Friday, April 06, 2007

How Video Franchising Works

They've got some experience under their belt with state video franchising in Virgina and, according to an article in the Newport News paper, some of the opponents' worst fears are being realized. Verizon, who is building out a Fiber to the Privileged (FTTP) network (If this is unfamiliar territory drop to the bottom and read up on the background to this story.)
The map submitted to the city of Newport News also leaves out the greatest concentration of poor, black residents in the Southeast community. This map is supposed to include the plans for the first three years of service.
No surprise, eh? But it is interesting that nobody wanted the public to know:
When asked by the Daily Press, both Newport News and Verizon officials initially denied that they had a map of the service territory.
Of course, these guys have to have maps of their service area. How else could they possibly roll trucks to install service or tell customers whether or not they can have the new FTTP service? Why not just say so? Well part of it is that it is embarrassing for both--the phone company doesn't want to admit to doing what it promised the legislature that it wouldn't just last year. The city doesn't want to admit that it doesn't have the power any longer to force the company to serve all of it citizens in return for using their property. But their common interest is in keeping the new map secret from the cable company. The new state law requires equal treatment (of corporations, not citizens, mind you):
Part of the compromise from last year's legislation means that existing and new cable companies must be treated equally. If the city grants a new competitor such as Verizon more favorable terms than those put on Cox, they must also allow Cox to switch to the new agreement.
So Cox could use that clause to back out of an area that it no longer wanted to serve--if the phone company wasn't planning to serve it--and state law says that a municpality can never require more than 80 percent coverage. That 20 percent that was to be permanently left out? As we've already seen: the poor, minority areas. That's fair, right? A level playing field?

That's the way state-wide video franchising works.



[Time out for Background]
The battle over state-level video franchising laws is spreading with Verizon and our own AT&T being the major proponents. While Louisiana escaped last year's version of this law, with state-level video franchising still being pushed across the nation and a version being pushed by the FCC it's worthwhile to notice how its working out in other places. Opponents have claimed that redlining out minorities and the poor in order to gain a competitive advantage over traditional cable companies whose franchise agreements with local governments have required them to serve all segments of the community. Phone corporations, they claim, have wanted to raid only the most profitable segments of the markets and leave low-profit neighborhoods to the cable companies whose past contracts had required them to serve the whole community.

State video franchising is a scheme pushed by the phone companies that allows those companies to enter into the business cable business without getting the same permission to use local municipal property for which cable companies have traditionally had to negotiate. (Without using local rights-of-way to run their cables companies like
Cox and Comcast would not be able to get their services to local residences. Traditionally contracts that allow the cable company to use municipal property in exchange for cash payments, in-kind provisions, and universal service commitments, are called "cable franchises.")
[/Time out for Background]

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