WI: Cable TV bill isn't best deal for consumers

Posted on April 2, 2007 - 10:27am.

from: Appleton Post-Crescent

Editorial: Cable TV bill isn't best deal for consumers

If competition means lower prices for cable TV services, a bill in the state Legislature could be a benefit to consumers.

But competition isn't the only thing this bill would allow — and that's why it wouldn't be a good deal in the end.

Currently, cable companies negotiate with each community to be their cable TV provider. Communities give companies access to public right-of-way in exchange for what's called a franchise fee. It's a percentage of a company's revenue from its customers in the community. Cable companies also agree to provide public-access programming.

Phone companies — such as AT&T, which is lobbying heavily in favor of the bill — want to get into the television game, too. But they don't want to have to go through the negotiating process with each community in the state.

The bill would move the franchising rights from communities to the state. Communities would still get a franchise fee, but it would be capped at 5 percent.

Supporters of the bill say the increased competition would lead to lower prices and better services for customers. That might be true. But it would have negative effects, too.

At a legislative hearing on the bill Tuesday, Janet Jenkins of the state's Division of Trade and Consumer Protection said it would eliminate customers' rights to have service repaired within 72 hours, to get a credit for service interruptions of four hours or more and to be told about rate increases 30 days in advance.

"We have significant concerns about the total lack of consumer protections in the legislation," Jenkins said, according to the Milwaukee Journal Sentinel.

A lawyer with the state Department of Financial Institutions, which would gain the responsibility to license the franchises, said the bill left the department no means to deny applications.

Communities and some customers also worry that the bill would hurt public-access channels.

Communities also are worried about getting less money from franchise fees than they do now. While they do bring in a significant chunk of change that gets spent on services, it's also basically a tax on customers, since cable companies are allowed to pass on those costs to them.

Perhaps municipalities would be better serving their residents by trying to find a way to eliminate franchise fees as a revenue source.

That's a side point. The main point is that legislation to allow cable TV competition would be worthwhile, but only if it doesn't damage what consumers are already getting

( categories: State Franchises | WISCONSIN )