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from: TMC net

Will New Cable Law in Florida Slash Costs?

TMCnet News
May 07, 2007

The Consumer Choice Act of 2007 is expected to make small, perhaps subtle changes in the law, which will allow more competition to enter the market and offer consumers greater choice and access to new technologies, at a lower cost. Indeed, technologies guided by law often become more affordable to consumers, as there is greater competition to offer higher quality products, but to offer them at a lower price. But, the new Consumer Choice Act will bring about a fundamental shift in the issuance of cable franchises in the state.

Opponents of the amendments to the Act feel, “This is going to be a time consuming, costly process that might act as a barrier to competition.”

The head of the National Association of Telecommunications Officers and Advisors feel that the new act might increase competition, but will also increase complaints that might be left unresolved.

Already, cable TV and telecommunication industries consistently make the Top 10 list of consumer complaints in surveys by the National Association of Consumer Agency Administrators and the Consumer Federation of America. In theory, the new Act would help by stipulating that the Department of Agriculture and Consumer Services (DACS) will handle all consumer complaints.

However, a spokesman for Agriculture Commissioner Charles Bronson said cable complaints would fall under unregulated industries. Terry McElroy indicated that means consumer advocates would try to mediate disputes, but the agency would have no authority to take legal action.

Based on the current Act, local governments can allow certificate holders to install, construct, and maintain infrastructure on public rights. Furthermore, under the bill, the service provider cannot deny services to any group based on their income or race.

The amendments, however, raise serious doubts about the customer-side benefits of state-run franchising.

“We’re pretty good at solving unregulated industry complaints,” noted McElroy. “I’m certain well over 50 percent of our cases are resolved satisfactorily.”

Given the emphasis local franchises tend to put on customer service, it is hard to imagine that 50 percent is a viable measuring stick. What’s more, with customer service being managed through a central organization, there is little local operators can do to differentiate themselves from the competition — they certainly cannot all compete on price alone.

Still, cable operators are obligated, under the current Act, to abide by existing franchise agreements through the end of their current contracts or 2012, whichever comes first.

“Concern over the new legislation in Florida is unwarranted,” said Charles Dudley, general counsel for Florida Cable Telecommunications Association.

He added that the bill includes numerous measures to protect consumers and retains the majority of the benefits and free services negotiated in local agreements.

Certainly, the proposed legislation, which has been sent to Governor Charlie Crist, is somewhat more vague on the customer service aspects of cable operations — which provides good enough reason for consumer advocates to raise concerns. That said, without further evidence, it is too early to speculate on the lasting effect of the legislation. Only time can answer whether this act is going to benefit the consumers.

Meenakshi Shankar is a contributing writer for TMCnet.