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from: Nashville Post

AT&T rejects Nashville video franchise for the second time

03-12-2007

Mayor Bill Purcell recently offered to help AT&T Tennessee — the former BellSouth — rapidly obtain a local franchise to offer video services in Davidson County, but AT&T declined the offer on the spot, according to Purcell spokesperson Molly Sudderth.

The rejection was perhaps anticipated, given that AT&T representatives in Tennessee make clear these days they are "not interested" in dealing with cities one by one, as required by current law.

AT&T says it won't settle for anything less than the one-stop statewide video franchising, an option the company is now aggressively pushing the General Assembly to create through new legislation.

In a developing campaign coordinated by the Tennessee Municipal League, many — but not all — of the state's mayors and county officials are simultaneously inviting AT&T to bargain and launching grassroots efforts to repel the legislative efforts of AT&T and its allies.

TML Deputy Director Chad Jenkins explained in an interview Friday that although TML's formal 2007 legislative agenda did not mention video franchising, things have changed — "this is the top priority for cities, right now," Jenkins stressed.

AT&T's dismissal of invitations such as Mayor Purcell's may stem, in part, from the company's earlier video-services experience in Nashville.

The first time an AT&T-branded company walked away from providing franchised cable services in Davidson County was just five years ago. In 2001, Mayor Purcell signed a Metro Council ordinance that, as AT&T had requested, transferred the Metro cable-television franchise AT&T had controlled four years to current incumbent Comcast Communications, which at the time was closely allied with AT&T.

Municipal cable-franchise consultant Barry Orton, who has been involved in Metro cable-franchising issues occasionally over the years, told NashvillePost.com on Thursday that by 2001 AT&T had simply decided "video is not what we do," and opted to pull the plug on its struggling AT&T Broadband unit, which Orton described as "arguably the worst cable operator ever to have a national footprint."

Today, diminished federal regulation, AT&T's acquisition of BellSouth and its business and technology strategies are winning both more favorable reviews from investment analysts and rising pressure for earnings — further emboldening AT&T to attempt to shed as much state and local regulation as possible.

In Nashville, opponents of statewide franchising worry that ending local franchising authority would threaten Metro Government revenues from franchise fees, which this year total about $6 million from sole franchisee Comcast. Additional competing franchisees could mean more fee revenue and more video channels for Metro and its residents.

Opponents also worry that if providers distance their businesses from local authorities, lower-income communities will be neglected or "red-lined," customer service generally will decline, government control of construction access to rights-of-way will be weakened and financial support for local public-access television operations, as well as equipment and studios for producing programming, will quickly evaporate. Metro's public access channels are Comcast channels 3, 9, 10 and 19.

With these factors in mind, on Feb. 6 Metro Council Member Lynn Williams' won passage of a resolution encouraging AT&T Tennessee President Marty Dickens to "enter into negotiations for a local cable franchise" for Nashville. Williams said last week Dickens has not responded to that resolution.