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from: The Daily Times

Alcoa hangs up on AT&T: City officials oppose company's video franchise bill

By Mark Boxley
of The Daily Times Staff

Had it been a movie, the audience would have seen a couple guys standing toe to toe Tuesday. And after a few minutes of sizing each other up, the shorter of the two would have taken off his glove and used it to smack the other square in the face.

But it wasn't a movie as the Alcoa City Commission unanimously passed a pair of resolutions — one officially inviting AT&T to enter into cable television negotiations with the city, and the other citing the city's opposition to the "Competitive Cable Video Services Act," which is currently being considered in the Tennessee legislature.

In Tennessee as it currently stands, if a cable company wants to sells its wares in a community, it has to get a franchise agreement from that municipality. The "Competitive Cable Video Services Act" — which, Alcoa's resolutions contend, was proposed to the Tennessee legislature by AT&T (formerly BellSouth) on Feb. 14 — would bypass the individual municipalities and allow companies to get a franchise agreement from the state to operate anywhere within its borders.

Alcoa City Manager Mark Johnson acknowledged the resolutions were mainly symbolic and he didn't expect AT&T to take them up on the offer to enter into negotiations. The point is, he said, that other cable companies have dealt with individual municipalities in the past, and have done so successfully.

Speaking by phone before the Alcoa City Commission meeting, Kenny Blackburn, vice president of external affairs for AT&T Tennessee, argued though, that streamlining the process will bring added competition to the market and give consumers more choices.

"We're more interested in a statewide franchise process," he said. "We think that's best for consumers.

"Consumers want competition for their cable and their video services, and the best way to give consumers what they want is through a statewide franchise process that's a lot faster than negotiating in each jurisdiction in the state," he said.

As argued in Alcoa's resolutions, the city has taken the stance that giving AT&T that kind of broad access to the market would be unfair to the companies that have gone out and gotten franchise agreements (600 of them across the state). And worse, Johnson said, it would allow AT&T and other companies the ability to "cherry-pick" who they wanted to provide service to.

If a company comes in to Alcoa to provide cable service today, they have to offer the same rates, packages and options to every person in the city. If AT&T's proposed legislation goes through, the fear is they could only set up service in wealthier neighborhoods and leave others without anything, Johnson said.

Blackburn disagrees with that assertion.

"That's not true," he said, again explaining the company's desire for a statewide franchise option, but not explaining why Alcoa's fears are unwarranted. "The issue is consumers want competition and they want a choice in their cable service. And the best way to get consumers what they want across the state is to have a statewide franchise where companies that want to provide competition for cable can get one franchise (agreement) as opposed to going to every municipality in the state."

When asked if AT&T would accept Alcoa's offer to go into negotiations in the interim while the legislation is being considered in the state legislature, Blackburn again stated the company's franchise hopes.

"As I said earlier, we would like to have a statewide video franchise bill," he said.

Blackburn's answer was the same when asked if AT&T would even consider the offer.

"I hate to repeat myself," he said. "But what we would prefer is a statewide video bill that would streamline the process where we don't have to go to each individual municipality in the state."

One of Alcoa's resolutions goes on to point out that if AT&T had applied for a franchise in the city when the legislation was filed with the state (Feb. 14), the company "could have already had their application for a franchise approved."

AT&T contends that being required to go to individual municipalities is a hindrance to an open, competitive market; Alcoa calls that assertion "erroneous and unsubstantiated."

"This legislation, under the guise of increased consumer access and choice, is simply an attempt by a corporate giant to bypass the local cable franchise process and unjustly gain advantages in its competitive fight with other cable and telephone companies that have duly and lawfully adhered to the ... franchise process ..." Alcoa's resolution states.

Johnson summed it up, saying AT&T "wants to play by different rules than other companies have played by for years."

But Blackburn pointed out that 11 other states have enacted similar statewide franchise laws.

"Eleven states can't go wrong," he said. "Tennessee needs to seriously look at a statewide video franchise process."

Last modified: March 13. 2007 12:00AM