The AT&T lobbyist sponsored bill HB1421/ SB1933 in the Tennessee General Assembly eliminates local control of cable franchises, regulates local franchise fees, restricts or eliminates customer service and quality standards, provides state regulation of local public right of way for the benefit of cable companies, restricts or eliminates local build-out requirements, and allows cable companies to create statewide franchises.

The House version has been deferred three times, and is currently on the House Commerce Committee calendar for April 10th. The Senate version has been deferred once, and is currently on the Senate Commerce, Labor & Agriculture committee calendar for April 10th.

Click "read more" for a comprehensive update...

This bill is bad for consumers and does not promote build-out of rural broadband. State Sen. Tommy Kilby (D-Wartburg) says in a recent Knoxville News Sentinel Perspectives column: "Thus, what AT&T is asking is that Tennessee give up the nondiscrimination rules critical to ensuring the future broadband enfranchisement of most residents in exchange for illusionary price cuts for cable services that even AT&T has acknowledged are little more than rhetorical in nature."

Further, state lawmakers aren't sure exactly what they are voting for. Regarding local revenues, the fiscal impact statement for the bill says: "Additional changes to local government revenues of unknown amounts. Any such changes could result from changes in property tax revenues and franchise fees. However, these changes are dependent upon multiple unknown factors and cannot be measured or reasonably quantified." One thing they do know, however, is that the fiscal impact statement projects a decrease of $12 million in state revenues.

When we contacted State Sen. Raymond Finney (R-Maryville) regarding our opposition to the bill, Sen. Finney responded by saying that he planned to vote against it.

This week, Knox County Commissioner Mark Harmon, Vice Chair of the Knox County Cable Committee, sponsored a resolution urging state lawmakers to oppose the statewide franchise bill. The resolution was approved unanimously by the committee, and says in part: "These two bills are the latest in a historical pattern of stripping away the legitimate exercise of county authority over easements and impeding the enforcement of franchise agreements regarding cable and video service providers." County Commission is expected to vote on the resolution at their next meeting.

In January of this year, Knoxville City Council Member Rob Frost sponsored a similar resolution that cites concerns about built-out requirements, quality and service standards, and the economic impact on local governments, urging state lawmakers to "carefully and closely scrutinize any proposed legislation which will adversely impact the authority of local governments to enter into franchise agreements with providers of cable television services and to refrain from adopting any such legislation which would have the effect of diminishing the local government's ability to afford service and coverage protections to its citizens or which would result in a significant loss of revenue to local government entities."

Earlier this month, the City of Alcoa passed a similar resolution, inviting AT&T to submit a proposal but opposing the statewide franchise bill. The City of Alcoa resolution says in part: "This legislation, under the guise of increased consumer access and choice, is simply an attempt by a corporate giant to bypass the local cable franchise process and unjustly gain advantages in its competitive fight with other cable and telephone companies that have duly and lawfully adhered to the franchise process." Alcoa City Manager Mark Johnson noted that the bill would "allow AT&T and other companies the ability to 'cherry-pick' who they wanted to provide service to."

Johnson City Commissioners were scheduled to vote yesterday on a similar resolution. According to the Tri-Cities News, Commissioner Jane Myron said the legislation would allow AT&T "to pick and choose where it provides service, likely in the more affluent neighborhoods."

Resolutions opposing the bill have been passed by other local governments in Tennessee, including Murfreesboro, Clevelend, Shelbyville, Erwin, and Franklin TN.

In their April 2007 edition of Tennessee Town and City, the Tennessee Municipal League has a series of articles voicing opposition to the bill. TML President Tommy Bragg has an extensive analysis of the bill and the inconsistencies regarding claims by its supporters, and concludes with this message to local governments: "I request that you follow the lead of the Congress, the prior actions of the Tennessee General Assembly, federal, state and local laws, and the FCC. Defeating this legislation will preserve local control of cable franchising, maintain build-out requirements, and allow you to protect consumers and local interests."

Another article notes that recent FCC regulations negate the need for the bill and address all cable company concerns regarding competition and local franchises. A third article notes that the proposed bill threatens Public, Education, and Government (PEG) cable access channels, saying: "The combined effect will be detrimental to community-access television and basically excuse statewide cable franchise holders from carrying virtually all PEG channels in the state."

