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from: Las Vegas Business Press

Proposed laws could boost competition in pay-TV
BY IAN MYLCHREEST

A legislative deal that would open up the cable TV business to phone companies was unveiled in the Legislature last week and it came with the backing of major players on both sides. AB 526 would establish a statewide video-franchise process that would end the practice of municipalities granting long-term franchises to a single cable TV provider.

The new law, if enacted, would streamline the regulatory process by creating one statewide set of rules administered by the Secretary of State. The bill requires franchise fees to be provided directly to local municipalities and allows them to continue to manage their rights-of-way.

The bill was endorsed by the four major players who helped negotiate it -- Cox Communications and Embarq, which are the main cable and land-line telephone providers in Southern Nevada, and Charter Communications and AT&T, which offer those services in Northern Nevada.

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"It's a pro-consumer bill," said Cox Vice President of Public & Government Affairs Steve Schorr. "It will create greater competition in the video marketplace, and it will make things bigger and better."

He cites studies showing that competition lowers cable rates by 15 percent. The price competition in broadband services is even more dramatic. "When we started, you couldn't get 256 (kilobytes) for less than $29.95. Now it's 1.5 (megabytes)."

Embarq General Manager Kristin McMillan agrees that the proposed law would benefit consumers. The new law will also treat all cable and phone companies fairly and equally, she adds.

Despite all the talk of the benefits of competition, McMillan says Embarq has no plans to add cable video to its current products in Southern Nevada. She notes that the phone company already bundles the DISH Satellite network with its phone products.

BEYOND SOUTHERN NEVADA

AT&T, on the other hand, sees a bright future with its Washoe County operation. The company has already added interactive video in markets in Texas, says the company's Nevada president, Hal Lenox.

In early February, interested legislators told the Business Press they expected the bill to be ready later that month. There was no explanation for the delay but sources familiar with the negotiations say it will likely pass with bipartisan support.

A number of states are working on similar legislation or have recently adopted laws in response to federal law requiring that cable TV franchises be opened to competitors like phone companies.

California recently enacted such legislation and Verizon Communications started offering pay-TV service last week in Long Beach, Huntington Beach and 10 other Southern California cities.

PROVIDER OF LAST RESORT

At the same time that the cable deal was struck, a separate bill was introduced that will give Embarq and other land-line phone companies a little less regulation from the Public Utilities Commission. Currently, they must file any rate changes with the regulator and, says McMillan, that leaves a very uneven playing field -- especially because her company's core business is being eroded by alternative technologies such as wireless and VoIP.

AB 518 will, says McMillan, maintain a regulated wholesale market for carriers using part of the Embarq network and still maintain much of the requirement that Embarq offer basic services as the "Provider of Last Resort." Embarq would no longer have to get the PUC to sign off on every new package or rate.

Cox Communications' Schorr says he does not expect much new infrastructure to be laid in Las Vegas.

Unfazed by the arrival of competition, Schorr insists that Cox Communications would still triumph in the new, competitive environment if AB526 becomes law. "Cox is number one in service. We will offer the best customer service, and we have employees who live and work in the community," he said.