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Business, Free Enterprise and Constitutional Issues; Pro-Life and Pro Second Amendment. Susan Lynn is a member of the Tennessee General Assembly. She serves as Chairman of the Consumer and Human Resources subcommittee and on the Finance Ways and Means Committee. She holds a BS in economics and a minor in history.

Saturday, October 13, 2007

The return of the Cable Choice Bill

Debate is expected to resume in January on the Competitive Cable and Video Services Act better known as The Cable Choice Bill.

So just what is all the controversy about?

Consumers clearly want more choice of providers when it comes to television services, and quite naturally, cable companies don’t. However, unknown to most consumers is that cities use their tax dollars to pay a powerful lobbying organization to help conduct the bitter fight against the bill.

The debate is over whether cable companies should continue to obtain local franchise agreements in order to operate or if the legislature should allow the creation of a single statewide franchise agreement which would permit operators to serve the entire state.

Currently, cable companies must obtain the right to provide service by going city to city to negotiate a franchise agreement with local government officials. We looked at dozens of such agreements last year – each is essentially similar except some do insist on certain perks such as that service is provided free to city hall and the mayor’s office, etc.

Simple math reveals that with hundreds and hundreds of cities in our state such redundancy of legal work is very costly to consumers. The current process also leaves huge gaps in service for those outside of the “franchised” area. In fact, last year the FCC found that the local franchise agreement is the very cause of the vast lack of access to cable services, and that the process discourages competition among providers because it is too time consuming and costly. Providers just tend to concede certain territories to each other.

Last year the legislature heard the many concerns of our local governments and worked hard to address each one by rewriting the bill to state that local governments retain audit, build out, customer service, local franchises, PEG channels, police powers, total control of public right of way and local tax provisions. Franchise fees are paid directly to local governments. All federal laws still apply, and there is non-discrimination based on race or income.

Plus, this new process has the added benefit, and potential, to provide real competition and service to all.

We do not require telephone companies or internet service providers to operate using the same local franchise agreement process; rather, they operate statewide, taking advantage of economies of scale. In fact, the local franchise process is what has allowed companies to cherry pick the most lucrative towns and cities for years leaving many areas without competition and service.

Statewide franchising is a way to streamline the work required to obtain a contract to operate, stimulate the capital investment necessary to expand service, and encourage a competitive atmosphere among providers, thereby creating real choice and competition for every consumer in our state.

By State Representative Susan Lynn
Word count: 454

1 comment:

Charlie said...

I love good conversation. And I really love free-markets at work. I have a few questions about this bill.

1. What happens to the 10 homes w/i a mile rule?
quote: Under current rules, companies negotiate with counties and incorporated cities to provide services in that area, and they then must provide service cable to everyone, as long as there are 10 homes within a given mile (from http://www.freepress.net/news/21074)

2. Would it be better to encourage local municipalities to lower their barriers/encourage other companies to join?

3. What happens with multiple companies and the "last-mile" of wiring? Are there multiple lines ran, or just how does that work?

Thanks,
Charlie (from ole MJCA)