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from: Belleville News Democrat

Compromise on TV bill could mean more competition
DAVID A. LIEB
Associated Press

JEFFERSON CITY, Mo. - Many television viewers already are making the switch to wider, high-definition screens. Now as a result of a compromise at the Missouri Capitol, they could also see a wider variety of video companies competing for their business.

At loggerheads last year, the state's largest telephone service provider and the cable TV association now have agreed on legislation that could make it easier for the likes of AT&T Inc. to begin offering television service in Missouri.

"For the general public, this is a historic day, when you get two competing interests to agree like they have," said sponsoring Sen. John Griesheimer, R-Washington.

Adding to the harmony, the bill is being co-sponsored by Sen. Gary Nodler, R-Joplin, a former cable television operator who last year was among the bill's leading opponents.

Not all are satisfied, however. The Missouri Municipal League said Wednesday that it fears the TV competition bill actually could leave some residents without any service, or without any simple recourse for their customer-service complaints.

Cable television currently is provided in Missouri through 553 separate franchise agreements with local governments. To compete against cable companies, telephone companies currently must also seek a local franchise agreement.

The new legislation would let both telecommunications and cable companies seek a single state franchise, which would allow them to offer service anywhere in the Missouri without the need of local approval.

"The main thing is it offers a way to more quickly roll out our video service," said Kerry Hibbs, a spokesman for San Antonio-based AT&T, which has pledged to spend more than $100 million to expand its video service in Missouri if the legislation passes.

Missouri Cable Telecommunications Association had opposed language in last year's bill that would have limited the ability of incumbent cable TV providers to also get a statewide franchise.

This year, "the bill provides a level playing field for all video service providers in the state of Missouri," said the association's executive director, Greg Harrison.

Cable companies also had insisted last year that competing telecommunications companies be required to eventually phase in their TV service to the full area served by the local cable company, instead of serving only the most densely populated or potentially profitable parts of a city.

This year's legislation would require AT&T specifically to provide access to its video service to at least 25 percent of its statewide households within three years. It also requires that within three years of beginning video service, at least 25 percent of the households served by any provider must be in low-income areas - or 30 percent in low-income areas within five years.

Nodler said the "build-out" requirements for TV-service competitors provide "the core of achieving equity" among the cable TV and telecommunications companies.

But Gary Markenson, executive director of the Missouri Municipal League, expressed concern that the thresholds are calculated statewide, instead of community-by-community. The result, he said, is that a telecommunications company could meet the standards by offering TV service in St. Louis and Kansas City and thus offer it to only the wealthy neighborhoods throughout the rest of the state.

Because cable TV companies could terminate their local franchise agreements, there's nothing to guarantee they would have to serve new parts of town or to improve equipment everywhere it gets old, Markenson said.

"What they've done is resolve the issue between them by saying both sides can cherry pick" customers, Markenson said.

Markenson also contends that the provision allowing cable companies to break franchises could violate the state constitution, although the bill attempts to address that concern.

"I'm a realist," Markenson said. "When the powerful telecoms and powerful cable folks are united, we're not going to be able to stop them, but I can raise some issues."

Also new to this year's bill is a provision that would subject satellite TV providers to taxes similar to what cable and telecommunications companies pay. But Griesheimer said he intends to remove that provision when the bill is heard by a Senate committee.

Other disagreements also remain. For example, the legislation contains a clause backed by cable companies but opposed by AT&T that would cause the whole bill to fall if one part is invalidated in court.

But Nodler and Griesheimer both said they don't expect any more major hang-ups.

"I think we'll get the bill passed," Nodler said. "The differences that exist in the bill will be resolved by the full body" during debate.

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Cable bill is SB284.

On the Net:

Legislature: http://www.moga.mo.gov