This bill by Rep. Billy Montgomery would allow telephone companies to provide channel-selectable cable television service by going through a state franchising agreement, rather than by negotiating one by one local contracts. While the phone company side of the story is that greater competition ensues and the cable company side is that the phone companies get special privileges under this bill, the conflict actually revolves around other considerations:
This answer depends upon how one conceptualizes the scope and purpose of local government. The organizations representing these governments have taken the position that local government needs to control the marketplace to excise from providers what it thinks is best, and thus opposes the bill. Proponents of the bill see the marketplace as a better, more efficient distributor of resources regarding this area of policy – and they have the better of this argument.
For example, why should there be buildout provisions? It’s not like cable service, unlike water and electricity and/or gas, is essential to anybody’s life. Let the market decide who has access to cable; if enough people demand it, providers will do so. Why must government mandate this? Why is that so important to the polity?
In the end, as is so often true in politics, you need to follow the money to understand who supports what. And again, it’s quite simple here despite the bill’s complexity: the current arrangement allows local governments to divert more money to their own coffers, extracted from the citizenry itself in the form of pass-along charges from operators, than probably would happen under the bill (the bill’s supporters would say not as signing contracts with phone companies for the service would grow the market at the expense of the one provider local governments cannot extract from, satellite, while its detractors argue legal changes could allow phone companies to evade paying such fees to local governments).
This is why the conflict properly is viewed as one of local government rights vs. the peoples’. Do local governments have the right to raise money through a back-door scheme as under the current law and justifying it by referencing supposed benefits such as “buildout,” or does the state have the power to impose greater competition that may cuase local governments to lose revenues but which would aid consumers (and recall that all local governments in Louisiana, even those 32 entities operating under home rule charters, are subordinate to the state government that created them and may regulate their behavior)?
The answer should be obvious: the latter, and even objections to this as being a “double standard” do not stand up under scrutiny. For example, one objection is that contractual arrangements have been made between local governments and cable operators for extended periods, locking in the operators under conditions that are more stringent than those that could be specified under this bill, putting them at a disadvantage. So what? This could be solved by state statute, by voiding all such contracts and allowing for renegotiation.
Another is that customer service standards no longer could be mandated. But that’s necessary only in a near-monopoly situation which typifies landwire service today. If there’s real competition, the marketplace competition will eliminate the need for government to mandate.
In short, even if one phone company likely would take up most of this new market, the fact is it would bring competition to a monopolistic market not so much dominated by cable companies, but by the local governments that use cable companies to create the near-monopoly to benefit both. The simple fact is, even if you assist a dominant supplier into a marketplace, if it squares off against a favored dominant supplier backed by government, more competition has been introduced and consumers ineluctably benefit. Two would-be monopolists competing prevents that market from becoming a marketplace ultimately dictated to by government. (Indeed, under the current law a local government could deliberately favor a provider for political reasons, and pass any additional costs into consumers.)
In the final analysis, even if local government may lose revenues with this bill’s enacting into law, consumers as a whole gain. That’s why it was good that the bill advanced today in the House, and that it should become law.