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from: Knox News

Compromise puts cable bill back on track
Wednesday, April 9, 2008

One of the biggest lobbying efforts in the Tennessee Legislature in recent years involved legislation to give communications giant AT&T the ability to have a cable franchise in the state. One lawmaker, in fact, dubbed the proposed Competitive Cable and Video Services Act as the Lobbyist Employment Act.

Apparently it became clear to House Speaker Jimmy Naifeh earlier this year that the lobbying could go on indefinitely. Thus, the Covington Democrat brought the parties together to hammer out a compromise. It appears Naifeh achieved his purpose. At a press conference on Monday to announce the agreement, Naifeh said not every entity got what it wanted, but he said, "It creates a climate for competition in Tennessee that will level the playing field."

Representatives from AT&T and the cable industry basically agreed. AT&T Tennessee President Gregg Morton said there are items in the bill "that we do not think are necessary," but he said his organization backs the compromise. Stacey Briggs, executive director of the Tennessee Cable Telecommunications Association, said the industry stood firm to ensure that members were treated fairly.

The bill is before various House committees this week. The measure was scuttled last year amid disagreements among AT&T, the cable industry and representatives of local governments.

The compromise proposal gives AT&T what it had sought initially: a streamlined franchise process that avoids seeking approval for hundreds of municipal permits to offer cable TV service.

The cable industry and local governments argued that AT&T should have to negotiate local franchise agreements the way cable companies have had to for years, one city at a time, but that practice seems out of date in a high-tech world.

At least 17 other states have enacted similar laws, and that number includes six of the eight states that border Tennessee.

Meanwhile, the legislation requires AT&T and any other new entrants in the cable market to pay a 5 percent franchise fee on gross receipts to the city or county where they operate. The statewide average is 3 percent.

Earlier, AT&T had agreed to pay a franchise fee, agreed that local governments will continue to control public rights-of-way and it agreed to continue to have locally produced programming.

In an effort to resolve another area of serious contention, the proposed compromise will contain a so-called "build-out" requirement that prevents companies from cherry-picking customers by choosing wealthy areas over low-income neighborhoods.

Companies will have 3.5 years to make their service available to at least 30 percent of the households in their franchise area, with 25 percent of that number in the low-income category. Fines by the Tennessee Regulatory Authority of up to $2 million could result if the company fails to reach 30 percent within the specified time.

The key issues involved in the debate over the bill have always been competition and choice, along with accountability that does not stifle quality. That remains the case with the new bill.

With Naifeh's blessing of the compromise, the bill is likely to win approval in the House. If it is everything proponents and the interested parties say it is, the competition will be good for the state's cable TV customers.