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from: Badger Herald

State wants control of cable

by Keegan Kyle
Monday, March 12, 2007

In an effort to increase cable television competition across Wisconsin, legislators introduced a bill Thursday that would give state officials the authority to grant statewide video franchises.

The power currently rests on the shoulders of local municipalities that, under the bill, would lose the authority to require cable companies to pay certain franchise fees and provide citywide access.

The proposed bill, authored by state Rep. Phil Montgomery, R-Green Bay, would also repeal certain rights of cable television subscribers, who may currently qualify for compensation during particular service interruptions.

Brad Clark, city of Madison cable television coordinator, said revoking the municipality’s authority to grant cable franchises would greatly reduce local influence and customer service.

“That local presence would be taken away,” Clark said. “There is no reason why the current franchising system should be replaced.”

Under federal law, cable companies are generally prohibited from providing service without a franchise contract, which is usually a shared revenue agreement. Current Wisconsin law grants municipalities the authority to negotiate franchises and to impose additional fees.

Madison, like most municipalities, requires cable providers to pay 5 percent of revenues from the area, as well as regular fees for using the public rights of way.

In 2006, Clark said the city of Madison generated $1.9 million from its franchise agreement with Charter Communications, the nation’s third-largest cable provider.

Under the proposed bill, video providers — which include cable companies and other video providers such as AT&T’s new U-verse — would be required to seek a single statewide franchise agreement with the state Department of Financial Institutions. The bill excludes wireless and Internet-provided video.

Jeff Bentoff, an AT&T Wisconsin spokesperson, said the current system to acquire franchises is “unnecessarily complicated” since it requires companies to negotiate unique contracts with more than 1,850 cities, towns and villages across the state.

“Consumers receive major benefits by having a single franchise process,” Bentoff said. “It’s done quickly, and that’s important to consumers.”

Tom Moore, executive director of the Wisconsin Cable Communications Association, said the bill would create a level playing field for video service providers, but he added his organization will remain “cautiously neutral” with the proposed bill.

“We’re going to work pretty hard to make sure the bill that was drafted is fair to all providers,” Moore said. “That’s what’s best to us and best to consumers.”

Members of AT&T and the WCCA have been working with Montgomery for more than a year to create a bill similar to legislation passed by 11 other states, which places the franchise granting authority on the state level.

Montgomery, chairperson of the Assembly’s Committee on Energy and Utilities to which the bill would be referred, said a statewide system of granting franchises will lead to reduced cable prices due to increased competition.

“Anytime you have competition, one of the first things you’ll see if a reduction of the cost,” Montgomery said. “The second benefit is to the state economy.”

Montgomery also said reduced prices would encourage more consumers to enter the telecommunications market, which would better for video companies and the state budget.