Bill would allow cable providers to bypass local governments

Associated Press • Mar 20, 2007 at 11:54 AM

NASHVILLE - Proponents of legislation that would allow companies to bypass local cable television permits say the measure will create competition that translates into better prices for Tennessee consumers.

Rep. Steve McDaniel, R-Parkers Crossroads, discussed his "Competitive Cable and Video Services Act" before the House Commerce Committee on Tuesday.

A similar version - the "Competitive Cable Services Act" - was introduced in the last session, but did not progress out of committee. The caption of McDaniel's bill mirrors the one last year, except it clarifies that video services will be included in the current legislation.

The new bill "requires any entity or person seeking to provide cable or video service over a cable system or video service network facility in this state to apply for a state franchise with the Secretary of State."

Currently, McDaniel said a cable service provider seeking approval in Tennessee has to negotiate a franchise fee with over 600 local governments. He said his legislation simply "makes it easier to get into Tennessee's marketplace."

"Not only does competition give people a choice, but it encourages better prices," McDaniel said.

One of the bill's main supporters is telecommunications giant AT&T Inc., which acquired BellSouth Corp. last year in a $84 billion deal. AT&T wants to be able to offer bundled services - like voice, high-speed Internet and cable TV. Marty Dickens, president AT&T Tennessee, said 12 states have passed similar legislation and he believes Tennessee should be on board. He cited a recent Wall Street Journal article that noted "competition from telephone companies led cable companies to plan minimal or no rate increases for 2007." In Keller, Texas, one of the state's that passed the legislation, Dickens said consumers saw a 25 percent drop in their bill after competition was introduced. "As has been shown time and again, competitive markets bring prices down for consumers," Dickens said. McDaniel's said there has been a lot of discussion over the past year with opponents of the measure to try to reach a compromise. He said two provisions of his bill that resulted from those discussions include franchise fees remaining the same and going directly to cities. Both McDaniels and Dickens said they plan to have more discussions with the Tennessee Municipal League, one of the bill's biggest opponents. "We look forward to sharing our thoughts with the committee," said TML spokeswoman Carole Graves. Chad Jenkins, TML's deputy director, has said that cities would lose their leverage over cable companies if they are cut out of the franchising process. For example, he said cities would lose the power to require cable companies to connect to schools and less lucrative parts of the community. Stacey Briggs, executive director of the Tennessee Cable Telecommunications Association, said she questions the need for legislation to help AT&T's entry into the video market in Tennessee because it can under the current law. "Phone companies since 1996 have been allowed to enter the video market," Briggs said. "What they're trying to do in this legislation is get a special law and a short cut that is not good for consumers." Gov. Phil Bredesen declined to voice an opinion on the bill. "I would rather let the Legislature handle that," he said. The companion bill has yet to be heard in the Senate Commerce, Labor and Agriculture Committee. (AP) The full text of HB1421 can be viewed on the General Assembly's Web site at http://www.legislature.state.tn.us/ AP-CS-03-20-07 1908EDT

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