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from: Hartford Business

LETTER TO THE EDITOR
AT&T Got Special Favor

12/03/07

To The Editor:

I take this opportunity as the state’s Consumer Counsel to address several inaccuracies in a letter to the editor filed on Nov. 12, 2007 by AT&T’s president in response to an editorial in the Journal (“Scrambled Signals,” October 29, 2007). This is a situation in which AT&T’s cries about fairness ring false: the loser here will be the state’s video services consumers and indeed the market for those services itself. AT&T has spent millions of dollars in a campaign around the country selling legislatures and regulators on the magic that could result from freeing it from regulation, without mentioning that where this one company “wins,” consumers and its competitors must necessarily lose.

AT&T challenges the Journal’s statement that the new 2007 cable franchise law operates “almost exclusively to [AT&T’s] benefit,” but the truth is that AT&T recently presented a superior court judge with legislative history indicating that indeed, the legislation was solely designed with AT&T specifically in mind. AT&T was evidently delighted when the superior court judge affirmed that reasoning when holding in their favor and allowing them to utilize the provisions of that new statute, claiming that doing so fulfilled the objectives of the new statute.

AT&T alleges that existing cable operators have been granted “monopolies decades ago” when in fact their franchises are non-exclusive and have always been subject to overbuilding by any entity interested in doing so, as in fact AT&T’s predecessor, SNET, did in the late 1990s when it rolled out 4,000 miles of cable TV infrastructure. When SBC bought the company in 1998, it relinquished the franchise, stopped service, and lost millions of dollars of ratepayer funds as stranded costs. Similarly, AT&T claims that consumer protections will remain in place, with the exception of build-out requirements, when in fact dozens of public policy goals that have guided the actions of cable providers over three decades may be reduced or lost .

AT&T claims that the video law does not provide it with an “unfair advantage,” when the legislative history it cited in court illustrates that AT&T enjoys a lower cost point, not because of a superior business plan and execution, but because the state legislature granted it a special favor in the creation of an unlevel playing field, at the expense of consumers. This imbalanced market for cable services will inexorably lead to a downward spiral of consumer services across the board as cable operators are forced to cut consumer services in order to match this artificial price point.

The OCC has worked hard during the last decade to implement competition in Connecticut for cable TV services, believing it is the only way to lower the high prices, improve customer service, and bring innovations and flexibility to programming. We’re very disappointed that the market is now at this imbalanced crossroads, but we will be working hard to assure that consumers receive the protections remaining under the new statute.

Mary J. Healey

Consumer Counsel

Office of Consumer Counsel

State Of Connecticut