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from: The City Paper

AT&T, cable crafting compromise
By John Rodgers, jrodgers@nashvillecitypaper.com

Lengthy negotiations between AT&T, the cable industry and local governments over AT&T’s bid to offer television services in Tennessee are close to complete, and the final product may cause a first for the telecom giant in the southeast.

To make an agreement happen, AT&T has given in on where it’s required to offer its services under a statewide franchise.

Going into the talks, one of the biggest points of contention was where a statewide franchise holder would have to offer video services.

Local franchise holders are often bound to “build out” to cover a certain area of a city or county, and therefore can’t “cherry pick” wealthy residents.

The cable industry has argued that a pure statewide franchise would allow AT&T to only cater to high-income customers.

In the tentative agreement, Tennessee would be the only southeastern state to require AT&T and other statewide television franchise holders to offer its services to a certain percentage of a geographical area within a certain time frame.

Some low-income customers would also have to be covered.

“That’s what the build out is going to look like,” said Rep. Randy Rinks (D-Savannah).

Since late last year, lobbyists and lawyers from the cable industry and AT&T have gathered in House Speaker Jimmy Naifeh’s conference room on Capitol Hill to try to hammer out a deal over statewide video franchising rights.

Currently, television franchises are obtained at the local level, such as Comcast in Davidson County.

AT&T, in its effort to get into the television services business and compete with cable, wants to pass legislation allowing for a statewide — instead of local — franchise. That would allow the telecom giant to offer services anywhere in the state and not have to strike local agreements.

During last year’s legislative session, AT&T spent millions lobbying for the bill, but the cable industry and its local government allies fended it off. The cable industry, defending its business model designed on local franchises, also spent millions lobbying against AT&T’s effort.

Naifeh (D-Covington), determined to not watch the same spectacle again, started gathering AT&T and cable, and then local governments, together to try to work out a deal.

Those talks are winding down, and the compromise bill could be produced as soon as this week or within the next two, said Rinks, one of the half dozen or so lawmakers involved in the negotiations.

“There’s been a lot of progress that I think has been made,” Rinks said.

Lt. Gov. Ron Ramsey (R-Blountville) also said a compromise bill would likely be released this week and he’s “very optimistic” statewide franchising legislation would be passed this year.

Another part of discussions, prevalent on the minds of rural lawmakers and Gov. Phil Bredesen, is using AT&T’s bid for a statewide franchise as a vehicle to expand broadband Internet access to rural areas.

Greater broadband Internet access would greatly aid economic development in rural Tennessee, officials say.

And parties involved are planning on offering an incentive for AT&T and other telecom companies to “extend broadband to where it’s not now,” Ramsey said.

“You get certain credits,” Ramsey said of the discussed legislation. “That’s one change the House made that I think is a great change to the bill.”

While not commenting specifically on the talks, Bob Corney, an AT&T spokesman, said the telecom is “pleased that things are moving in the right direction.”

“What we want is an opportunity to put our product before Tennesseans and compete,” Corney said.