Save Access

from: Daily News journal

Kimbrell: AT&T bill holds key to future
By ED KIMBRELL

For the past few weeks, behind closed doors at the state Capitol, American Telephone and Telegraph, Comcast cable, the Tennessee Municipal League, and selected legislators have been trying to forge a tortured compromise about the Internet's future in the state.

First, a bit of history. When cable came to the state, it was required to offer universal service and to obtain a franchise from each town or city it served.

Realizing that cable is so expensive to run, the town or city gave virtually a monopoly to each provider. For the monopoly, certain give-backs were required: two or more channels for education and city government, perhaps, and the payment of an annual franchise fee to the municipality. Today, cable also offers Internet service.

Now, more powerful than ever, AT&T is able to offer the same service using fiber optics. AT&T wants to avoid negotiation with all of the cities and towns, and wants a universal franchise for the entire state. AT&T argues its service will not only be better, it will be much cheaper. Competition, AT&T argues, brings marketplace pressures that favor the consumer.

The battle between these powerhouses began in the last session of the Legislature and went nowhere. Now, the leaders of the Legislature are trying to find enough common ground to literally get out of the middle of the battleground. It's not promising.

Cable enjoys a very mixed reputation, primarily because it raises its rates so often consumers have a love-hate relationship. There's no doubt that's the primary reason satellite TV, Dish and DirecTV, is growing so rapidly. Satellite service is so good now that it's rare to lose service due to hard rains.

Now, the one lobbying group that's going to be the major loser here is the cities and towns, depending on how the compromise is forged. The Tennessee Municipal League, an old and powerful lobbying group, has been brought to the table just now, and it's hardly willing to lose revenue in the new deal over Internet and TV service providers.

What's at stake here? Simply, the future. There are billions of dollars of potential revenue on the table. AT&T is the largest wireless telephone provider in the nation, and if it bundles TV, Internet and telephone service into one package, it will be very difficult to turn it down by the average consumer.

Cable argues AT&T will not provide universal service, picking only the lucrative cities and towns and leaving the rest unserved.

AT&T already bundles wireless and wired telephone service. So, simply put, it could dominate the information and entertainment environment in the state at a time when the telephone is becoming the dominant information technology in the world.

Only fools predict Oscar winners, Supreme Court decisions, and what our Legislature will decide, but it's obvious this is one of those times when law and compromise are overwhelmed by new technology.

There's no Solomon able to make a decision about the cable-telephone war. Don't be surprised if the outcome this year isn't any different than last year's stalemate, because no one at the table wants to lose.