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Note: Interesting to see that the president of Qwest Iowa thinks public interest concerns such as red-lining and predatory pricing are nothing more than "bogus and irrational fears".

from: Desmoines Register

Allow state franchise to open competition, lower TV rates

By MAX PHILLIPS
SPECIAL TO THE REGISTER

April 12, 2007

With cable rates increasing 7 percent to 9 percent every year, it's more important than ever that we move from today's cable monopolies to open competition among video providers. Competition among TV service providers means more choices, more innovative products and lower prices for customers.

According to a report by the U.S. General Accounting Office, cable rates in communities with wire-line TV competition are almost 41 percent lower than similar markets without wire-based competition. Just a few years ago, Iowa's municipally owned utilities released a study that showed that where two wire-line competitors exist, prices are lower.

The problem is that the process of gaining municipal franchise agreements is flawed. It was designed for a bygone era of monopoly providers, and it stifles competitive entry. Qwest serves more than 300 municipalities in Iowa alone. If competitors are required to get franchise agreements city by city, it will literally take decades to accomplish.

Consumers are already creating their own programming. In recent years, there have been dramatic changes in how consumers obtain and view video content. Customers download video entertainment to their computers, iPods and even their telephones through high-speed Internet connections. They also download videos to their televisions through the use of DVRs and other TIVO-type devices.

This evolution in consumer viewing habits shows no sign of slowing. Indeed, it is accelerating. As this evolution occurs, fewer consumers will have use for video content aggregators, such as traditional cable monopolies that operate under franchise agreements from local municipalities. Instead, they will obtain their desired content directly from the content producers, much as they do for Internet content today.

At present, the efficient, widespread distribution of video in competition with cable monopolies is still tied to the franchise process. A single, statewide process for granting franchises benefits the customer by speeding video competition into the marketplace. Customer demand ultimately will drive content delivery regardless of the mode of transmission.

Twelve other states have already passed comparable legislation, and many others are considering similar law changes. Consumers in Texas, Missouri, Indiana, Michigan, California, Kansas, New Jersey, North Carolina, South Carolina, Virginia and Wisconsin already benefit from competition. Iowa lawmakers have an excellent opportunity to put our state on the cutting edge of a new era in cable television competition, where service and choices move up while prices move down.

Opponents of state-issued franchising will bring up bogus and irrational fears such as redlining (or cherry-picking) and predatory pricing. The Iowa Senate saw through the smoke screen and voted overwhelmingly, 44-6, to bring this kind of competitive opportunity to Iowa. I welcome the debate on those issues. The roadblocks erected by the supporters of the status quo are easily torn down by facts and data.

Consumers want expanded choice and competitive pricing for TV services. According the General Accounting Office, 98 percent of Americans have no wire-line competition. Now is the time to pass statewide franchise legislation. Ask your legislator to open the door to the future and support Senate File 554.

MAX PHILLIPS is president of Qwest Iowa.