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from: Poughkeepsie Journal

Plan for statewide cable franchise sparks opposition

By Jay Gallagher
Journal Albany bureau
Wednesday, March 21, 2007

ALBANY — A proposal to allow companies offering fiber-optic video compete more effectively against cable television for subscribers ran into opposition Wednesday from both cable-TV officials as well as from Verizon, which is building a fiber-based network in select communities.

At issue is a bill that would make broad changes in telecommunications regulations, sponsored by Richard Brodsky, D-Greenburgh, Westchester County, chairman of the Assembly Corporations, Authorities and Commissions Committee. One of its chief planks is to remove the requirement that companies trying to offer video or cable TV seek a “franchise” from individual localities and instead allow them to apply for a statewide franchise.

Consumer groups like the idea. But cable executives are fighting it.

“We recognize that competition is here,” Howard Simons of the state Cable TV Association said a hearing conducted by Brodsky. But he added, “A one-size-fits-all approach denies the opportunity to tailor a franchise to a local community.”

The cable operators pointed out that they have been getting franchises from local communities for 30 years, and think their competitors should have to go through the same process. Most of the state is served by one of two cable companies, Time Warner and Cablevision Systems Corp.

The telephone company Verizon has been trying to expand its fiber-optic-based video service as a cable alternative for TV and Internet services and has secured franchises in about three dozen New York communities. Verizon representative Monica Azare said the company likes the idea of awarding a statewide franchise. However, another requirement in Brodsky’s bill — that the company make its service quickly available to outlying areas — makes it “not economically feasible.”

Brodsky said the advantage to a statewide license is it would speed competition, potentially with benefits, including lower costs, for consumers. He said he thinks a statewide franchise could cut bills by as much as 28 percent.

But his plan requires that a company like Verizon provide service to 85 percent of the state within six years after winning a franchise. That would “likely deter and delay, rather than promote, competition,” Azare said.

In contrast, Charles Bell of Consumers Union told lawmakers that Brodsky’s plan could lead to lower costs.

He said that since Congress deregulated the cable industry in 1996, prices in states with no effective competition for cable have gone up 64 percent, or about two and a half times as fast as inflation.

But prices have gone up 15 percent less in areas with competition, he said.

“A statewide franchise system with strong consumer protections and appropriate provisions to meet local needs could foster new video competition and discipline ever-rising cable rates,” he said.

Binghamton Mayor Matthew Ryan said “the key phrase for lawmakers should be universal access” to video services.

He said the firms should be required to provide more affordable broadband services for rural areas and more money to help citizens use public-access stations. Brodsky said another key provision would require the providers to charge the same for all information transmitted — a concept known as “net neutrality.”

“This bill would put the interests of average people first,” he said.