PD STORY ON COPE ACT: SOME THINGS HENRY KNOWS BUT DIDN'T TELL YOUThis morning's
COPE Act story by Henry Gomez and Stephen Koff is disappointing on several counts. I say "disappointing" because Henry is one of the most clued-in local reporters in the country on the national franchising debate, and a story of this length could easily have accommodated more of what he knows.
First, the story's admirable qualities: It's timely. Gomez and Koff focus correctly on the heart of the bill -- the elimination of municipal TV franchise authority for the benefit of an AT&T business model. They put the hot-button Net Neutrality issue in its proper context, as just one of several important controversies surrounding the bill. They identify (briefly) a couple of other key issues -- the CBO prediction that the new system will cost cities and villages hundreds of millions of dollars, the potential for redlining of poor and rural communities. This is all good.
But... not nearly good enough.
Here are a few significant things that Henry knows about the COPE Act and AT&T that readers
don't know after reading this morning's story:
1)
The bill doesn't just free AT&T and Verizon from the necessity of seeking local franchises to get into the pay-TV business... it frees the current cable companies (Time-Warner, Comcast, Cox) as well. Under the COPE Act, AT&T's first Federally-franchised IPTV customer hookup in Cleveland will effectively void the city's cable franchise agreements with Adelphia and its likely successor, Time-Warner Cable. All the cable company has to do is apply for its own Federal franchise, wait 30 days for the automatic approval, and -- voila! -- no more pesky City Hall to deal with. Customer complaints, neighborhood service issues, even enforcement of the City's rules about the companies' use of public rights of way -- all become Federal issues, to be adjudicated by the FCC. Time-Warner, like AT&T, will be immunized from community pressure to extend new services to "low-value" neighborhoods, or support community media and technology training efforts, or even provide discount services to schools, libraries and community centers.
Please note that all this will occur
even if AT&T's market penetration in the city remains minimal, and Time-Warner remains the pay-TV monopoly in most areas, and city customers see little improvement in services or rates. Nothing in the bill requires the telecom or cable companies to actually
deliver on their promises. And this isn't an academic concern, because...
2)
"The new AT&T" has been in the cable business before, and abandoned it.In 1995 Ameritech launched a fiber-based pay TV business called Americast, which by 2000 had TV franchises in a hundred cities in Ohio, Michigan and Illinois, with over 300,000 customer households. They claimed to have a third of the market in the communities where they held franchises. Then SBC took over Ameritech and
sold off its cable business (in Ohio, the buyer was Wide Open West). Here's what SBC said five years ago:
Joe Izbrand, a spokesman for SBC, said his company "is really focused on data and broadband and long distance as our growth drivers, and our feeling is that cable is best left to cable providers."
Today's AT&T is just SBC with a different name. In 2001 they wanted out of their substantial, growing fiber TV business; today they want Congress to rewrite the franchising rules as a supposed precondition to getting back in.
And the PD helpfully refers to this as an effort to
"rewrite outdated industry rules" because AT&T has
"fallen behind cable firms"! Well, yeah, it's easy to fall behind if you sit down in the middle of the race.
3)
Rumors of lower prices with cable competition are greatly exaggerated.Wide Open West competes directly with Time Warner Cable in Columbus, whereas in Akron, Time Warner is still pretty much a monopoly. WOW offers "basic digital cable" bundled with 4 mpbs Internet for $88 a month, compared to Time Warner's $97 for a similar package. (Road Runner may be a little faster, and the TV channels are not identical, so "similar" is about the best I can do.)
So is Time Warner service cheaper in the competitive hotbed of Columbus than in the monopoly hothouse of Akron? No, Virginia, it's not cheaper. No price wars, no competitive rate-slashing. It's pretty much what AT&T's chairman
told Wall Street analysts to expect from his company's entry into the pay-TV market under a national franchising system: "I don't think there's going to be a price war." Of course this isn't what his lobbyists are telling Congressmen like Paul Gillmor, or what Gillmor (and Sherrod Brown) are telling PD reporters... who, for some reason, are not asking them to explain the discrepancy.
4)
The COPE Act and its companion legislation in the Senate not only write municipalities out of the cable franchise process, they also write new rules for cities thinking about building their own high-speed networks.The COPE Act leaves communities free to provide network services as they see fit, while the Senate bill requires any public network proposal to be put out for bid to private companies first. Given the legislative process -- the bills pass with their differences and then are "reconciled" through horse-trading in a semi-secret conference committee -- it's almost certain that the final outcome will be new Federal limits on the rights of community-owned networks to compete, anywhere the telcoms and cable companies want to stop them.
So why do Gomez and Koff fail to mention these things, each of which is directly relevant to its northeast Ohio readers? And why didn't Gomez and Koff interview some local people who could have commented on the bill's
local impact with some authority -- e.g. people at Cleveland City Hall who face negotiations with Time Warner on the terms of its takeover of Adelphia's franchise this Summer?
I don't know. But it's disappointing. I hope Gomez and Koff have more to come.
Update: Here's
Henry's take on the story.
Update 7:45 pm: From ITworld.com...
The U.S. House of Representatives is due to debate a wide-ranging telecommunications reform bill as soon as Thursday, and lawmakers will have a chance to vote on a net neutrality amendment, House leaders said...
The House Rules Committee, which decides what amendments will be allowed on the House floor, voted Wednesday to allow two major net neutrality amendments to be voted on when the House debates the telecom bill.
One amendment, based on a bill sponsored by Representative James Sensenbrenner, a Wisconsin Republican, would change U.S. antitrust law by requiring broadband providers to give independent content providers the same speed and quality of service as they have.
The second amendment, sponsored by Representative Ed Markey, a Massachusetts Democrat, would require broadband providers that set aside faster connections for new services such as video over Internet Protocol to offer the same speeds to competing services.
Barton, chairman of the House Energy and Commerce Committee, said Wednesday he opposes a move to allow a net neutrality amendment prohibiting broadband providers from blocking or impairing competing Web content.