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from: St. Petersberg Times

Consumers lose with pay-TV bill

By A TIMES EDITORIAL
Published March 21, 2007

The Florida House would have you believe the barrier to competition in the cable television business is the concessions that companies must make to local governments in exchange for using the public right of way for their wires. The real barrier for companies is the expense of building that network and the time it takes to sign up enough subscribers to recover the cost. That's why the bill pushed again this year by state Rep. Trey Traviesa remains fundamentally flawed.

The Tampa Republican revived a bill from last year that would deregulate pay-TV. Rather than hammer out franchise agreements with every local government whose jurisdiction it serves, cable and video providers under HB 529 would merely cut a check in Tallahassee to obtain a state permit. The move would erase virtually all consumer protections. These companies could cherry-pick which areas to serve, limit educational and public access programming and make it harder for customers to resolve complaints about their bills and service.

Traviesa argues two points. The first is that technology makes the current system outdated. With pay-TV available through cable, phone and satellite providers, having companies deal with individual cities and counties amounts to a maze that keeps competitors from entering the market, artificially inflating rates. His second argument is that government has "no place" telling private companies where to put their infrastructure. That's ridiculous, given the tens of billions of dollars taxpayers have invested in pipes, lines and other public infrastructure in the right of way. But that reasoning betrays the bill's intent. This is not about convergence but making it cheaper and easier for the phone companies to enter the video market and pick off the most lucrative neighborhoods.

Traviesa's bill would virtually require the state to approve any application. Florida could not require providers to extend their service to all neighborhoods. The state would take over the job of logging complaints, with much less clout to defend customers' rights. Legislative analysts predicted complaints will rise by 11 percent once the law took effect in July, but Traviesa's bill provides no new money for state workers to man the phones. That might happen later. The process for resolving complaints would get muddier at the same time the state would relax standards for customer service.

The bill has so much weasel language that customer service requirements are either unclear or reduced to the federal minimum, which itself is inadequate. Lawmakers seem to forget competition is already taking place. Federal law forbids exclusive franchises; local governments cannot even unreasonably restrict competition. The Federal Communications Commission adopted rules in December that bar local governments from demanding the world or dragging out negotiations to keep new providers from the market. So where's the regulatory barrier?

The bill appears headed to the House floor as early as today, as sponsors hope to shape debate in the Senate, where a committee might take up a companion bill Thursday. Sponsors even larded up the bill with pork - measures to expand phone service to the poor and some assurance of future rate cuts. Those gimmicks have nothing to do with pay-TV. Supporters can push those changes in separate legislation. The issue here is how to expand competition in an already open market, and what protections these companies should offer consumers as they focus their attention on the lucrative niche for bundled data services. The House bill misidentifies the problem and offers the wrong solution in one fell swoop. Senators saw through this power grab by the phone companies last year, and there is no reason for them to drop their opposition now.

[Last modified March 20, 2007, 21:11:27]