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from: Denver Post

Statewide franchising of cable OK'd in Iowa

The state becomes the first in Qwest's service area to adopt the measure, aiding the company's video push.
By Andy Vuong Denver Post Staff Writer
Article Last Updated: 05/30/2007 09:43:51 PM MDT

The first state in Qwest's local service territory has approved a statewide cable-franchising measure.

The move will enable the Denver-based company to bypass local municipalities in its effort to offer video services.

Iowa Gov. Chet Culvers signed the state's cable bill into law this week.

Qwest is the last of the three Baby Bells to win the ability to pursue a statewide cable-franchise agreement in at least one of its states. Qwest, AT&T and Verizon are increasingly looking to offer video services to help offset losses of phone customers to cable and Internet phone companies, such as Comcast and Vonage.

About a dozen states have approved statewide franchise measures, which eliminate the need for companies to seek approval from local municipalities individually before they offer alternatives to cable-TV service.

Qwest didn't say when it would seek a statewide franchise agreement in Iowa.

"We're beginning the process of reviewing the opportunity," Qwest's Iowa president, Max Phillips, said Wednesday.

Janco Partners telecom analyst Donna Jaegers said the passage of the measure is a "small positive" for Qwest because just 7 percent of the company's total revenue comes from Iowa residential and business customers.

"But I'm sure Qwest will point to it and try to lobby other state regulators on board," Jaegers said.

This year, Qwest pursued statewide cable measures in six of the 14 states in its service territory. Measures are either in review or will be carried over to 2008 in Idaho, Minnesota, Utah and Washington. The measure was killed in Colorado, and Qwest has since returned to seeking franchise agreements from local municipalities in the state.

Qwest already has local agreements in a handful of communities in Colorado, Arizona and Nebraska. The company is gaining traction in its efforts to win an agreement in Portland, Ore.

Phillips said the passage of the measure may help Qwest in other states.

"I really do think it creates a model for other states to follow," Phillips said.

He said a concern cable companies in Iowa had was that they would be tied to local agreements while their competitors gained statewide contracts. The new law allows cable companies to break away from their local agreements and seek a statewide deal once competition begins in their service area.

Staff writer Andy Vuong can be reached at 303-954-1209 or avuong@denverpost.com.