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From: Gazette

Local govts. oppose Telecom Reform Act

By LAUREN DARSON
Legislative Gazette Staff Writer
Mon, May 21, 2007

In rural parts of New York state, broadband Internet access is only a figment of the imagination and in some regions, cable is a luxury not yet available.

Assemblyman Richard Brodsky, D-Elmsford, and Sen. Vincent Leibell, R,C-Patterson, introduced last Tuesday the Telecommunications Reform Act of 2007 (S.5124/A.3980B) to increase competition among cable providers, raise the level of telephone service and to bring wider access to broadband Internet.

“This legislation preserves local governments’ control of their streets, consumer complaint processes and their public access channels, while protecting against corporate discrimination by including net neutrality,” said Brodsky. “This bill sets universal and affordable service as the goal of the state policy to ensure that all New Yorkers benefit from the best technology and service quality at the best possible rates.”

Many Upstate towns do not have broadband Internet cables underground and use outmoded methods of Internet access, such as dial-up, to connect to the World Wide Web, according to Brodsky. If this bill were passed, more cable companies would be able to set up shop in rural areas, increasing the choices of residents who now have just one or two cable or Internet providers to pick from. Even in many areas of New York City residents are given one option for Internet or cable services, allowing these providers to increase rates at a faster pace than the national inflation rate.

“New Yorkers suspect that the way cable works is that there are wires underground that enter your home, come through your TV and go directly into your wallet,” said Russ Haven of the New York Public Interest Research Group. “New York needs to push the industry to protect those consumers getting cable and promote service for those areas that have been bypassed in the current marketplace.”

However, cable providers said competition already exists, and there is no bar for competition in New York; the cable companies have to apply for a franchise in an area in order to build, which is open to any company.

Local governments collect a franchise fee from the cable providers.

According to the Cable Television Association, there is much opposition to the bill because it would disenfranchise local governments from having a say as to what companies can and cannot build in their cities, villages and towns.

William Cunningham, a spokesman for the Cable Television Association, said the bill would allow telephone providers like Verizon to build in local areas without following the same rules and regulations put in place by local governments that cable providers have to abide by in order to apply for a franchise in the area. The bill would allow the Public Service Commission in Albany to grant franchise agreements making the process quicker, but less regulated, according to Cunningham.

“The phone company can apply for a franchise right now, but they don’t want to compete at the same level. They want special consideration and legislation, and they don’t want to go in and answer the questions of local government,” said Cunningham.

Verizon spokesman John Bonomo said that since the company is installing a new form of cable networking, they are going from town to town in order to seek approval for the installation of fiber optic cables that carry a faster Internet service, stream high definition television and are larger than traditional copper wires. Bonomo said that Verizon welcomes competition, but the bill “increases burdens of build-out requirements.” Bonomo said most rural areas have access to Digital Subscriber Line or DSL internet connection. He also said that cable companies have enjoyed a monopoly in New York without having to be subjected to build-out requirements.

“We would support the idea of a statewide franchising bill that would have the right and reasonable build-out requirements,” said Bonomo.

The New York Conference of Mayors said it too supports the idea of increasing competition in certain areas of New York, but removing franchising power from local governments and placing it in the hands of the state is not the best route.

“The current law ensures that a franchise is suited to each community. A one-size-fits-all approach is not the solution. Going through a state agency will not work. Every community is different; that’s why it’s important to retain the current system,” said Peter Baynes, executive director of NYCOM.

Baynes also said the bill’s attempt to expand broadband access to rural areas of New York is not a governmental issue, but an economic one. There are economic disincentives for these broadband companies to branch out to certain areas of the state, unrelated to competition.

NYPIRG and several other organizations have aligned to create a coalition in support for the Brodsky/Leibell bill. Citizen Action, Consumers Union, New York Association of Community Organizations for Reform Now, Jobs with Justice, New York State Rural Advocates Common Cause, Rural Opportunities Inc. and Communications Workers of America voiced their support for Brodsky’s endeavor last week at a press conference.

According to the U.S. General Accounting Office, about 70 million American households receive cable service from one company, and only 2 percent are able to choose between two or more cable Internet providers. In the past 10 years cable rates rose 64 percent in non-competitive markets and by 15 percent in competitive ones, according to Joel Kelsey of the Consumers Union.

Kelsey described the cable companies’ jurisdictions as a “monopoly stranglehold” over the consumer market. “Ballooned profits will not be put before the need of the consumers,” Kelsey said.