MO: Cable, telephone companies reach deal on video franchise bill

Cable, telephone companies reach deal on video franchise bill

By Jerri Stroud
ST. LOUIS POST-DISPATCH
01/20/2007

The telephone and cable industries in Missouri have reached a compromise that could ease passage of a bill allowing statewide franchises for pay-television service.

Missouri cities and towns still could oppose the bill, unless legislators make changes that would allow governments more control over easements and flexible public access channels.

AT&T Inc. and its predecessor, SBC Communications Inc., have been seeking a statewide franchise law for several years to make it easier to get into the subscription television business, to compete with cable companies.

A coalition of the cable industry, city officials and consumer groups have opposed the bill.

But discussions over the last few months have produced a new bill, SB 284, introduced last week by Sen. John Griesheimer, R-Washington. The bill would allow companies to get a single statewide franchise, rather than negotiating separately with 535 municipalities. Four St. Louis area communities have approved franchises for AT&T.

Under the proposed legislation, companies would pay a 5 percent franchise fee to local franchising authorities. Companies could opt out of current franchise agreements with individual cities in favor of the statewide franchise.

"We think this new bill is the best of its kind in the nation," said Greg Harrison, president of the Missouri Cable Telecommunications Association. "It takes the best of what has been passed in other states and puts them into one bill."

John Sondag, AT&T's vice president of external affairs in Missouri, said he thinks the bill has a good chance of passing this year because of the compromise and ongoing talks with cities and other parties.

But John Coffman of AARP said his organization would like to see more consumer protection features in the bill, requirements for more public access channels and guarantees that a provider would make the service available in low-income areas.

Patrick Bonnot of the Missouri Municipal League said the bill needs significant changes before the organization can endorse it.

The league would like to see a requirement that a video provider extend service to a specified percentage of a community within a certain time period, Bonnot said.

Bonnot said cities also want more say over how the companies use their rights-of-way.

"Some of the equipment [for providing video service] is the size of a refrigerator," Bonnot said. "Those pieces of equipment would block the view of traffic. They don't want the cities to be able to regulate those."

AT&T has faced opposition in other states when it has installed new cabinets needed to provide video service. The cabinets, often installed next to existing cabinets, each will provide video service to about 200 homes.

The bill also requires satellite TV providers to pay a fee to local governments. Satellite companies don't pay franchise fees now.

Robert Mercer, a spokesman for DirecTV, said franchise fees are supposed to compensate cities for the use of easements. Satellite companies don't use easements and thus shouldn't have to pay the fees, he said.