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from: Kansas City Business Journal

Franchise bill's appeal fades for cable providers in Missouri

February 22, 2007
by Jason Shaad

A Missouri bill lauded for increasing competition in the state's cable market has lost a bit of its luster for cable companies.

On Tuesday, the Senate approved a bill to streamline the process for letting new service providers enter the television market in Missouri. The bill would allow both telephone and cable companies to secure statewide franchise agreements rather than negotiate individual franchise agreements with local governments, which is the current requirement for offering service.

Even though the bill means increased competition for local cable companies such as Time Warner Cable and Everest Connections Corp., the cable industry endorsed the bill when Sen. John Griesheimer, R-Washington, introduced it in the Senate in January.

Unlike a similar bill that died last year in the General Assembly, the current bill allows incumbent cable companies to seek statewide video franchise agreements just like any new service providers -- primarily telecommunications companies such as AT&T Inc.

The bill that the Senate passed Tuesday, however, doesn't include three key provisions that the cable industry has said are necessary to create a level playing field among satellite, cable and telecom providers.

"We're not opposed to the bill now, but we're a little disappointed," said Damon Porter, a spokesman for Time Warner Cable.

The Senate eliminated language that would have charged satellite TV providers the same franchise fees as cable providers and language that would have ensured that Voice-over-Interntet-Protocol -- Internet-based phone service -- continues to be regulated by the Federal Communications Commission and not the state.

The Senate also eliminated a provision providing that if one part of the bill was found unconstitutional, the entire bill would be found unconstitutional.

That provision was important because cable companies would need to opt out of their current franchise agreements with local governments to take advantage of a statewide franchise agreement, said Greg Harrison, president of the Missouri Cable Telecommunications Association. If a court finds it unconstitutional for cable companies to do that, then telephone companies become the bill's only beneficiaries, creating an unlevel playing field, he said.

"If those options were challenged and we would lose, then we would have nothing," Harrison said. "It's disappointing, certainly."