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from: SY-R.com

AT&T wins statewide franchise

By TIM LANDIS
BUSINESS EDITOR

Published Tuesday, October 30, 2007

A barely one-page finding from an administrative law judge could mean new consumer choices in cable and video early next year in Illinois — or, at least, that is how supporters of a cable-reform law hope it works out.

AT&T has won the first statewide franchise to offer video services under a law intended to encourage more competition in local cable markets. But it also is the only company to apply since the law was enacted in June.

Company spokesman Chris Comes said Monday the Illinois introduction of U-verse — the AT&T video-on-demand, television and entertainment package that sells at $44 to $129 per month in other areas of the country — will begin in early 2008.

“It will first be in portions of Chicago and the suburbs. It’ll be about a three-year rollout throughout the state,” Comes said.

Introduction of U-verse to individual neighborhoods will require extension of a high-speed fiber-optic network.

Comes said specifics of U-verse expansion to downstate communities such as Springfield will be announced as part of the Chicago introduction.

Telecommunications companies, including AT&T and Verizon, lobbied hard for reforms in the spring legislative session. They said the old law that required market-by-market negotiations for cable franchises was too burdensome.

Supporters also portrayed the law as among the first of its kind in the nation to encourage head-to-head competition in local cable markets between telecommunications companies, such as AT&T and Verizon, and cable operators, such as Comcast and Insight Communications.

Even the strongest supporters concede, however, it is difficult to gauge the effect on consumer choice and cable rates in the short run.

“We know the technology works, but it hasn’t been as smooth as we had hoped,” said David Kolata, executive director of the Citizens Utility Board. The Chicago-based consumer group was among the chief backers of the reforms.

Kolata said, even if AT&T is the only immediate entry, there are important quality guarantees in the law intended to improve service for all cable customers, including minimal response times for installations and outage repairs.

“Certainly, when there’s real competition, prices tend to go down and quality gets better, so we’re hopeful we’ll see other companies come in,” he said.

Illinois Commerce Commission approval of the first statewide franchise came with little fanfare last week. The commission unanimously accepted a one-page recommendation from an administrative review judge that AT&T has proved the company is ready to enter statewide cable competition.

“It’s their choice now whether they choose to offer video services. This just means they don’t have to go village by village,” said commission spokeswoman Beth Bosch, who added that no other applications are pending.

The AT&T franchise is good to 2013.

Verizon spokeswoman Karen Boswell said the company has no immediate plans to apply for a cable franchise in Illinois.

Video/cable services

# What changed?

# Legislation signed by Gov. Rod Blagojevich in June allows new cable companies to obtain a statewide franchise. The old law required companies to negotiate franchises with individual communities.

# Effective Jan. 1, 2008, all cable companies must offer toll-free customer service lines, answer 90 percent of calls within 30 seconds, fill installation orders within seven days and repair outages within 48 hours.

# What’s next?

AT&T has won the first statewide franchise for video/cable services, but has not yet announced specific plans for availability.