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from: Cleveland.com

Cable TV control at stake in Ohio
Local governments, telecom giants tangle over statewide contract

Sunday, April 22, 2007
Aaron Marshall
Plain Dealer Bureau

Columbus- Imagine your monthly TV bill dropping as video competitors fight for your business. You wear out your thumbs flipping through channels that never end, and cutting-edge technologies put you in the middle of the action on the football field. It could be a TV junkie's nirvana.

Or, imagine your TV service is screwed up, and no one at City Hall can help. You can't even watch your kid's football game because there's almost no local-access programming. Fly-by-night video operators tear up sidewalks and skip town. It could be a TV junkie's nightmare.

These two scenarios are being batted around in Columbus as supporters and opponents debate an important issue with a please-wake-me-up-when-it's-over name: statewide video franchising agreements.

The legislation, known as Senate Bill 117, which was largely crafted by AT&T and other telecommunications companies, would allow companies to negotiate a single statewide franchise agreement to deliver television and other broadband services.

Such a statewide contract would essentially wipe out the city-by-city deals that companies cut now to get into the pay TV and broadband game in a given area.

Battle lines are forming as mayors across the state and public-access TV groups push back against what they see as legislation slanted to help the telecommunications industry.

"Senate Bill 117 is really a free-for-all and a complete giveaway for AT&T and Time Warner and anyone else who wants to get into this business," said John Gibbon, the law director for Cleveland Heights.

Opponents are particularly concerned about provisions that would limit government and public-access channels; chip away at local government coffers by narrowly defining the "gross revenues" that are used to figure franchise fees; and erode local control over public rights-of-way.

But supporters of the bill say that the community-by-community approach is cumbersome because local governments have unreasonable demands. They say a statewide agreement would pave the way for consumers to pay less and eventually get better video services.

"There is a tradeoff between making sure that local governments get whatever revenue expectations they have versus the public's ability to get a decent price and competition for their service," said Sen. Jeff Jacobson, a Dayton-area Republican, who sponsored the bill.

Ohio lawmakers are tackling the issue because AT&T and other telecommunications giants failed to push legislation through Congress last year that would have created a national franchising agreement. So far, 11 states have passed statewide franchising agreements, and Ohio and 13 other states are considering bills.

Last Tuesday, as the Senate's Energy and Public Utilities Committee held a hearing on the bill, a horde of lobbyists from Ohio's telecommunications companies, including some of the 27 registered to work for AT&T, lined the committee room's back wall. They watched as AT&T officials and lobbyists -- including AT&T Ohio President Connie Browning -- testified, trying to drum up support.

Andy Emerson, an attorney who cuts the local cable franchise deals for the telecommunications giant, told lawmakers that in about a year he has secured only a dozen agreements among Ohio's more than 500 political jurisdictions.

"Clearly, there is a problem in going out and doing it on a municipality-by-municipality basis," said Emerson. He called cities that expect AT&T to match the fees paid by the current video service provider "absolutely unreasonable" considering that the company starts with no market share.

Browning told lawmakers that AT&T has embarked on Project Lightspeed, designed to add high-speed fiber optics to the company's existing network. The bandwidth bump will allow the company to someday add features such as viewing live TV on a broadband connection or accessing information on-screen while watching a TV program.

But opponents, who will have their say this week before the committee, argue that the statewide franchising legislation isn't needed. They say now that companies can sell bundles of products to customers -- TV service, high-speed Internet and phone service -- there will be more competition.

"I think the system works pretty good now," said Parma Mayor Dean DiPiero, a former House minority leader. "We're negotiating with AT&T now, so we don't need any further legislation to bring choice to our city."

During testimony, AT&T officials spoke of compromise as lawmakers asked about some of the bill's more controversial elements, including provisions on the public rights-of-way, how franchise fees to local governments are calculated and the number of public-access and government channels.

For example, the bill would limit cities to three public-access and government channels and allow video service providers to reclaim public-access channels that aren't substantially utilized. Under the current definition, a public-access or government channel needs to offer almost 10 hours a day of original programming to be substantially utilized.

"We have yet to identify any government-access or public-access channel in the state that would currently meet that standard," said Gibbon of Cleveland Heights.

Opponents also complain that companies would be allowed to cherry-pick portions of a community to serve since the bill requires that providers cover only 30 percent of low-income households within five years. In most local agreements, companies must serve an entire community.

Also a concern among city officials: the bill would allow companies to begin running lines in the public right of way with little local oversight. This is particularly important because the metal boxes needed to house AT&T's new high-speed fiber-optic networks are 4 feet tall and more than 4 feet wide.

Sen. Jacobson, who called the bill a starting point, said tweaks are needed in several areas, including the public-access concerns. "The real question is making sure there is actual utilization rather than people banking it and using it only some days," he said.

The legislation gives franchising power to the state's director of commerce, but opponents are concerned that it doesn't allow the commerce chief to regulate rates, terms and conditions of video services.

Bay Village Mayor Deborah Sutherland, a Republican who serves as the head of the Cuyahoga County Mayors and City Managers Association, said such an arrangement could hurt consumers.

"What consumer protections are there in the bill?" she asked. "Who do they turn to for help when they need help?"

As lawmakers hold hearings, AT&T is going beyond traditional lobbying to make its case for a statewide agreement. This month, an AT&T-backed group known as TV4US began running television ads across Ohio comparing the battle for television viewers to long-distance and cell-phone competition.

TV4US bills itself as a grass-roots group but is a front group partly bankrolled by AT&T, according to a recent report by Common Cause, a nonpartisan watchdog group.

"They are a wolf in sheep's clothing," said Dawn Iype, director of media research for Common Cause. "Citizens need to know that there are interest groups out there claiming to be citizens' advocates and that they sometimes aren't always on your side."

While TV4US representative Kelley Gannon wouldn't comment on what is being spent on the Ohio ad campaign, the group plunked down $2.4 million in January on television ads pushing statewide franchise agreements in markets across the United States, according to the Campaign Media Analysis Group.

Between the cadre of lobbyists and the TV ad campaign, the resources that AT&T is pouring into the bill have opponents worried.

"The fact that they have a lot of money in it scares me," said Parma Mayor DiPiero.

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