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from: Tom Paine

Cable Without Complaint?

Is there one person in this country who’s happy with their cable TV service provider? Cable television companies have long resembled the old Lily Tomlin skit from Saturday Night Live: “We don't care. We don't have to. We're the Phone Company.”

Now the phone company wants to become your cable TV company, only with even less oversight. This is set up for disaster. If you think cable companies can ignore customers’ complaints now, just watch how big they yawn when they are released from what little government oversight currently exists.

With the extensive telecom bill currently being debated in the Senate, most of the focus has been on the net neutrality provisions. However, in addition to the issues in the bill being overlooked that Art Brodsky points to , Bob Sullivan at MSNBC's Red Tape Chronicles points to another: the loss of local control over how cable and telecom companies do business.

Today, if you have a problem with your cable TV service, you can march down to City Hall and complain to the mayor. Or, you can show up at a city council meeting and make an old-fashioned stump speech. And the mayor and city council can actually do something about your problem.

Most towns in America have an Office of Cable Communications or similarly titled board, giving consumers a local place to turn and companies a local office they must answer to.

While the current franchise agreements set up isn’t perfect, at least customers have the ability to go to their city government with complaints, and the city—while possessing far less power to control local-access than they used to—still has the big-stick option of yanking their franchise agreement with the cable operator.

But with barely any fanfare, consumers are about to lose what little leverage they have over their cable TV provider for something called “federal pre-emption,” which will be when Congress allows the telephone companies to sell their video services without having to bother with any of those pesky rules and regulations the cable companies have to deal with. And this is all being done in the name of “increased competition.”

But even by giving telecom companies free reign to charge what they want to whomever they want (and ignoring any customers they don’t want), it’s highly doubtful that this deregulation is going to spark a bidding war with the current cable providers.

Analysts agreed that additional entrants in the cable TV market would create more competition and could ultimately benefit consumers.

But not all are convinced that AT&T dueling with companies like Comcast and SureWest for TV customers will pull down prices.

"None of these players wants to enter into a price war," said Jimmy Schaeffler, an analyst for the Carmel Group, a central California coast firm that follows the cable TV industry.

When networks are built with public funds or heavy subsidies such as the phone lines were, why should the federal government be willing to just give up so much control for the mere “promise” of increased competition? Why should Congress just bend over and set up a nice gameboard where only two players get to decide the rules (being current cable providers and telecom companies)? By removing any local control of cable TV the only government agency that consumers will be able to bring complaints to will be the FCC—which only seems to move fast on complaints when they involve naked breasts.

Sullivan’s piece is worth reading in its entirety, because he explodes most of the myths the telecom companies are spreading why this new Communications Opportunity, Promotion and Enhancement Act (COPE) Act is going to be a good thing for everyone. (By they way, the more optimistic the legislation’s title, usually the more horrible it is for everyone but business interests.)

Before I go on, let me say that the system, as it is, is broken. Those who want to change the way cable franchises work have a point. Not long go I covered city council meetings in far flung places like Parsippany, N.J., and Lake Havasu City, Ariz. All across our nation, dysfunctional city halls and Napoleonic mayors hold up cable franchise deals in all sorts of creative ways. They take a sizable cut of the subscription fees (5 percent or so) as free tax money. Some cities hold up cable companies for outright grants to pay for things like fire trucks. The negotiations can drag on for months. It isn’t fair. With their sometimes absurd demands, localities hold back competitive forces and limit consumer choice.

But dismantling the franchise model is a classic throw-the-baby-out-with-the-bath-water solution—and it’s sharply undermining an important consumer protection mechanism under a smoke screen. Remember, companies who want to provide video and Internet services over a wire to your house have to enter your city. They have to climb your telephone poles. Sometimes, there’s nothing wrong with quaint. We should be working hard to preserve the quaint, local element of cable television, not working to nationalize it.

There are so many bad ideas in the Senate bill, S. 2686, which is due for mark up in the Commerce Committee on June 22nd; we should really just hope that the bill dies altogether. Otherwise consumers are going to wake up to a brand new future of telecommunication and wonder when the hell did they sign on to this bum deal?

--Rachel Joy Larris | Wednesday, June 21, 2006 4:04 PM