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from: Nashvilles City Paper

AT&T, cable compromise bill debuts
by John Rodgers
Nashville City Paper
04/07/08

Tennesseans rooting for another alternative to cable television are a step closer to victory today as a compromise bill was unveiled that AT&T says it needs to offer television services.

The compromise bill culminates 14 weeks of negotiations among lobbyists and lawyers for AT&T, the cable industry, and local government organizations as well as involved lawmakers.

Those lawmakers, who presented the bill at a mid-afternoon press conference on Capitol Hill, all stressed that it was legislation that would benefit the consumer.

“The bill creates a climate for competition here in Tennessee,” said House Speaker Jimmy Naifeh (D-Covington), who led the compromise effort. “More competition means better services and faster deployment of these services to areas that are currently underserved.”

Naifeh cautioned though that the bill was not a “silver bullet” and Tennesseans shouldn’t expect a lower cable bill the next time.

Under the legislation, AT&T would be able to get a statewide franchise, but would be required to offer its U-Verse television product to about 600,000 Tennessee households by three and a half years from the time the franchise agreement is struck.

That number could be lower if the telecom giant offers broadband Internet to rural Tennessee.

Lawmakers said that each side didn’t get everything they wanted, but Rep. Charles Curtiss (D-Sparta), the sponsor of the measure, said the cable industry lost out the most.

AT&T, who lost a bitter lobbying fight last year to pass the legislation, may have come out the victor.

In 2007, AT&T lobbied extensively to pass a bill allowing for a statewide television franchise. Currently, franchises to offer video services are obtained at the local level.

AT&T’s move, however, brought vigorous opposition from the cable industry, who said its business model was threatened, and organizations representing local governments, who were concerned with losing revenues and control.

In the end last year, AT&T’s effort failed, but not after up to $11 million was spent among the telecom giant, the cable industry and local governments on lobbyists and public relations campaigns.

Determined to not watch the same spectacle this year, Naifeh spearheaded talks between AT&T, the cable industry and local government organizations starting late last year.

The compromise bill rolled out today was the byproduct of those negotiations.

“Consumers have won in all of the time spent in this negotiation,” said Rep. Steve McDaniel (R-Parkers Crossroads). “This is about consumers having choice.”

The details of the bill include:

• Requires AT&T to offer its U-Verse television package to 30 percent of its telephone footprint within 3.5 years, or about 600,000 Tennessee households. 25 percent of those covered must be low-income customers.
• Prohibits discrimination or “cherry-picking” of customers. Violators pay a penalty up to $5,000 for each case.
• Local governments in which AT&T offers TV service would receive 5 percent of the telecom giant’s gross TV revenues. The current average is 3 percent.
• Incents telecoms to expand broadband Internet into rural areas as an economic development and educational tool.

The bill is expected to be debated for the first time Tuesday in front of the House Commerce Committee.