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from: Madison.com

SAT., NOV 17, 2007 - 11:05 PM
Cable bill may not be boon to consumers
By MARK PITSCH
608-252-6145
mpitsch@madison.com

Supporters of a statewide cable competition bill, including telecommunications giant AT&T, have been saying for more than a year that the measure will offer Wisconsin consumers more television choices and lower prices.

But when competition will actually arrive in the Madison area -- or your neighborhood -- is anyone 's guess.

AT&T and other companies aren 't saying if or when they would start competing for TV customers in the Madison area with cable giant Charter Communications, if the bill is signed by Gov. Jim Doyle next month as expected.

"I wouldn 't be holding my breath to see another wired competitor in Madison in less than two years, " said Barry Orton, a UW-Madison telecommunications professor and an opponent of the bill.

AT&T now offers its U-verse television services in parts of Racine and Milwaukee. But if the company decides to offer service in Madison or elsewhere, it won 't make a big announcement, AT&T spokesman Jeff Bentoff said. Rather, it will contact consumers individually through direct mail and door-to-door visits.

"When it 's available, we 'll let them know, " Bentoff said.

That approach suggests a desire to select the neighborhoods in which to offer service, Orton said, unlike typical cable agreements with local governments that require broad-based service.

"That 's what this bill is fundamentally about -- the ability to cherry-pick neighborhoods, " Orton said.

Drew Peterson, director of legislation for TDS, the Madison-based telecommunications provider, declined to say when it might offer video service to the communities it serves in southern Wisconsin, including Middleton, Waunakee and New Glarus. But he said the company is providing video service in Tennessee test markets and hopes to expand it.

Up to the companies

The frenzy of advertisements and political lobbying may have led some frustrated consumers to believe change would come faster. Lobbyists devoted 3,000 hours to the bill during the first six months of the year, second only to the state budget, and AT&T alone hired 15 lobbyists to push the bill, according to the state Ethics Board.

"I think competition is good for the economy, " said Laura Glass, a Madison teacher who hopes some company will offer video service here within a year or two.

She canceled Charter cable, citing rising prices, dissatisfaction with customer service and disappointment with the channel packages that were offered. "When you 're king of the hill, you can pretty much do whatever you want, " Glass said.

Charter officials declined to comment.

Thad Nation, executive director of TV4US, a group that pushed for the cable bill, said he would expect up to about four dozen companies to apply for statewide franchises in the first three months after the bill goes into effect.

But he said whether and when any of them actually offer video service will be up to the companies.

"I can imagine Madison will be a very attractive environment, " Nation said. "But these are private companies, and they have to make individual business decisions. "

Bill 's effects unclear

The cable competition bill, AB 207, would scrap existing agreements between local governments and cable companies that govern television service. They would be replaced by a state franchise allowing providers to offer service anywhere in the state for a cost of $2,000 annually.

Proponents have said it would allow AT&T and other companies to more quickly compete with cable companies, sparking lower prices. Opponents have said the bill would virtually eliminate regulation of television providers, do nothing to spur competition in most parts of the state and reduce consumer protections and customer service requirements.

Doyle, who has said he generally favors the bill, could sign it as early as next month if the Assembly accepts minor changes made by the Senate.

Already, 15 other states have passed similar bills, according to various sources. But there is little data on whether they have spurred more competition and lowered prices as supporters have claimed.

"It 's too early to see any results yet, " said Lilia Perez, a research associate at the National Regulatory Research Institute at Ohio State University, which studies the telecommunications industry.

Two surveys from Texas, conducted by groups on opposing sides of the question, reached perhaps predictably opposing findings.

One, a survey of basic cable rates in 25 Texas cities, found prices have remained the same or increased since that state 's video franchise law went into effect in 2005.

"When you look at the nonintroductory rates, rates have not decreased in Texas, " said Margaret Somereve, assistant to the director of public works in Farmers Branch, Texas, and president of the Texas Association of Telecommunications Officers and Advisors, which conducted the survey.

But a random survey of 883 cable subscribers in three Texas communities in March 2006 found about 19 percent said they paid lower prices after a competitor enter the market, according to the American Consumer Institute, a Reston, Va., group that promotes market-based solutions to consumer problems.

Somereve said the Texas bill has spurred some competition in cable from telephone companies Verizon and AT&T but only in certain areas.

Easier to compete?

AT&T reports signing up more than 100,000 video customers across the country. But it also has revised estimates about the number of homes eligible to choose the service. In May, it expected U-verse to be available to 19 million homes by the end of 2008; now it says the service will be available to 17 million homes by then.

AT&T currently offers telephone, wireless and Internet services in Madison, and customers can also get satellite television through the company, said Bentoff, the company spokesman.

He said the bill would make it easier for AT&T to compete with Charter in Madison, and across the state with other cable companies that offer phone and Internet services along with dozens of television channels. AT&T would have to increase its fiber-optic infrastructure capacity before it could offer U-verse in Madison, he said.

Elsewhere in the state, one company said the bill would allow it to quickly expand television service into an area it hadn 't been able to earlier because of the change in who issues the franchise.

Rick Vergin, chief executive officer of Chibardun Telephone Cooperative in Cameron in northwestern Wisconsin, said his company would offer cable television services in Rice Lake and perhaps three other communities within 30 days of getting a statewide franchise.

The company offers television services in eight small communities, he said, but has not been able to reach an agreement with Rice Lake officials on the fee the company should pay to offer the service. Mick Givens, Rice Lake 's cable director, could not be reached for comment.

"I know there 's been a lot of wrangling over the bill, " Vergin said. "In our situation, it 's really going to help customers here. "