Editorial: Cable ‘reform’ results fall short

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Dec 14, 2009 No Comments ›› admin

Eau Claire Leader Telegram – December 14, 2009

When it became law in January 2008, the so-called Video Competition Act was supposed to do two things: reduce cable TV prices and encourage competition in what is typically a monopolistic industry.

After nearly two years, it’s clear the law should get an “F” on its first goal and an incomplete grade on its second.

The legislation – which was backed by the telecommunications industry and signed by Gov. Jim Doyle – eliminated local municipalities’ ability to sign franchise agreements with cable providers. Under the old system, in exchange for allowing a cable provider access to customers and public rights-of-way, a city could limit basic cable rates and require the cable company to pay fees to the city, some of which were used to support public access channels, such as the two operated by Community Television in Eau Claire.

The Video Competition Act replaced this local control with a statewide franchising system, which allows new providers – notably AT&T – to begin offering cable TV without negotiating deals with every city, village and town where they want to operate. Supporters said this would make it easier for competitors to enter the cable marketplace and thus drive down costs.

Except it hasn’t. According to a report by the nonpartisan Legislative Audit Bureau, basic cable rates rose 21 percent over the past two years, while expanded basic rates rose 11.5 percent.

As for competition, that hasn’t come either – at least to the Chippewa Valley or most of Wisconsin. It’s hard to say when it will: During a meeting with the Leader Telegram editorial board last week, Scott VanderSanden, AT&T Wisconsin president, declined for competitive reasons to say when his company might offer cable service here. Since the bill was enacted, however, AT&T has expanded its reach, and now offers its U-Verse cable TV service to about 500,000 housing units in the Milwaukee, Madison, Janesville-Beloit and Fox Valley areas. Smaller companies have laid plans to offer competitive service in other communities, including some in northwestern Wisconsin. Perhaps, in the long run, competition will arrive in our corner of the world – but don’t hold your breath.

And while it hasn’t led to lower prices or widespread competition, the Video Competition Act will soon have one tangible effect: After Jan. 1, 2011, cable providers will no longer have to pay fees to support public access channels. That could spell the end for these vital public forums, which cover government meetings and community events that commercial stations often ignore.

Fortunately, a new bill, sponsored in the state Senate by Sen. Kathleen Vinehout, D-Alma, would rectify some of these shortcomings. Among other things, it would allow municipalities to assess a 1 percent fee on cable providers to continue funding public access channels. In addition, it would accelerate the rate at which video providers have to make cable available in their service areas, thus speeding the pace of competition.

Revising the law might allow more Wisconsinites to benefit from cable competition while not losing the public access channels that enrich their communities.

– Tom Giffey, Eau Claire Leader Telegram editorial page editor

The issue: The Video Competition Act, which became law two years ago in Wisconsin.

Our view: The law hasn’t met its goals of making cable TV rates cheaper and service more competitive; improvements are needed.

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