from: Multichannel News [1]
Q/A with Nick Miller, Miller & Van Eaton
Nick Miller is an expert in the law and policy governing cable television and telephone regulation, and in the legislative aspects of communications law. He represents local governments, airports, and national local government associations in cable television and telecommunications matters. He has worked extensively with international multilateral agencies engaged in telecommunications policy advice to developing countries. Miller talked to Focus on Customer Care about franchising. An edited transcript follows:
Q: Why do cities want to control local cable franchises?
A: Fundamentally, local government cares about who and how public right of way is used. In addition, cable systems are massive local construction projects that provide the best means of the local communications within the community.
The buzz around cable is about national media and the far reach of the Internet. The reality of cable is that it delivers local programming on local subjects to local viewers. And it provides the most efficient, cost-effective means for local area broadband communications among local communities of interest.
Q: Are there advantages for the cities in having state or federal agencies oversee franchises?
A: Damn little that I can see. One size does not fit all in defining community needs and interests in the use and applications of broadband video communications. For example, neither the state capitol nor Washington, D.C., can possibly define which neighborhoods should be built, in which order, by a new entrant.
Q: How will customers be affected?
A: Have you called your state PUC [public utilities commission] or the FCC to complain about long distance slamming or cramming or billing mistakes on your telephone bill recently? Try it and see if you are satisfied. That is the world ahead for cable subscribers if consumer protection is taken out of the hands of local officials.
Q: With competition now reaching most communities -- at least via satellite -- are local customer service standards necessary?
A: What competition are you talking about? I think the current statistics show less than 5% of the television homes of the nation are passed by a wireline overbuilder. And the FCC itself stated on Dec. 20 in the cable rate investigation that satellite and wireless broadband have not restrained cable prices.
Even in the 5% with wireline passings, my Economics 101 professor stated that two vendors in a market were a duopoly, and would not bring full competition to the market.
Q: Why isn't the FCC concerned about telcos redlining the communities they choose to enter? The telephone companies and FCC say it won't be an issue. Is that true?
A: I give the FCC credit that the agency does not want racial or economic divides in the society regarding broadband service availability. The problem is not the goal. It is the agency’s mistaken policies which are actually counterproductive to the goals.
If the vendors are not required to do otherwise, they must go for the highest possible return on their investment. That is their obligation to their stockholders. Only legal requirements to serve less lucrative customers can allow the market participants to adopt meaningful, socially responsible build-out plans.
Q: Most multichannel providers have announced rate hikes in recent weeks. Has competition really curbed rate increases?
A: I have to say it again: What competition? The FCC’s own cable price report shows that 100% coverage by satellite signals has not restrained cable prices. And no one believes, under current FCC policies, a majority of U.S. homes will be passed by telco overbuilds within the next decade. The current FCC policies are not speeding deployment and they are removing what few protections consumers now have.