Wednesday, December 12, 2007

More on AT&T's Plan To Avoid Local Fees

All the noise and furor (and millions spent lobbying state legislators) from AT&T demanding Tennessee law be changed so that AT&T does not have to negotiate with cities for franchise contracts (depriving them of revenue from fees and handing over control of rights-of-way) is apparently not important in Mississippi. In that state, they seem to have no problems working community by community, just as all cable providers currently operate.

R. Neal has the details in this post and notes as well that Georgia gave AT&T what they wanted and as many as 200 families in Atlanta will benefit.

Also, Stacey Briggs, executive director for the Tennessee Cable Telecommunications Association, has challenged claims from AT&T that it takes too long to devise local franchise contracts:

Briggs also challenged statements made by Morton that city-by-city franchising takes 13 months. AT&T has been invited by some Tennessee communities to deploy competitive cable services and those municipalities have promised expedited franchise negotiations, Briggs said, but AT&T has not filed for local franchises in the state, investing its capital instead in a statewide solution.

An AT&T media representative did not respond to a request for comments on Briggs's letter by deadline Thursday."

Some background on the issue and the stance taken by State Senator Steve Southerland, chair of the committee reviewing the proposal from AT&T, are here.

UPDATE: North Carolina went the way of state-regulated franchises, with some poor results:

Beware of legislation promising "competition." A bill passed by the General Assembly last year that was intended to jump-start competition in the cable TV industry has had the unforeseen consequence of costing the state and local governments across North Carolina millions of dollars in lost revenue. And six months after the law went into effect, that promised competition is nowhere in sight.

The Video Service Competition Act was passed with the promise that telecom companies such as AT&T and Verizon would leap to provide video services across the state. (Video is the new term for cable TV, to catch up with the technologies that deliver it. More and more, Internet, video and voice—formerly phone—are delivered through the same pipes.) The companies would offer competitive pricing and give consumers used to relying on one, or no, service provider, choices in service—if only the state would make it easy for them to get in the game. Under the old system, a cable TV provider would negotiate with the city, town or county where it wanted to provide service. But the phone companies didn't want to negotiate town by town, so they pushed for a statewide franchise system with little, if any, oversight. There's no approval process, and as long as the paperwork is filled out correctly, the state is required to accept the company's plan.

The bill's main opponent, the League of Municipalities, backed down after lawmakers reassured the group that the revenue local governments collect from cable TV taxes—money that goes into the general fund to pay for basic services, such as fire and police—would stay the same.

But according to figures from the N.C. Department of Revenue, local governments have received 27.8 percent less across the board under the new system."

Read the entire article here.


  1. Anonymous6:54 PM

    Dang Joe,

    In the spirit of disclosure that's become the fashion in state politics, I'd have thought that you might have wanted to disclose that you executed an infomercial on behalf of Charter Communications.

    Two points are key here.

    In that infomercial, which ran incessantly on the Charter channel, you lobbed softball questions to Charter officials on why MUS could not succeed as an ongoing operation and why Charter is better.

    The evolving reality is that MUS is ahead of market share projections. They've done this by offering the same or better product at a better price.

    The second point is that the state senator who sponsored the original legislation withdrew when faced with heat.

    The bottom line is that AT&T almost certainly will never get majority support to circumvent existing franchise legislation.

    Even if they did, they would not arrive in Morristown to challenge MUS any time soon.

    This blog entry is a transparent attempt to defend Charter.

    really, dude

  2. Anonymous10:36 PM

    What AT&T needs to do is start petitioning that the cable companies that offer phone service get regulated as a phone company. Any cable co that offers voip needs to pay the same tariffs, connection and termination charges as the telcos, then competition would be a little more equal. Why should AT&T pay cable franchise fees, they aren't a cable company. Is iptv that different than voip? If cable paid the same rates as phone companies then voip phone calls would cost as much and traditional phones and prices would go down for all.

  3. ah, the irony of some anonymous careless reader to chide me on the (in their words) "fashion" of disclosure ...

    from an October 6, 2005 post I made it rather clear:
    "And before anyone tells you different, let me state it plainly - I do promotional work for Charter Commnunications, hosting a question and answer program with Charter executives about local issues and general questions about their operations. I am not a paid employee."

    That's a point I've made more than once, careless reader. Bully for you for being an MUS customer. This issue goes far beyond your satisfaction with them.

  4. tnreader9:36 AM

    classic Morristown Hate from Anonymous, Joe. They mislead and they insult, lacking any factual information. And of course, all done "anonymously".

    Your links/articles had nothing to do with Morristown government's decision to back a $20 million-plus taxpayer backed bond to build an internet/cable system to serve a few thousand people. Anonymous is probably a city employee or contracted government worker who sees tax dollars as a personal piggy bank.

    Shameful tactics.

  5. Let me start off by stating that I do not post anonymously here, and that I am not defending any comments made to this thread by anyone other than me (and this is my first on this thread). I feel, however, that tnreader is not cognizant of all the facts on this issue.

    The state-of-the-art network built by MUS is not going to serve "a few thousand people", as you state. When it is complete, it will serve every county resident-all 58,000. This service far exceeds Charter's, or Comcast's current ability, and at a price that is less than either of the cable companies' introductory rates. It is also better than AT&T's published rates for comparable service. To sum that up: you get a lot more with MUS than with any of their competitors, and at a smaller price.

    Now. tnreader, this is a post about AT&T's attempts to circumvent the current system for cable franchising. If they are successful, you can bet that your property taxes will increase, and by more than whatever savings competition brings. Local governments will have to make up for the franchise fees they will lose.

  6. Anonymous12:11 PM

    Amen Snitka,

    Here's one fact Tnreader: The truth is that MUS can repay an $18 million bond issue for fiber optic Internet, TV and telephone service with fewer than 5,000 customers inside the city limits.

    The same is true for the $18 million bond issue for outside the city limits.

    How much more was Charter making with thousands more customers?

    I have nothing against people making money, even billions. Paul Allen made billions in Microsoft, but it's no secret he's raking in tens of millions as the largest stockholder and president of Charter.

    He has a 412-foot, $300 million yacht that comes with a submarine, helipad, hangar, concert hall, basketball court and a garage full of luxury cars.

    Also, MUS is just plain better. With Charter I could get music download rates - at best - of approximately 45kbs.

    With MUS, I've gotten download rates as fast as 280kbs. You can easily download three songs at one time at rates over 45kbs.

    Oh yeah, it's also cheaper.

  7. "Local governments will have to make up for the franchise fees they will lose."


  8. Anonymous12:44 PM

    What franchise fees will Morristown lose? All cable TV providers pay franchise fees.

  9. The city of Morrisown will lose no cable franchise fees, because Hamblen County holds the cable franchises. Hamblen County will lose franchise fees because they will be paid to the franchising authority-the state of TN.

  10. It's all about build out.

    It's not that AT&T doesn't want to negotiate with local governments. The reality is AT&T cannot abide by the rightful position of local governments that it serve everyone with advanced Internet-based telecommunications services and not redline certain neighborhoods, arbitrarily picking winners and losers.

    AT&T wants the state to sanction and codify this market conduct so it can roll out broadband on the cheap. This will divide Tennessee into two states, one with high speed Internet access and related services and one without. Giving the blessing of public policy to this strategy will have negative repercussions for many years to come.

  11. I like to use AT&T plans...