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from: KnoxNews

AT&T statewide cable franchise round 2: KNS already in their pocket

Submitted by R. Neal on Mon, 2007/12/03 - 9:31am.

The AT&T statewide cable franchise bill is headed back to the Tennessee legislature. Not surprisingly, the Knoxville News Sentinel has once again taken the pro-big business, anti-consumer anti-local government position and endorsed it (see below).

I guess AT&T and the KNS are going to keep at this until they wear down opponents of the bill. But just as AT&T and the KNS can trot out the same old propaganda in favor of the bill, opponents can program hotkeys with the same rebuttals from last time around.

KNS: "AT&T claims the legislation will bring competition for cable TV services, which in turn will lower prices for the average customer because of the choices available."

REALITY: Comcast, Charter, and Knology already operate in the Knoxville market, generating millions in franchise fees for local governments. These companies were able to negotiate local cable franchises and operate them for years. (And that's not counting satellite providers, who don't pay franchise fees but do provide competition.) Why can't AT&T do the same? What's stopping them? In fact, AT&T has been invited by local governments to submit proposals. Curiously, they haven't.

KNS: "AT&T has said, however, that local governments will continue to receive franchise fees of up to 5 percent, they will continue to control access to public rights-of-way, and they will continue to have locally produced programming."

REALITY: With local franchises, communities can negotiate their own franchise fees and included requirements for build-out, customer service and quality standards, and for making local community access channels available. These negotiations can take into account each community's unique needs. The statewide franchise legislation proposed last time around did not have these requirements or the requirements weren't as strict. According to the Tennessee County Services Association, "The proposals would set up a single entity that would grant franchising rights, which include local highway rights-of-way usage provisions. The proposal prohibits build out provisions. It also causes problems with consumer protection, public information channels, emergency notification access opportunities, and services to schools and libraries. It also limits our abilities in verifying the accuracy of payments, and our ability to perform meaningful applicant due diligence."

KNS: "Another aspect of criticism centered on a charge that AT&T would cherry-pick the wealthiest neighborhoods for service, leaving low-income and rural areas to fend for themselves. AT&T answered that it would apply nondiscrimination standards with regard to new entrants and that it has no reason or incentive to redline low-income or minority areas."

REALITY: From USA Today: "During a slide show for analysts, SBC (now AT&T) said it planned to focus almost exclusively on affluent neighborhoods. SBC broke out its deployment plans by customer spending levels: It boasted that Lightspeed would be available to 90% of its "high-value" customers -- those who spend $160 to $200 a month on telecom and entertainment services -- and 70% of its "medium-value" customers, who spend $110 to $160 a month. SBC noted that less than 5% of Lightspeed's deployment would be in "low-value" neighborhoods -- places where people spend less than $110 a month. SBC's message: It would focus on high-income neighborhoods, at least initially, to turn a profit faster."

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from: Knox News

Competition, choice key in cable debate

Monday, December 3, 2007

The legislative fight over a proposal to allow communications behemoth AT&T to jump into the cable television market is heading for a rematch, with both sides arming themselves for the battle ahead. That includes doling out large sums for public relations and lobbying campaigns to convince lawmakers and the public of the rightness of the respective causes.

The issue appeared to dominate business in the last session, including lobbying expenses of several million dollars. One legislator went so far as to refer to the Competitive Cable and Video Services Act as the Lobbyist Employment Act. Then, the issue went to the back burner before a legislative vote could be taken, with the promise that it would return.

And it has returned with a vengeance.

Basically, AT&T's proposal would allow it to obtain a statewide franchise to operate cable television in Tennessee. AT&T claims the legislation will bring competition for cable TV services, which in turn will lower prices for the average customer because of the choices available. AT&T also says it anticipates the creation of more than 2,000 industry jobs if its proposal receives legislative approval.

Similar laws have been enacted in 17 states, including six of the eight states that border Tennessee.

Opposing AT&T is the cable television industry in Tennessee as well as organizations that lobby on behalf of local governments. They are a force to be reckoned with, and last year, their efforts no doubt caused AT&T officials to reconsider some aspects of their proposal.

In an editorial last May, we favored market forces and competition and urged the lawmakers to make that happen in the best interest of Tennessee customers. We reiterate that position, and we believe AT&T has addressed some trouble spots that concerned us at that time.

The major change that has the cable industry and local government lobbyists working overtime to fight AT&T is the switch from a city-by-city and county-by-county franchise approval to one statewide grant through the Tennessee Regulatory Authority.

AT&T has said, however, that local governments will continue to receive franchise fees of up to 5 percent, they will continue to control access to public rights-of-way, and they will continue to have locally produced programming.

Local control by itself should not be enough to sway legislators to reject AT&T because local control has not been synonymous with strict oversight and holding down costs for customers. In that sense, a statewide approval process would appear a less cumbersome method of doing business.

Another aspect of criticism centered on a charge that AT&T would cherry-pick the wealthiest neighborhoods for service, leaving low-income and rural areas to fend for themselves. AT&T answered that it would apply nondiscrimination standards with regard to new entrants and that it has no reason or incentive to redline low-income or minority areas.

In AT&T's favor, the company cites the increase in cable fees over the last few years that have been higher than increases in the average income levels of Tennessee families.

The key points are competition and choice. The entire issue needs to be fully debated on its merits in the Legislature when it convenes early next year.

Lawmakers need to get control of the discussion, and they need to work for competition and choice and ensure accountability without sacrificing quality of service. A lot of money is being invested in this issue. Legislators need to make sure the result is worth the expense for residents of this state.