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from: Boston.com

Bill would shift review of cable TV franchises to state level

By Mark Jewell, AP Business Writer | June 5, 2007

BOSTON --Local cable television markets across much of Massachusetts could be opened up to new competition under a proposal before state lawmakers.

But the purported competitive benefits of a bill backed by Verizon Communications Inc. could come at a cost to Massachusetts' 351 cities and towns, which would give up the right to negotiate and approve local cable franchise agreements under a streamlined approval process.

Rather than seeking agreements from each community they enter, providers would be able to secure permission from state regulators to more quickly build networks and move into new areas. Massachusetts' Department of Telecommunications and Energy would decide what community and educational programming obligations and other service conditions a provider would have to meet to enter a new geographic market.

Verizon, a relative newcomer to video services, says the changes would speed up reviews that can take a year or more before city councils and boards of selectmen. The New York-based company wants a new system in which the state would have 15 days to approve applications for franchise agreements.

Opponents said at a legislative hearing Tuesday that such laws tear down a system established to ensure protection of public interests when the cable industry was just starting three decades ago.
Verizon official says company's television rollout isn't slowed by local rules (Boston Globe)

"It would fix something that's not broken," said Geoffrey Beckwith, executive director of the Massachusetts Municipal Association.

Supporters say the current system limits competition and keeps cable rates high.

"This bill will bring competition to consumers faster while continuing to provide communities with significant local benefits and control," said Donna Cupelo, Verizon's president for Massachusetts and Rhode Island.

Verizon, whose legislative campaign is opposed by established cable TV providers such as Comcast and RCN, says 13 other states have passed similar laws allowing states to grant cable franchises.

Verizon's push comes as the company invests billions of dollars for its so-called "FiOS" project to rewire more than half of its copper telephone network so it can sell cable TV and superfast Internet connections. Meanwhile, phone and cable companies are competing to become the sole link between households and high-definition television, high-speed Internet and high-quality phone service.

On Tuesday, a joint House-Senate panel held its first hearing on Masschusetts legislation introduced in January.

During the session, Steven Panagiotakos, D-Lowell, a co-sponsor of the Cable Choice and Competition Act, recommended the Joint Committee on Utilities, Telecommunications and Energy create a task force to study the idea more closely.

No action was taken at the hearing, which drew hundreds of critics wearing stickers that read "Keep cable local!" and a roughly equal number of supporters sporting buttons reading "Vote yes for competition -- cable TV choice."

The bill won backing from several business leaders and a union official. Opponents included city and town officials, community activists and advocates for consumers and public access television.

The Massachusetts Municipal Association presented a letter sent to Verizon by nearly 50 cities and towns inviting the company into their communities to negotiate license agreements.

Beckwith argues the legislation would let Verizon expand primarily in wealthy suburban areas of eastern Massachusetts where profits are easier to come by than in rural western Massachusetts communities distant from telecommunications infrastructure.

"Verizon's proposal would eliminate all of the powers that cities and towns use to protect consumers, safeguard the public interest, and ensure that the benefits of fair competition come to Massachusetts," Beckwith said.

Somerville Mayor Joseph Curtatone was one of several municipal officials who spoke against the bill.

"The very fact that this legislation has been written by a single corporation, and is designed to benefit a single corporation, should be enough to make the Legislature and the public extremely skeptical about the value of the bill and the motives of its corporate sponsor," Curtatone said.

Verizon officials said they're committed to serving low-income and rural areas, and believe the legislation contains language to ensure such commitments are kept.

The company and its supporters said the current franchise approval system reduces the number of competitors willing to enter markets, creating little incentive for existing players to lower cable rates, improve services and invest in new technology they say is sorely needed in rural areas.

"It's a virtual monopoly in most Massachusetts communities," said Juan Cofield, a regional president with the National Association for the Advancement of Colored People

Others said the legislation would encourage more telecommunications infrastructure investment and make the state more attractive to employers.

"With more companies offering video services, there are more jobs," said Susanne Morreale Leeber, head of the Marlborough Regional Chamber of Commerce.