Save Access

from: The Capital Times

Cut out: Consumer advocates say they're left out of the cable bill

Judith Davidoff — 6/28/2007 11:58 am

Bob Chernow has been chairman of the Regional Telecommunications Commission for two decades. The commission negotiates cable franchise agreements on behalf of 33 communities in southwestern Wisconsin, representing about half of the state's population and cable subscribers.

As chairman, Chernow thought it would be important to meet with Rep. Phil Montgomery, author of a state bill calling for deregulation of the cable industry.

Chernow said it took 45 days of constant calling just to get an appointment with Montgomery, R-Green Bay. When Chernow and a West Allis official finally met with Montgomery, Chernow said it was clear the state representative was not interested in anything they had to say.

"We went into his office, and he pulls out a gyro sandwich and starts scarfing it down," Chernow recalls. He said Montgomery then got angry at the suggestion that city representatives should be involved in hammering out details in the bill.

"He started screaming at me," Chernow said. "I mean really screaming at me."

Chernow said Montgomery then started to lecture him on how the bill, which is being pushed hard by AT&T, would save consumers money.

"He had his facts all wrong," Chernow said. "If you look at Texas, the rates have not gone down."

"The attitude he had was We're not going to listen to you. We've already made our mind up. We don't care who we step on.' "

Montgomery did not return phone calls for comment.

While Chernow and other critics have found Montgomery unwilling to field feedback on his bill, critics of a similar cable deregulation bill in Illinois say they were brought to the table and helped hammer out revisions that will benefit consumers and cities alike.

Terry Miller, senior assistant attorney in the city of Naperville, called the Illinois legislation, which has passed both houses and is awaiting the governor's signature, the best video competition bill in the country, particularly as it pertains to consumer protections.

"It has the highest customer service standards in the country," he said.

Gerry Lederer, a Washington D.C.-based lawyer who advises local governments around the country on telecommunications issues, said Wisconsin legislators should demand the same kind of consumer standards and protections now in the Illinois bill.

"What AT&T is offering in Wisconsin is below market compared to what they have agreed to elsewhere," said Lederer, whose firm represented Milwaukee in its recent video franchise negotiations with AT&T.

"Wisconsin legislators have the opportunity to look out there and see what AT&T has been willing to agree to in various states around the nation. It seems to me the people of Wisconsin ought to be entitled to the best deal that's out there."

AT&T spokesman Jeff Bentoff counters that the Wisconsin bill was amended significantly in two legislative committees and the full Assembly at the request of public access advocates and cities.

As for any comparison to other video franchise bills, Bentoff said that "the nearly 20 state legislatures that passed such bills each included unique provisions that they feel best fit their states. While different in some aspects, each bill is similar in bringing consumers and workers the benefits of video competition quickly by creating a statewide franchising process."

But Madison Mayor Dave Cieslewicz said the Wisconsin legislation still needs help.

"Wisconsin has one of the worst bills compared to states like Illinois and even some places like Texas. We should be able to do better," Cieslewicz said.

No consultation: Rep. Montgomery has argued that increased competition from other video television providers will provide more viewing options for consumers and bring down rates.

Critics counter that the bill will rob cities of control over their rights of way, and customers will lose consumer protections they've enjoyed for decades. But these concerns have fallen on deaf ears, they say.

Mary Cardona, executive director of the Wisconsin Association of PEG Channels, which represents public, educational and governmental access stations around the state, said Montgomery promised city officials and PEG channel advocates in a meeting that they would be included in discussions on the bill.

But he didn't follow through, she said.

"We were never consulted in the drafting of the bill. Never," Cardona said. "When this industry-written bill surfaced, we again said, Please, let us work with you.' We were rebuffed again."

It was clear the video competition bill was on a fast track when first introduced in late March by Montgomery and Senate co-sponsor Jeff Plale, D-South Milwaukee.

Montgomery, chairman of the Energy and Utilities Committee, held a public hearing a week later and soon thereafter the Republican-controlled Assembly passed the bill easily.

The Senate version of the bill is awaiting action by the Joint Finance Committee.

In contrast, the Illinois bill went through months of detailed negotiations between interested parties after it was introduced.

Illinois bill author Rep. James Brosnahan, D-Oak Lawn, said he always viewed the first draft of his bill as just a starting point.

"I knew it was going to be a pretty controversial bill and it wasn't one of those bills that could just sail through the process," he said in an interview. "I said at one of the first committee hearings that 'this isn't going to be the bill that we're going to vote on at the end of the session.'"

