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from: Naples News

House Refuses to Change Video Franchise Bill in Florida

From Associated Press, March 22, 2007
By Bill Kaczor

The House refused on Wednesday to weaken a bill designed to make it easier for telephone and other telecommunications companies to compete for cable television business with existing providers.

Newcomers would be allowed to offer satellite television or other alternative technology to parts of a service area where they might not want to install cable, according to a provision the chamber retained by a voice vote.

Critics argued cheaper alternative technology would give new companies an unfair advantage and amount to discrimination against customers getting that service.

“Let it be true competition,” said Rep. Rene Garcia, R-Hialeah, who offered an amendment to remove the provision.

The bill’s sponsor, Rep. Trey Traviesa, R-Tampa, opposed the amendment. He contended existing cable companies already have an advantage through de facto monopolies and consumers would save millions of dollars in lower rates through competition.

The House is set to take a final vote Thursday on the bill (HB 529). If passed, it would go to the Senate, where similar measures have been introduced but not yet heard in committee.

The House bill is supported by telephone companies and opposed by cable companies, cities, counties and the Communications Workers of America union. Both sides claim they are looking out for the interests of the consumer.

Besides the alternative technology provision, the bill is designed to foster competition by stripping local governments of their authority to franchise cable service and turning it over to the state. Instead of negotiating with 67 counties and hundreds of cities, a company would have only to obtain franchise approval from the Florida Department of State.

“The way we regulate cable franchises today is fatally flawed,” Traviesa said. “Consumers know a monopoly when they experience its poor service and pay its higher prices.”

Existing franchises typically include build-out provisions that require existing companies to offer cable throughout their franchise areas to prevent them from “cherry picking” — offering services in one part of a community but not another.

Instead of a build-out requirement, Traviesa’s bill would prohibit discrimination on the basis of race or income.

Garcia and other critics say the alternative service provision is a loophole in that anti-discrimination requirement and will let competitors offer satellite TV — already available through companies specializing in that service — instead of cable in low-income and minority communities.

Traviesa said requiring newcomers to adhere to build-out requirements would increase their costs and keep rates high.

“Build-out is a government intrusion on private business,” he said.

The bill includes a sweetener added Friday by the House Budget and Policy Council — a provision that will stop the final part of a three-phase telephone rate increase the Legislature authorized in 2003.

Traviesa predicts it would save consumers $300 million, but under the 2003 law, ending the rate increase would allow phone companies to ask the Public Service Commission for further deregulation.

Another telephone-related provision would make it easier for low-income residents to obtain low-cost Lifeline Assistance phone bill credits.