from: Milwaukee Journal Sentinel [1]

State Agencies Would Handle TV Complaints Under Video Bill

April 24, 2007
By Steven Walters

If you’ve been griping to city or village officials about cable TV service problems, get ready to take your complaints instead to someone in state government in Madison.

A bill the Legislature is expected to pass would redirect consumers’ complaints about cable TV and digital satellite service to the state Department of Agriculture, Trade and Consumer Protection.

And in a development that could further confuse consumers, a second state agency — the state Department of Financial Institutions — would license video service providers. It couldn’t revoke their licenses for consumer-protection violations, however.

Currently, cable TV providers are issued franchises by local governments, which intervene when there are service problems and other disputes with customers.

That would change under the franchising bill being pushed by communications giant AT&T, which has introduced its new Internet-based U-Verse television service in some Milwaukee-area neighborhoods.

The measure, known as the Video Competition Act, could be debated by both houses as early as today.

A final Senate vote might be delayed while state officials calculate the costs of adding state workers to take consumer complaints about cable TV and satellite digital service, said Senate Majority Leader Judy Robson (D-Beloit).

Cost estimates “seem to be ever-changing,” Robson said.

Sponsors of the bill say it would give consumers choices for video services as technology advances, which could lower rates and give telecommunications companies incentives to reach areas of Wisconsin that can be served only by satellite dish.

Opponents say there is no guarantee that cable bills will go down and the package will cost local governments money, since their income from cable companies would be limited to 5% of video providers’ local receipts.

How quickly state consumer-protection workers can track down providers and get service problems fixed is one of many unanswered questions. The deregulation package would replace the 30-year-old system of local cable franchises.

Expertise lost

“We anticipate the new system will be less responsive to complaints,” said Curt Witynski, assistant director of the League of Wisconsin Municipalities, which represents 582 local governments.

“In part, this is because municipal staff has had 15 or 20 years of experience and knew whom to contact within the offices of the local cable provider to get things taken care of for consumers,” Witynski added. “After the bill is enacted, that institutional knowledge will be swept away.”

Ed Huck, executive director of the Wisconsin Alliance of Cities, representing Wisconsin’s largest cities, also said he looks for slower responses to consumer complaints.

“I don’t believe the state will have much leverage for consumer complaints, especially since the franchise is forever,” Huck said. He was referring to a clause in the bill that says franchises must be issued to qualified video providers, and they would hold those licenses forever.

If the bill becomes law, complaints about cable companies are likely to leap into the “Top 10” list of consumer problems and require the hiring of at least five workers to review the complaints, Agriculture, Trade and Consumer Protection officials predicted last month.

Since then, legislators broadened the measure’s scope to extend consumer protections to satellite digital systems — a change that threatens to swamp state consumer-protection specialists, said Barry Orton, a University of Wisconsin-Madison telecommunications professor and consultant to local governments.

The Department of Financial Institutions also will have to hire workers to review applications for state-issued franchises, officials say.

“Under similar legislation in Texas, 90 applications were received in the first year and a half,” Department of Financial Institutions officials noted in their first cost estimate for the bill.

Some licensing costs would be covered by a $2,000 application fee paid to the Department of Financial Institutions. No other source of revenue has been identified for additional consumer-protection costs, however.

Orton said the additional regulatory cost of the expanded bill “has got to be more than $1 million a year,” now that it covers complaints about satellite companies.

Official estimates of those costs were not available.

Also Monday, officials who run local public, education and government channels say the latest version of the bill would quickly shut down those channels in West Allis and other communities where cable TV agreements have expired.

Time Warner can immediately cut off its $150,000 annual subsidy of the West Allis Community Media Center now that the cable company’s last contract with the city has expired, said Media Center Executive Director Mary Shanahan-Spanic.

The version of the bill pending in the Senate would require cable companies to keep paying for public-access channels for up to three years, or until local franchise agreements expire.

Calls to the co-sponsors of the bill, Rep. Phil Montgomery (R-Ashwaubenon) and Sen. Jeff Plale (D-South Milwaukee), were not returned.

Gov. Jim Doyle has not indicated whether he would sign the bill, although he has praised lawmakers for restoring consumer protections that he earlier had said were lacking.