In their January-February 2007 edition of County News, the Tennessee County Services Association says that the bill would circumvent local government authority: "As AT&T/BellSouth attempt to ease into the cable business, the company is working to change the existing competitive process. The proposals would set up a single entity that would grant franchising rights, which include local highway rights-of-way usage provisions. The proposal prohibits build out provisions. It also causes problems with consumer protection, public information channels, emergency notification access opportunities, and services to schools and libraries. It also limits our abilities in verifying the accuracy of payments, and our ability to perform meaningful applicant due diligence. [..] Local government organizations, including the Tennessee County Services Association and the Tennessee Municipal League, are opposing the measure because it takes decision-making out of the hands of local officials."

Bloggers around the state are also weighing in with their opposition:

C.E. Petro: Setting prices is competition?

Facing South: Rural broadband v. state-wide franchising lobbyists

KnoxViews: Legislative Roundup: Broadband Access

KnoxViews: City of Alcoa to AT&T: Not on our watch

KnoxViews: Legislative Alert: Broadband access and statewide franchises

Joe Powell: Shut down the plan to end local control of cable franchises

Joe Powell: Cable franchise bill debate continues

Volunteer Voters: A license to cherry pick

Michael Silence: A warning on proposed legislation in TN

With bi-partisan opposition among state and local lawmakers, the Tennessee Municipal League, the Tennessee County Services Association, rural broadband supporters, informed citizens, taxpayers, and consumers, and even cable companies, who thinks this bill is a good idea?

Metro Pulse columnist Frank Cagle notes that it is good for AT&T and even better for their lobbyists, calling it the "full-employment-for-lobbyists" bill. It's difficult to determine how much AT&T is spending to advance the Tennessee bill, but overall they spent $27.1 million last year on lobbying, making them the biggest corporate lobbying spender for 2006. The company spent $23 million on lobbying and advertising to promote a similar bill in California last year. What is known is that AT&T and the former BellSouth have at least sixteen registered lobbyists in Tennessee working on their behalf.

A full vote in the Tennessee General assembly may very well become a "litmus test" of who is on the side of consumers and local governments v. who is on the side of big corporations and their lobbyists. We urge you to contact your state representative and senator to let them know your views on this legislation.

Ed. note: Permission is granted to freely distribute, reprint or republish this article in full with credit to R. Neal, KnoxViews.com

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CBT's picture

While this may not be a good

While this may not be a good bill, the cable company lobby is fighting tooth and nail to keep their competition and cable prices as is. Giving AT&T a leg up and maybe letting them 'cherry-pick' areas of service, thus potentially robbing the existing cable company of valuable fee-payers, is the key here, even if thousands of cable customers would have better, cheaper cable service. Saying it's for the rural areas or any such is akin to the "it's for the children" line we to often hear. Plus, local governments want to keep control.

I wish we had cable choices in Knox Co. Knology was supposed to be one for the city folks and eventually the county. But, they're behind, what, a couple of years in extablishing service areas. I have one choice where I live, if you don't consider satellite. I went that route for a while and like cable better. Competition would likely drive prices down. As it is, they charge as much as the market will pay.

rmyers0516's picture

Cable Competition - Good for the consumer or not

After reading the threads, it looks like responses are generally from lobbyist.

(1) A known fact of business - increased competition drives down prices (generally by reducing profits) - do not believe otherwise.

(2) If KUB or any other utility were allowed to control prices the way Charter does - we would have a "Knoxville Tea Party"

Last month my cable bill was $130 - yesterday, I recieved my new bill and it was $175 with NO changes in service. Yes, I was able to get a lower rate, but I have to commit to 12 months and it required me to initiate the action. Then I found out that the price available is pretty much up to the customer service agent I talked to. I have no idea whether I got a good deal or not.

Would you put up with that with KUB? That would not require a second thought. Of course NOT!!

The only reason the cable companies are able to do it is because of 2 issues:
a) They are given room to do business as they see fit by the local government because of their agreement.
b) There is no competition - NONE

I WILL NOT BE SIMPATHETIC TO THE POLITITIANS UNTIL I SEE THEIR INDIVIDUAL CABLE BILL. If I were a betting man - I would bet the polititians are getting the lowest available rate or less - are you?

I am no fan of AT&T - but I am less of a fan of Charter Cable.

There needs to be some real objective reporting on the quality of customer service with Charter, along with other cable companies. If it were truly objective, I think we would be questioning the current rates and their attitude toward rates - not whether there needs to be competition or not.

Be assured - increased competition will change their attitude toward customer service 180 degrees.

All that being said does not mean the AT&T deal is the right thing. I do believe more competition is the right thing regardless.

