from: The City Paper [1]

As AT&T legislation wraps up, city may be first to see U-verse
By John Rodgers, Friday, May 2, 2008 3:21 am

Nashvillians and residents of neighboring counties will likely have the first crack at AT&T’s television programming later this year now that legislation is close to becoming law, a lawmaker close to the telecom said.

Sen. Bill Ketron (R-Murfreesboro), the Senate sponsor of AT&T’s legislation to start offering television programming, said Davidson County and the “doughnut counties” around Nashville would be the first areas where AT&T will offer its U-verse television services.

“Some people in the state will be able to start using U-verse by Dec. 1,” Ketron said.

In addition, Ketron said AT&T was prepared to invest more than $350 million in Tennessee.

So far, for competitive reasons, AT&T officials have not said where they would be offering U-verse if pending legislation became law.

Ketron’s pronouncement didn’t change that.

“We have not made any formal announcement at this point at all,” said AT&T spokesman Bob Corney on Thursday.

AT&T’s legislation took another significant step closer to becoming law Thursday.

Calling it a “historic day,” the state Senate approved compromise legislation that creates a state-issued franchise process, a change in how the state regulates television programming and something AT&T says it needed to get into the TV services business and compete with cable.

The House passed the bill earlier this week. It is now headed for Gov. Phil Bredesen’s signature.

“This bill will change the way the citizens of our state communicate,” Ketron said, who called the bill’s passage a “historic day in Tennessee.”

Currently, cable companies like Comcast reach franchise agreements with local governments. Before dropping opposition to the compromise bill, the cable industry lobbied hard against AT&T’s effort, saying the telecommunications giant shouldn’t have special rules created just to benefit them and should compete through existing rules.

Proponents of the legislation say it will offer Tennesseans choice in their television services and provide competition, which will ultimately benefit Volunteer State residents but may not lower cable prices.

Once the bill becomes law, AT&T will be required to apply for a state-issued franchise and offer its U-verse television service to roughly 600,000 Tennessee households within three-and-a-half years of reaching a franchise agreement.

Of those roughly 600,000 households, 25 percent must be low-income.

Requiring low-income Tennesseans to be offered AT&T television was part of the compromise.

Opponents of AT&T’s move had argued the telecommunications giant wanted to create a state-issued franchise to “cherry-pick” wealthy customers and bypass poorer ones.

To the public, the “cherry-picking” argument was mainly made through television ads aired by the Tennessee Cable Telecommunications Association.

Sen. Thelma Harper (D-Nashville) said she found it “insulting” that the cherry-picking argument had a racial tone to it.

“I found it a little bit insulting that some of the companies promoted the race issue because they used black folks to do it, to say, ‘well, we’re not coming to your house or we’re not coming to your community,’” Harper said. “I really think… we should focus on what the issue is. The issue is assuring that the communities across the state of Tennessee will have access to everything that everybody else has.”

The compromise legislation provides incentives for AT&T and other state-issued franchise holders to offer broadband Internet to rural areas of Tennessee. Access to high-speed Internet is seen as an economic development tool for rural areas.

The state’s cable industry, with its two main members in Comcast and Charter, still plan to make “substantial and meaningful investments in Tennessee,” according to a statement.

“The cable industry, including Comcast and Charter, stood firm to make sure that our members were treated fairly and that AT&T and other companies were not granted advantages in the law,” said Stacey Briggs, the executive director of the Tennessee Cable Telecommunications Association.

Bredesen has previously said he hoped the AT&T, cable legislation passes and becomes law.