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from: Madison.com

Prof: Don't hold breath for new services under state cable law

Jeff Richgels and Judith Davidoff — 12/22/2007 7:32 am

Gov. Jim Doyle's signing of the state cable franchising bill isn't likely to mean AT&T -- a leading backer of the bill -- will bring its U-verse TV service to the Madison area anytime soon, one prominent observer said.

"I don't see it in Madison in any widespread way in 2008," said Barry Orton, a UW-Madison professor of telecommunications who has advised many communities in their dealings with cable companies.

Orton noted that AT&T has been reducing its rollout projections for U-verse in recent announcements.

"Every single estimate cuts back on the previous one," he said.

AT&T wouldn't say if the new law would impact its rollout plans for U-verse, which it currently offers in Wisconsin only in the Milwaukee area.

"We're constantly expanding our existing U-verse footprint into new areas," AT&T spokesman Chris Bauer said in an e-mail. "However, we don't comment on our specific business plans and rollout schedule. We know that when a new competitor enters the market, existing providers make lucrative offers and promises to keep customers from switching. For competitive reasons, we don't want competitors to know the exact areas where we're providing service or when we'll be in the market."

Verizon has previously said that none of its local markets, which include several Madison area communities, are included in its rollout plans through 2010 for its FIOS TV service.

Under the law as passed by the Legislature, Orton expected that the state's cable providers, including Charter and Time Warner, would immediately apply for a state franchise that would supersede their local franchise agreements.

But Doyle used his veto powers to give the Department of Financial Institutions and Department of Agriculture, Trade and Consumer Protection the power to draft rules governing the franchise process. This means it will take some time to get rules drafted and approved by the Legislature, which also means, Orton said, that video applicants may now have to wait several months to obtain a statewide video franchise.

As signed by Doyle, the law allows DFI, among other things, to evaluate providers before granting a franchise and to revoke a license if need be. It can also now set franchise fees that take into account the size of a company. The Legislature had set an annual $2,000 fee for all franchises.

AT&T spokeswoman Caryn Candisky said Friday the company was still examining the details and full implications of the governor's vetoes. "We are hopeful that any changes will not cause delay to AT&T's or other providers' ability to offer new services and choice for Wisconsin consumers," she said.

Orton said AT&T and Verizon will be free to offer TV service anywhere in the state if they get a state cable franchise, although they need to get regulatory approval to compete for phone customers outside their territories, which would affect their ability to offer bundles of phone, Internet and TV services.

At any rate, going outside their own territories probably wouldn't be economically feasible for AT&T and Verizon, Orton added, because the companies either would have to lease networks from their competitors or spend huge amounts of money building their own networks in competitors' areas.

Satellite providers DirecTV and DISH Network still don't need to get a franchise under the new law, but the law does for the first time extend the state's consumer protections for cable customers to satellite customers.

Those rights cover things like rules for notifying customers when their service will be cut off for nonpayment and reimbursement for extended outages.

"They now have the same basic rights as cable customers," Orton said.

More cable choices

In his veto message, Doyle said the cable bill would "provide Wisconsin consumers with more cable service choices" and that his vetoes preserved "protections" for cable customers.

"By opening the door to cable competition in Wisconsin we should see expanded services to consumers and more investments in communications technologies and infrastructure in the state," he said. "And while we are opening the door to competition, people can also be assured that Wisconsin's strong consumer protection laws will continue to cover them when it comes to issues like billing errors and service interruptions."

One area Doyle did not use his veto pen to address was the three-year sunset on funding for public, educational and governmental (PEG) access channels. Sen. Kathleen Vinehout, D-Alma, said she was disappointed by the omission but pledged to introduce legislation soon to continue funding for stations that provide local government coverage and community programming.

Although the Legislature failed to pass similar amendments while the bill was being debated, Vinehout said she is hopeful that separating the issue from the controversial bill would curry more favor this time around.

Without the continued funding, which comes from cable companies, stations like Madison City Channel would have to look to other funding sources, including property taxes.

Brad Clark, who runs Madison City Channel 12, said he, too, was disappointed Doyle didn't ensure the continuation of PEG funding, but he said he has already begun discussing the future of the station with Mayor Dave Cieslewicz and City Council members. The city receives about $400,000 in PEG fees through its franchise agreement with Charter.

Clark said he plans to begin a "community dialogue" next year on the future of Madison City Channel.

"I am comfortable leaving that to the community, particularly the mayor and elected officials, because I think they all value the window to open government that we provide and they don't want to see it closed," he said.

Doyle did remove a provision in the bill that would have prohibited PEG channels from advertising.

Longtime critics of the bill were pleased that Doyle restored some of the oversight powers cities have over their rights-of-way. As vetoed, the law now allows cities to charge video providers for street construction, though it was unclear at press time whether those costs could be subtracted from a company's franchise fee.

Doyle also vetoed the bill to ensure that customers are credited a day's worth of service if they are without service for four or more hours.

Jeff Richgels and Judith Davidoff — 12/22/2007 7:32 am