Sunday, June 05, 2005

Telephone company defiant

SBC strikes defiant tone after legislation

The phone companies are used to getting their way. But a recent defeat in Texas has SBC (also known as SouthWestern Bell) charting a new course for the Bells: outright defiance of the law. Federal law requires cable operators to negotiate contracts with local governments for the use of rights of way and other city property. SBC just engaged in a bruising set of battles in Texas in which it lost both in an attempt to outlaw municipal wireless and an attempt to take local control of franchise agreements out of the hands of those who own the property and transfer the contract to the state level—a level of government the Bells have always dominated. Apparently losing doesn't sit well and SBC has gone from fighting a pitched battle to ensure state control of franchises to the cool assertion that they never needed to get a franchise in the first place:
Cable operators have long had to negotiate franchise agreements with each city they serve, but SBC doesn't to because it will be offering TV service with new Internet technology that isn't subject to local regulation, Senior Vice President Jim Epperson said Tuesday.
What is astonishing about such stuff is utter lack of any pretense that anything is at stake other than the corporation's self-interest. Last week doing the franchise "right" was crucial to the salvation of the American consumer and a moral imperative for every Texas legislator. This week the franchise never mattered anyway. There was a day when even corporate shills felt obliged to notice and attempt to explain away such self-serving inconsistencies. Not today. Everyone understands that all the explanations of the Bells are faux--that their relationship to the truth is never more than coincidental--and that the only reason any reason is uttered is to prop up whatever management has decided will be most profitable for the company. We are all supposed to understand this. And the agreement that this is all that is really going on runs so deep that reporters, who are especially "cued in" on such matters, don't even bother to notice the apparent contradictions.

I'm old school. It still bothers me.

I've pointed out before that all the hoopla about "competition" and "level playing fields" that the Bells trot out when trying to evade their local obligations are just attempts to cover their hopes of developing or maintaining special privledge. The key element in the competitive advantage the Bells seek in relation to local franchises is not how fast they can get to market with a video product. And it is not even that they are desperate to avoid fees to local governments--after all, the state-wide franchise that they were pushing in Texas would have required hefty fees. No, the real, desperately needed advantage that both eliminating the franchise concept or moving it to the state level would accomplish is that it would eliminate universal service. The Bells want to be freed to provide advanced, high margin services only to the most profitable (read: wealthy) parts of each city and town. They want their cable competition pushed into less and less profitable marginal areas by the local requirements that all of a town's people be offered the same service at the same price.

Luckily, reporters are begining to regularly notice and report on this:
Cable operators accuse the phone companies of trying to dodge rules requiring a television provider to serve all neighborhoods, even poor ones.

The Texas Cable & Telecommunications Association seized on an internal SBC report from last year in which the phone company told investors it planned to target its new network at 90 percent of "high value" homes but only 5 percent of "low value" homes.

"It's a fancy way of defining redlining," said Tom Kinney, the Texas cable group's chairman. "It creates a bigger gap in the digital divide."
For once, the cable guys are right.

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