from: Green Bay Press gazette [1]
Posted August 5, 2007
Guest column: Consumers, not AT&T, should get favored status
By Bruce Speight and Joel Kelsey
The dual goals of increased competition in the cable market and the expansion of broadband Internet service in Wisconsin are laudable. In today's connected world access to robust networks means much more than just the opportunity to watch cable television — it means increased access to news, art, entertainment, and diverse marketplaces. Unfortunately, the so-called "cable competition" bill that is currently before the state Legislature is missing its opportunity to develop the video service marketplace in a way that truly benefits Wisconsinites.
The TV4US Coalition and AT&T's blizzard of television advertisements forget to mention that the bill currently before the Legislature will allow AT&T to wiggle out of the strong consumer protections that are traditionally included in the video franchising process.
Consumers have suffered under monopolistic cable pricing that has resulted in a 64 percent increase in rates — approximately 2½ times the rate of inflation — since Congress deregulated the cable industry in the 1996 Telecommunications Act. In addition to skyrocketing rates, consumers have virtually no choice of providers or channel offerings. In the few areas where actual facilities-based competition exists, consumers enjoy cable prices that are 15 percent lower than non-competitive markets.
Clearly, increased competition in this marketplace is desperately needed, and a statewide franchise system could foster this new video competition to discipline ever-rising cable rates, but it must include strong consumer protections and appropriate provisions to meet local needs. The bill currently being considered by Wisconsin legislators misses the mark on both counts.
Despite claiming that this bill will benefit Wisconsin consumers with competition and lower prices, in truth, AT&T is pushing for sweetheart exceptions from consumer protection rules that have long governed the practices of cable TV providers.
Right now, local municipal governments can require a cable company to comply with fundamental consumer protection provisions before it begins offering service. Most importantly, most of these franchise agreements require the cable provider to offer service to all residents in the service area, rather than just cherry-pick the most profitable neighborhoods while denying service to the rest of us. These "build-out" requirements ensure that all consumers in a cable company's footprint have access to service. Without genuine build-out requirements, many consumers will be unable to access AT&T's new video services.
In order for there to be true cable competition, all consumers need access to multiple cable providers.
However, AT&T's bill only requires that they provide service to 50 percent of their service territory within five years, creating a host of problems.
In neighborhoods that AT&T chooses to build around, consumers will continue to have no alternatives and remain at the mercy of their monopoly cable provider. In essence, lower income consumers will subsidize the lower cable prices in more affluent areas served by the telephone companies.
The end result will be that the most lucrative, suburban markets in Wisconsin will have video competition, new technologies and lower prices. But less prosperous urban and rural areas will be left out of the new networks and may well experience higher cable prices. Absent a stronger build-out requirement, these underserved areas will be permanently stranded on the wrong side of the digital divide.
State lawmakers should ensure all Wisconsinites, not just a few, benefit from new technologies and consumer choice. The state Senate should draft and support legislation that truly achieves these goals, and gives consumers favored status, not AT&T.
Bruce Speight is a public interest advocate with the Wisconsin Public Interest Research Group, a statewide non-profit public interest advocacy organization. Joel Kelsey is the grassroots coordinator for Consumers Union, the nonprofit publisher of Consumer Reports.