Save Access

from: The Beacon

Cities, towns safeguard video consumer rights

From The Beacon, April 2007, Vol. XXXIII, #4

Municipal leaders are working mightily to balance local budgets, protect essential local services, restore local aid, pass the governor’s Municipal Partnership Act, reduce the property tax burden, and build a broader public understanding of the dramatic need to reinvest in cities and towns. This is valuable and necessary work, as our state’s economic future hangs in the balance.

Perhaps the folks at Verizon Communications believe that local officials are so distracted by these all-consuming issues that the time is right for their company to launch an attack on the ability of cities and towns to negotiate and grant local video franchise licenses.

For decades, cities and towns have rightly been at the forefront of consumer protection, empowered as the licensing authority for video services. Cities and towns grant these licenses, setting the terms and conditions for the use of public rights of way, ensuring that the private companies that provide video services compensate the public for the use of municipal rights of way over streets and sidewalks, provide adequate public, educational and governmental (PEG) access to programming, and build out their networks in a non-discriminatory manner. These local franchise agreements ensure that video service providers in Massachusetts, which include Comcast and RCN – and now Verizon – are accountable and responsive to the citizens and communities in which they operate, especially concerning important build-out, PEG programming and infrastructure matters.

For unknown reasons, the national telephone companies waited far too long before realizing that telecommunications convergence would lead them into the video services market (formerly referred to as “cable”). Telephone, Internet and digital video products are intertwining themselves in a modern marketplace that now has Verizon, AT&T, and their companion companies leading in phone services, competing in the Internet, and laying fiber-optic lines to offer video products.

But the telephone companies do not want to negotiate local franchise agreements, as the incumbent video providers have done. In fact, even though Verizon has already completed and signed 43 franchise agreements here in Massachusetts, the company is leading a national effort to have the Federal Communications Commission preempt municipal authority, and the narrow anti-consumer majority on the FCC has issued a complex ruling that starts down that path, although the agency’s recent ruling left our state’s 12-month negotiation timeline in place. But that’s not enough – the telephone companies are mounting direct attacks at the state level, pouring massive lobbying resources in over a dozen states to have legislatures and state bureaucracies eliminate municipal franchising powers, from Texas to Florida to Indiana.

And the beat goes on in Massachusetts. Having failed so far in their efforts to have the state Cable Division override local authority to negotiate franchise agreements, Verizon has filed legislation (H. 3385), slated for a Beacon Hill hearing on May 15 (see related story, page 6), that would effectively eliminate local licensing authority, replacing the local role with a 15-day process that would force the state to rubber stamp their applications.

The company claims that it will continue to pay franchise fees to municipalities, and will maintain PEG access. Yet Verizon does not want to sign on the dotted line with municipal officials. Already late to the marketplace, the phone corporations claim that their major interest is providing consumers with competition and service options.

The record shows that local officials invite competition, and see it as beneficial. So why do the telephone companies want to eliminate or marginalize local franchising power? The answer is likely found in the telephone companies’ business plans for their build-out. Cities and towns want to ensure that there is no discrimination locally, and want to guarantee that all their residents will benefit from competition. That means universal access, and no “cherry picking” that would leave lower-income residents and neighborhoods behind. Industry analysts say that the telephone company model is to target higher-income communities, neighborhoods and clusters in order to get adequate payback from the cost of their fiber-optic build-out.

The bottom line is that telephone companies all across the nation are lobbying at every level to push municipalities aside. If this happens, franchise fees and PEG access will be targets before long. Yet, in the meantime, lower-income and harder-to-reach consumers and neighborhoods will be most harmed.

Local officials are the guardians of the community interest, and the most reliable consumer advocates. That is why cities and towns will guard against this flank attack, and will rightly defend municipal franchising powers.

This may be one more fight, one more challenge, but it will be an important one for every community, every neighborhood, every household, and every consumer in Massachusetts.

By MMA Executive Director Geoff Beckwith