind this legislation) has been free to compete with cable providers for over a decade, and has chosen not to.

The agreement AT&T swiftly negotiated with the city of Milwaukee as well as the local franchises Verizon has entered into — more than 700 to date — demonstrate conclusively that local governments have not been holding up competition.

Your claim that the bill would allow competing providers to “negotiate a single contract with the state” shows a misunderstanding of the bill. The state could not negotiate anything: State franchises would be empty boilerplate, held in perpetuity, and freely transferable without state oversight.

No wonder both the cable companies and AT&T find the bill’s relief from “the tedious task of negotiating cable television deals with hundreds of individual communities across Wisconsin” worth the fortune they have spent on lobbyists.

You belittled legitimate concerns over the bill’s financial impact. Franchise fees collected from cable companies are the “rent” that private, for-profit companies like Charter pay for the use of public rights-of-way.

The $2 million that Madison collected from Charter in 2006, far from being a “convenient” and “generous revenue stream,” represents real property tax relief for Madison taxpayers every year.

This bill fails to support the “need for government-related programming” such as Madison City Channel. While the bill preserves channels for such programming, it eliminates the small fee subscribers pay for their operation. For Madison’s Channel 12, city subscribers pay less than $5 annually for access to city government. Compare that to the hidden cost of some $3 per month for ESPN.

Madison will be faced with the choice of either closing this door on local government, or raising property taxes by $250,000 a year.

You also call the recent demonstration by Mayor Dave Cieslewicz and state Rep. Spencer Black on the alarming size of AT&T’s fiber conversion cabinets a “scare tactic.”

But the reality is that the only reason AT&T intends to install these boxes in the terraces and backyards of Madison residents is that they don’t wish to make the financial investment to run state-of-the-art fiber optics to subscribers’ homes.

That this scheme is far from 21st-Century technology is confirmed by the fact that AT&T itself has said that in areas of new construction, they plan to run fiber directly to the home.

Finally, you repeated the discredited notion that passage of this bill will lead to “savings for Wisconsin consumers.” The reality is that in state after state, from Texas to Virginia, the passage of similar legislation has not resulted in lower cable rates. Rates, which are primarily driven by the cost of programming, have continued to increase everywhere bills like this have passed.

Competition is a good thing and we’re in favor of it, but don’t pass along the false claims made by industry-sponsored groups, which have little credibility in this debate. By echoing their arguments, you diminish your credibility as well.

Clark is Madison’s television coordinator and station manager for the City Channel. Orton is telecommunications professor at UW-Madison.