from: Iowa City Press [1]

Franchise bill worries some city leaders
Fear losing local control of cable deal

By Hieu Pham
Iowa City Press-Citizen
Friday, March 23, 2007

The state may be moving forward with a cable television franchise touted by supporters for breaking monopolies and lowering consumer prices, but local officials say they are concerned about another effect of the bill.

Although cities always have granted their own cable franchises, the bill would move that power over to the state.

"One of our priorities is having local control," said Iowa City Council member Regenia Bailey. "The more the state is trying to take away the power of local governments ... the more challenging it is to provide quality services and be responsive to citizens and their needs."

On Tuesday, the Senate approved the bill by a 44-6 vote, moving it to the House for consideration.

Supporters say state control will make it easier for other companies to break into the local market, which would increase competition and reduce prices.

Critics say the proposed system would not allow cities to customize their cable franchise agreements to meet local needs. In the current system, cities can negotiate special deals or provisions.

"We've negotiated community service standards in our franchise," assistant city manager Dale Helling said. "We're watching (the bill) closely. I think it has potential to have a great impact on local government."

Another sore point for critics is losing franchise fees that cities receive from dealing with cable providers.

Iowa City's 12-year franchise agreement with Mediacom generated $746,895 this fiscal year, according to city finance records. From that amount, about $153,000 went into the city's general fund, and the rest provided for the city's government channels.

Bailey and City Council member Mike O'Donnell said they feared what would happen to the local channels.

"Local channels are very important to this community," O'Donnell said. "Each community is an individual and has different priorities ... so I feel much better if we have a say."

Proponents have said local channels will be preserved. Also, cities will continue to get franchise fees and would collect the same fees from new providers.

Telephone companies such as Qwest, who have wanted to break into the television market, have lobbied enthusiastically for the bill. To be fair to cable companies such as Mediacom, who have had to establish service under the current system, the legislation would allow established cable companies to operate under the same terms if a telephone company begins offering service in a community.

Still, Helling said the legislation could look very different once adopted.

"At this point in time we don't have enough information on what the final product is like," he said.

In the last two years, a dozen states have created similar legislation to make it easier for new competition to enter the cable television market.