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from: Beacon Journal

AT&T cable bill gets revise in Ohio
Hudson, Wadsworth to keep local channels

Posted on Mon, May. 07, 2007
By Dennis J. Willard
Beacon Journal Columbus Bureau

COLUMBUS - A bill designed to let AT&T get into the cable television business through the Internet is being rewritten after opponents that operate local public access stations and enter into franchise contracts with providers mounted a campaign to stop it.

State Sen. Jeff Jacobson, R-Vandalia, said he will unveil a substitute version of Senate Bill 117 this week when the Senate Energy and Public Utilities Committee is scheduled to hold another hearing on the legislation.

AT&T, armed with a phalanx of lobbyists, began pushing the legislation to strip local communities of the power to negotiate cable franchise contracts that establish fee schedules and often mandate access to channels for locally produced programming designed to inform and highlight individual communities.

Instead, that authority would be transferred to the state.

The idea sparked considerable outrage from communities across the state, including a number of places in Northeast Ohio like Hudson and Wadsworth that use franchise fees from cable contracts to staff and operate local public access cable stations and channels.

Jacobson said the major issues and concerns brought by community representatives have been addressed, and he believes that the legislation will now garner broader support.

The new bill will grandfather all public access channels, known as PEGs, and ensure at least one will be carried on the bottom tier of the channels going out to basic cable subscribers in a community.

The second channel can be on nonbasic cable reaching at least half of the subscribers, Jacobson said.

Public access stations were concerned they would be relegated to obscure channels.

His rewrite will also address money issues by giving the local community a choice on how to define gross receipts. A number of communities were worried that the bill as introduced defined gross revenues in a narrow manner, and therefore gave them a percentage of a smaller pot.

Jacobson said the legislation will also resolve right-of-way questions by giving the local community the same control they currently have over cable television subscribers.

``We think we've done a good job working through the issues they raised,'' Jacobson said. ``We've dealt with every single one of the major issues.''

``It comes down to fundamentally are you for more competition through a statewide solution or not, and we would respectfully say that those who remain unsatisfied just disagree basically with the bill,'' Jacobson said.

Regulations outdated

Caryn Candisky, AT&T spokeswoman, said company officials are waiting to review the changes.

``We've been consistent in our position where the local governments are concerned,'' Candisky said, noting AT&T supports keeping cities whole financially, maintaining local control over rights-of-way and preserving the local public access channels.

Candisky said regulations are outdated given the current marketplace and new rules are needed to increase competition in the industry and provide viewers with more choices.

AT&T is getting into the cable television market through an alternative technology known as Internet Provider Television or IPTV. Although the company does not operate IPTV in Ohio, it is in 18 markets nationally, including communities in Indiana and Michigan.

The Ohio Department of Commerce would shoulder much of the new state oversight authority. The department referred media inquiries to Gov. Ted Strickland's office.

Keith Dailey, a Strickland spokesman, said the governor is monitoring the issue and has not taken a stance on the bill yet.

``The governor is working to understand the full ramifications. He does want to ensure consumers are protected and any changes to the law will benefit customers,'' Dailey said.

State Sen. Kevin Coughlin, R-Cuyahoga Falls, said the Senate is interested in ensuring there is competition in the cable marketplace while recognizing local control and the role public access channels play in a community.

Coughlin is on the Senate committee hearing the bill.

``We need to make the playing field level so no one has an inherent monopoly,'' Coughlin said.

Grandfathering stations

He said he told Jacobson he supported grandfathering existing public access stations, their channels and contracts with cable providers.

Coughlin said he has also heard from constituents about the boxes AT&T wants to install to run copper wiring to deliver the programming.

``How do we make sure they are not too unsightly and obtrusive?'' Coughlin said.

Coughlin appeared recently on Hudson's public access channel, and he said the experience helped him understand the vital role these stations play in providing their communities information on government, schools and sports.

Hudson relies on fees

Kerry W. Paluscsak is the station manager for Hudson Cable TV that operates three channels in the community of 20,000 with 6,000 cable households.

Paluscsak said his budget comes from the franchise fees that Time Warner currently pays, and the language in Senate Bill 117 would have reduced those funds.

He said the legislation as introduced was unrealistic in demanding that each station produce nine hours of original programming each day or lose the access to the channels.

``There are stations in Cleveland with 100 to 200 employees who do not produce that kind of local programming,'' Paluscsak said.

Jacobson said the requirement for local programming was stripped from the bill, in large part due to the testimony from Hudson.

Hudson played a key role in shaping the substitute language in the bill, he said.

``The Hudson people will not notice one iota of difference. Their channel remains entirely the same,'' Jacobson said.

``Nothing changes about it, period, end. It's grandfathered forever.''

Dennis J. Willard can be reached at 614-224-1613 or dwillard@thebeaconjournal.com.
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