R. Neal's picture

AT&T is free to make a deal,

AT&T is free to make a deal, right now, today, with any local government in the state. Many (including Alcoa and Knox County among others) have invited them. They haven't showed up, at least according to the papers. So it doesn't sound like they want to compete all that bad.

Andy Axel's picture

If KUB or any other utility

If KUB or any other utility were allowed to control prices the way Charter does - we would have a "Knoxville Tea Party"

1) Telcos have long been considered utilities. They are subject to the state regulatory authority as the power company. It's called the TRA.

2) BellSouth is AT&T now, and as such, is bound to that regulatory authority.

There needs to be some real objective reporting on the quality of customer service with Charter, along with other cable companies. If it were truly objective, I think we would be questioning the current rates and their attitude toward rates - not whether there needs to be competition or not.

Use the Google. JD Power evaluates customer sat ratings for cablecos, telcos, and satcos every year.

____________________________

Georgia's in Florida, dumbass!

joe lance's picture

I'm working on a Pulse column about this

And add Soddy-Daisy, TN to your list, as its Commission passed a resolution similar to the ones noted above.

(link...)

Stay tuned for the 4/11 edition of the Chattanooga Pulse.

Mr. Neal, your efforts are invaluable here. Thanks so much!

R. Neal's picture

But, they're behind, what, a

But, they're behind, what, a couple of years in extablishing service areas.

Well, there you go. A company with a local franchise with build-out requirements won't even serve the area they are supposed to. So if there are statewide franchises with no build-out requirements, what do you think they'd do?

But I feel your pain. We've been waiting three years for DSL in a relatively new development.

There is still some debate as to whether it would actually have any effect on prices. Right now, AT&T only has 7,000 subscribers to the service they are pushing. That's nationally.

Several local governments in TN have invited them to submit a proposal. I believe the Mayor of Nashville promised to fast track it and get it approved and up and running on a very short timeframe with a minimum of bureaucratic hassles and red tape. Why didn't they take him up on it?

They don't seem all that anxious to get in there and start competing. So what do they really want?

S Carpenter's picture

An$wer Man

Folks grumble for not liking their choices and want another option. Is that really more important than trying to force the market out into areas without any options? And as for consumer savings, how much would they have to be to offset leaving others without? I doubt the bill goes down that much.

Somebody's got to lay the infrastructure and the current system is better than the one being pushed by ... who? AT&T $hareholder$.

Thanks for the informative post, Mr. Neal.

bill young's picture

Cable cost

Back in '98,I was helpin Mackay run for the same commission seat Mark Harmon now holds.Some fellow told us that THE issue was keeping cable tv rates down.We didn't push it & lost.Mark did & won.We need local control & folks like Mark & Randy fighting to keep rates down.

Andy Axel's picture

Giving AT&T a leg up and

Giving AT&T a leg up and maybe letting them 'cherry-pick' areas of service, thus potentially robbing the existing cable company of valuable fee-payers, is the key here, even if thousands of cable customers would have better, cheaper cable service.

How does requiring them to go through the same franchise process that Comcast or Cox has to go through depriving them of this ability? I'm curious. AT&T has only said that it would take them time to get to market. So? Do you think that cable franchise is the only thing stopping AT&T from offering this service?

For what it's worth, Uverse is a DSL based technology. To get the requisite download speeds for IP video on demand (28MB), you need either fiber optics to the curb, or houses right on top of DSL access muxes.

How many homes in BellSouth's 9-state region are even qualified for 3MB DSL right now? Not damned many, it's not simply regulation holding up deployment of super-high-speed broadband service.

Cherry-picking is right. Any franchisee, Comcast e.g., is required to offer cable service in alll areas where the franchise is granted. AT&T wants no such restriction to apply to them. Level playing field, my ass.

(In the interest of full disclosure: I'm employed by AT&T, formerly BellSouth. Longtime participants already know this, but still. There it is.)

____________________________

People getting rich. Some people saying "Markets!" More death. Neil Young. Death.

CBT's picture

My point was that we hear

My point was that we hear this 'it's unfair to the rural folks'. That's not why cable is against this bill. It is for the same reason(s) you mentioned, giving AT&T a leg up by not having to abide by the same rules and potentially allow them to go into more profitable areas thus taking high-dollar customers away from existing cable. That is, it's about money, not making sure rural folks have cable. Seems like a fair argument.

Wayne's picture

cable companies

Cable companies got special legislation passed a few years back to allow them to get a statewide franchise for voice service. why the change in there tune now. If local Government can be held harmless, will cable still be opposed? If it's good for voice it's good video.

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