Public access advocates, who feared educational and government programming would no longer be funded if the cable industry were deregulated, lobbied hard to make sure they were at the table.

"We were down in Springfield the day the bill was introduced, and before we read it we were on top of the situation," said Barbara Popovic, executive director of Chicago Access Network Television, which oversees the city's five public access cable stations.

Popovic said she and others were aware of the "piteously poor legislation" that had been passed in other states.

"We were not expecting the best and did not get it," she said.

Illinois Attorney General Lisa Madigan -- who happens to be the daughter of Mike Madigan, speaker of the House -- also got involved in the negotiations, and her presence proved key to beefing up consumer protections in the bill, observers say.

Assistant Attorney General Susan Satter said staff reviewed the initial draft of the bill and found several problems with it.

"Our main concern was that it not be a race to the bottom," Satter said.

"We have a public utilities group so we were familiar with the issues associated with cable franchising," Satter added.

Moreover, in Illinois, consumer protection is overseen almost entirely by the attorney general's office, which meant Madigan's presence in the debate carried a lot of weight. Such protections in Wisconsin are primarily the responsibility of the Department of Agriculture, Trade and Consumer Protection, though the attorney general's office may go to court to enforce complaints that the agriculture department refers to it.

The Illinois attorney general's office, perhaps most significantly, also took over the drafting of the bill, which, like Wisconsin's, had been written largely from AT&T's perspective.

Miller of Naperville, one of Illinois' largest cities, said Madigan's presence in the debate forced a "change of posture" at the State Capitol. Legislators, he said, were still supportive of the bill but were conscious of not wanting "to do harm" to existing protections for cities and consumers.

Miller said "weeks and weeks of negotiations" ensued to see what AT&T was willing to compromise on. As with any negotiations, nobody got everything they wanted, but consumers came out far ahead, Miller said.

"Rarely when you have two large businesses, telecommunications versus cable, does the customer end up being the winner," he said. "But in this case, the customer really turned out to be the winner."

Control retained: Illinois city officials are particularly pleased that under the revised Illinois cable bill, they would retain a great deal of control over their rights of way and over the cable companies that seek franchises to operate within their borders.

An eminent domain provision, for instance, which would have stripped cities from having much say over where AT&T placed its large utility boxes, was deleted from the bill. The bill would now require AT&T and others to go through a local permitting process that would control placement of the boxes. Companies also could be required to place landscaping around the boxes.

Cieslewicz recently went public with his concern that Wisconsin's bill would leave cities with little control over the siting of what he sees as unsightly "graffiti magnets."

Brosnahan said the Illinois bill, as amended, would also prevent a new company from providing service only to wealthy parts of town -- so-called cherry-picking -- and prohibit companies from binding customers to contract terms of longer than a year.

University of Wisconsin telecommunications Professor Barry Orton said Illinois' bill is vastly superior to Wisconsin's in that consumer protection duties there fall to the attorney general's office, which already oversees utilities and therefore has expertise in the area.

Under the Wisconsin bill, the state Department of Trade, Agriculture and Consumer Protection, which has never regulated utilities, would be in charge of such duties.

Provisions for public, educational and governmental access television are also better in the Illinois bill, experts say.

The Illinois bill now requires providers to pay a dedicated fee for PEG stations (1 percent of gross revenues) above their 5 percent franchise fees. It also requires new operators to cover the costs for carrying PEG channels and guarantees that these channels will be carried in the same format and with the same signal quality as commercial channels.

The Wisconsin bill carries no such requirements, said Cardona of the Wisconsin Association of PEG Channels.

The lack of technical standards means that PEG programming might be very grainy and of poor quality, she said.

"We are very worried about that because AT&T is planning to carry our channels as if they were a Web video that you could see on the Internet," Cardone said.

But AT&T's Bentoff said the Wisconsin bill does provide "many benefits" to PEG operators, including requirements that video providers carry public access programming and pay the station's transport costs. Cities, he pointed out, would also receive 5 percent of the gross revenue of consumer video bills, which can be used to support PEG operations.

Cieslewicz said that still does not make up for the bill's shortcomings.

And Wisconsin's tradition of open and clean government has not been extended to critics of the bill, the mayor added.

But, he said, "there is still a chance to do this the Wisconsin way by bringing everyone to the table and developing the best possible legislation."

Judith Davidoff — 6/28/2007 11:58 am