AT&T pushing to offer cable services statewide

Hank Hayes • Dec 16, 2007 at 12:00 AM

Gregg Morton is selling an idea the cable companies don’t want you or Tennessee lawmakers to buy.

Morton, the state president of AT&T, is the pitchman for his company having a statewide video services franchise that could shake up Tennessee’s telecommunications industry.

It’s a proposal that bucks Tennessee’s traditional business protocol, and has drawn the ire of the Tennessee Cable Telecommunications Association (TCTA) and other powerful lobbying groups such as the Tennessee Municipal League (TML).

Morton, in an interview held at the Times-News, acknowledged the public at large really doesn’t care about AT&T or the welfare of cable companies.

“What they do care about, though, are competition, choice and better prices. That at its core is what this issue is about,” Morton said of AT&T’s quest for a statewide video franchise.

With a state franchise in hand, Morton said AT&T could create more than 2,000 jobs, invest an estimated $350 million in its telecommunications system and make a run at offering the so-called “triple play” of telecom services — phone, Internet and cable TV. AT&T does not provide local phone service or broadband service in Northeast Tennessee.

AT&T’s legislative push for a statewide franchise failed in the last session of the legislature, but the telecommunications giant will reboot its effort with a new piece of legislation moving on Capitol Hill in 2008.

“This bill has been called a lot of different things — the AT&T bill, the AT&T versus cable bill, and the lobbyist full employment act,” Morton said. “What this bill does is open up the market for any provider to come in and serve whatever area they want to serve — not just AT&T. ... Yes, we are a big company with deep pockets, lots of resources. But we’re still a new entrant. We have zero customers, we have zero market share. When we come in, there is no guarantee we get customer one. We’re going to have to fight an entrenched incumbent in cable as well as satellite to win customers in the marketplace.

“If customers don’t like our service, they won’t buy it. If they don’t buy it, we can’t build it out.”

Morton insisted AT&T’s deployment plan includes rural areas and could address specific consumer needs, such as offering a la carte instead of tiered cable TV service.

“If the market demands it, we’ll provide it,” he said.

Instead of local governments authorizing video franchises, AT&T wants the Tennessee Regulatory Authority to be the franchising entity in the state. Local governments, said Morton, would still have access to public channels, would still get franchise fees, and would still have control over access to public rights of way.

“The other thing this does is allow cable companies to compete against each other. You don’t find Comcast and Charter competing against each other today,” Morton said. “Local control has allowed cable rates to go up. ... TML doesn’t want to talk about that, and cable certainly doesn’t want to talk about it. The only way you’re going to fix that is through competition.”

AT&T has pushed through similar legislation or has executed telecommunications agreements across other Southeast, Southwest and Midwest states with success.

When asked why AT&T won’t negotiate individual franchise agreements with localities, Morton said he would have to approach about 300 local governments.

“I’d like to have one standard framework that I know works everywhere so I have investment certainty. ... For me to go to each one of those separately and engage in negotiations 300 times takes quite a bit of time,” he said. “But I have not had one mayor articulate to me specifically what they are losing. ... Cable doesn’t have to go city by city to get a telephone franchise. Why should we have to go city by city to get a video franchise?”

For more information go to www.wewantchoice.com.

For TCTA’s position go to www.keepitlocaltennessee.com.

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