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Cable proposals still need tuning

By A TIMES EDITORIAL
Published April 24, 2007

The fight over cable television deregulation is coming to a head in the waning days of the legislative session, and the news isn't good for consumers. Even the cable industry's self-serving opposition appears to be cracking in the face of a ferocious lobbying and public relations campaign by the telephone companies seeking an easy path into the pay-TV business. The Senate's cable deregulation bill, up for its final committee hearing today before heading to the full chamber, is still too slanted toward the pay-TV industry. While it's marginally better than a bill already passed by the House, there needs to be more protection for consumers.

The House and Senate bills would enable companies to get a license from the state and avoid negotiating contracts with individual cities and counties. That level of scrutiny, regardless of who provides it, offers important public benefits lawmakers should not lightly toss away. Supporters say technology has made the city-by-city licensing process cumbersome and obsolete. Cable and phone companies are investing heavily in new lines, channels and premium services to capture the lucrative "bundled market" for combined phone, Internet and television services. But the real barrier to entering the market is not negotiating with local governments; it is the capital costs and uncertainty of rushing to win the choicest customers.

The Senate's bill reflects that disconnect, creating a regulatory remedy in search of a problem. Cities and counties would be barred from granting new video franchises. The state would rubber stamp virtually every new applicant looking to break into the market. It would exercise nearly all the power communities now have to ensure providers do not cherry-pick customers or ignore complaints. Existing cable providers would continue to operate and fall under the state once their local contracts expire. But they could renege on commitments to serve poorer neighborhoods and maintain adequate service levels. That concession would render many local contracts almost meaningless and comes as the cable industry, a vocal opponent early on, now seems resigned to cut a deal, even though this race to the bottom comes at the expense of consumers.

New providers would have three years to serve one-fourth of low-income households, and five years to serve half of them. Contrary to outlawing cherry-picking, this legislation sanctions it - and even provides extensions of time for problems "beyond the control of the provider." Removing the ability of cities and counties to negotiate also could limit programs aired on educational and government channels - school board meetings, for example. A Senate analysis estimated local governments would lose $19-million in benefits that support these channels. With pressure statewide to lower taxes and spending, the net effect could be that cities and counties stop airing government meetings, one of the more meaningful benefits of allowing this industry in the right of way.

Senate Bill 998 does not achieve its intent: to treat the industry in a "nondiscriminatory and competitively neutral manner." Depending on the nature of existing cable contracts, some residents could turn to local consumer advocates while others would have to take their complaints to the state, which plans no additional hiring even though it expects "a significant number of complaints." Some providers can cherry-pick; others cannot. The rules on government and educational programming vary widely. How is this better than a regulatory environment where exclusive franchises already are barred and where cities and counties are required to be reasonable and license applicants in a timely manner?

If the issue is competition, and not breaks for business, the Senate has a lot of work to do.

[Last modified April 24, 2007, 01:02:30]