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10.4.07

LA local governments need to pursue true cable reform

While it’s good to see that more and more Louisiana municipalities are revolting against exclusive cable television franchise agreements, local governments must beware of the Trojan Horse language being pushed on them by the Louisiana Municipal Association.

Last regular legislative session, HB 699 nearly got an agreement in place that would allow non-punitively a variety of providers into cable provision. It didn’t because author state Rep. Billy Montgomery didn’t have the political heft to outgun opposition that got Gov. Kathleen Blanco to veto the bill – opposition in large part led by the LMA.

Yet now the LMA claims it is encouraging passage of resolutions by local franchising authorities to open up cable competition. At best, this is a half-truth: the LMA wants to have passed state legislation that will continue to divert the benefits of competition to government instead of letting them go to the people.

Attached to their model ordinance is an appendix of what the LMA would like to see as the model franchise agreement, around which state law would be shaped. In it, while it says it opens up competition, it really doesn’t. This is because it is not the exclusivity in agreements that presently stifles competition, but instead it is conditions the LMA would like to see reconfirmed that in effect would discourage competition.

For one, the LMA language continues to support the ability of local authorities to use pass-through charges in setting cable rates. These are fees local government tacks on that has nothing to do with cable provision but instead are used as backdoor revenue-raisers for local government. For another, the LMA model also, in arguing that competitors must come to agreeing to the substantially same language in existing contracts, foists build-out on new entrants – the idea that providers must be forced to provide service even where it is economically unfeasible to do so.

The vetoed bill would have allowed new providers to avoid both these competition-killing requirements, because the franchise granted would have been at the state level which would not necessarily have included build-out mandates or the ability to slip pass-through charges into agreements. This is why the LMA’s language, which disallows the state’s ability to award franchises, would do nothing to encourage competition and thus lower rates: if such costly, unneeded measures continue to be required, this will be a tremendous disincentive to any competition, and, given the huge start-up costs, would not make an attempt to enter these markets generally cost-effective.

If Louisiana municipalities like Shreveport and other franchise authorities want to get serious about enabling lower rates for their citizens, they need to disavow any support of the LMA language and instead support the old HB 699 language.

1 comment:

Kucing Gemuk said...

LOCAL GOVERNMENTS “PROTECT THE INCUMBANT’S INVESTMENT”

“By managing the deployment as we do, we protect the incumbent’s investment in existing infrastructure, we protect the public from unnecessary disruption to private business and to their safe use and enjoyment of the public right-of-way, and we ensure that new entrants are provided with unfettered access in a reasonable and timely fashion, while ensuring that they comply with all safety requirements. This system has worked well for cable, traditional phone and other providers for many years, and is necessarily performed by the local government.”
– Arvada Colorado Mayor Ken Fellman’s Testimony before the U.S. House Committee on Energy and Commerce and the Subcommittee on Telecommunications and the Internet Wednesday, April 27, 2005 (Fellman is also a cable franchise lawyer and VP at NATOA)

"PROTECT THE INCUMBANT'S INVESTMENT", YOU BET THEY DO, SO WELL THAT YOUR CABLE BILL SHOT UP 93% INCREASE (1995-2005 FCC source)

WHY DO THEY JUST JACK UP THE TV BILL

Comcast is raising the price of the average metro-area customer's cable bill by 6.9 percent starting March 1, yet they held the line on prices for high-speed Internet and phone services. – RMNews January 2007

THEY “PROTECT THE INCUMBENT’S INVESTMENT”, THAT MEANS NO COMPETITION. RESULT FOR YOU IS A 93% INCREASE IN YOUR CABLE BILL.

Comcast Profit Triples - Reuters, 2/1/07

How’s that for a double whammy – one week after Comcast announces a 7% increase for its captive cable customers, the cable monopoly announced record profits.

And as they rake in the cash and their executives get richer and richer, they fight every effort by their employees to get fair wages and benefits – all the while milking customers for everything they got!

As American Rights At Work found in a special report, wages for Comcast’s cable techs are a third lower than wages in traditional land-line telephone companies like at&t, where unions represent about three-fourths of the workers. Benefits are less generous and jobs are less secure, with annual turnover about twice as high.

Worse, Comcast fights tooth-and-nail to keep unions out, or decertify them once their in. Northwest Labor Press reports of a 37-page Comcast anti-union management training document that stated: “Comcast does not feel union representation is in the best interest of its employees, customers and shareholders.”

But it gets worse. Comcast is waging war against union employees – literally. During the AT&T days, unions made headway organizing in a handful of cities, including Beaverton, OR. But once Comcast acquired AT&T’s cable systems they began to systematically dismantle union shops…and show union workers the door. In Beaverton, Comcast vice president Curt Henninger made the company’s intentions crystal clear when he told commissioners in videotaped testimony: “I will tell you we are going to wage a war to decertify the CWA.”

Cable is anti-consumer & anti-competition

Legislators must send them the message that their days of pillaging customers and exploiting workers are over.