Paul Soglin: Waxing America

Wisconsin Senate Passes "Video Competition" Bill; Defeats Amendments To Make It More Consumer-Friendly

I just consumed another entire day watching the "Video Competition" bill progress towards becoming law in Wisconsin. The Wisconsin Senate debated and defeated a long series of amendments that would make the bill more consumer-friendly, more responsive to rural needs, more supportive of local PEG channels, more limiting in its terms and conditions and less of a giveaway to the cable and phone companies, and more responsive to the future importance of broadband infrastructure to our economy.  Instead, the bill passed almost entirely as introduced in the Senate, and will need minimum adjusting to conform to the Assembly's version.  It's a triumph for Senator Jeff Plale (D- Milwaukee), the chief Senate sponsor, and newly elected Majority Leader Russ Decker (D-Weston), who made passage his first priority.

Recognition for their efforts to amend and improve a bad bill must go to Senators Mark Miller (D-Monona), Kathleen Vinhout (D-Alma), and Judy Robson (D-Beloit), who worked hard to convince their colleagues that they were being sold a bill of goods. Almost all the Republicans voted as a bloc against their amendments, as did several Democrats.  It was a depressing process to witness, especially seeing many cable and phone company staffers and lobbyists watching their dollars at work.

Senate President Fred Risser (D-Madison) patiently and fairly presided over the session, and should be thanked for his many efforts to improve the bill in the last few months.

Senator Mike Ellis (R-Neenah) kept straying off the GOP reservation, as he is wont to do.  He kept pointing out the contradictions between what Sen. Plale was saying the bill would do, and the bill's actual language. At one point he said "Senator Decker is laughing all the way to I better not say where..." as Minority Leader Scott Fitzgerald (R-Juneau) glared at him.

Special mention and a medal should go to Mary Cardona, head of the Wisconsin Association of PEG Channels, who pulled off a lobbying loaves and fishes act with meager resources and a real grass-roots coalition.  Most of the PEG-related improvements from the original bill and many of the other improvements resulted from her efforts, which included a great last-minute op-ed piece in the Capital Times:

AT&T wants a license to turn a quick buck and is about to get it.

Cable wants to extract greater profits from Wisconsin by getting rid of community investment and is about to get it.

Residents should be hopping mad.

- Barry Orton

Republican Cable Bill Will Raise Property Taxes

Lost in the cable television discussion is the hidden property tax hike found in AB 207, the bill already passed by the Republican-dominated Wisconsin Assembly.  It contains a tax hike that is estimated to be as much as $2 million state- wide.

That is $2 million in property tax increases at the local level and/or a corresponding reduction in services.

Most municipalities in Wisconsin fund about 40 to 60% of their operations from the property tax. The additional revenues needed to operate the local budget comes from fees, fines and forfeitures, some shared revenue from the state, and a few other limited sources.

One of those sources is the franchise fee paid to cities by cable operators to use the public right of way.  Most cities that issue franchise permits to Charter or Time-Warner use part of that money to fund local cable TV programming and the remainder to run the city, town, or village.

The public right of way belongs to the people and it is not unreasonable for the public to be compensated.  After all, if Ralph wanted to operate his car dealership in the public right of way, we would expect him to pay some kind of rent. Or if Regina wanted to set up her real estate office in the right of way, it is reasonable to charge her, and to periodically review the terms and conditions of the lease as conditions change over time.

The sponsors of AB 207 want to change this system, which has been in place in Wisconsin since the 1950s, and give cable companies and AT&T franchise rights in perpetuity.  The bill also reduces in several significant ways (eliminating PEG fees and construction permit fees, for example) the rent to use the public right of way; thus the hidden property tax hike.

Foul.

Wisconsin State Senate Minority Leader Fitzgerald Finds "Video Competition" Bill Lobbying Shameful While At The Same Time Arguing For Bill

Stopped by the Capitol today and watched the Senate for a while.  They were debating one of the tiniest ethics reform issues: whether legislators should, like all other Wisconsin employees, be forced to wait 12 months before being permitted to lobby state government. Somehow, Minority Leader Scott Fitzgerald (R- Juneau) managed to castigate Democratic Party Chair Joe Wineke, a former State Senator, for lobbying on behalf of AT&T on the "video competition" bill, and at the same time blast Majority Leader Judy Robson (D-Beloit) for holding up the bill.

That's why I could never be successful in politics; I find it hard to argue opposite positions on something simultaneously.

Nice editorial on the AT&T bill in the Capital Times today:

Real regulatory reform doesn't come from the corporations that are supposed to be regulated. It comes from citizens and their representatives, working with independent experts who understand how changes in technology and in the regulatory climate make it possible to do better for the state.

Legislators should set the agenda in the Legislature. They can do that by establishing a special committee or task force charged with examining current regulations in order to determine what changes would be best for consumers and communities.

Not this time, I'm afraid.

- Barry Orton

Wisconsin Public Television's "Here and Now" Features "Video Competition" Bill, Illinois Beetles, Invasive Species

Tonight's "Here and Now," on Wisconsin Public Television, leads its show tonight (Friday; 7 pm and again Sunday 10:30 am or watch it here) with the "Video Competition" bill. The rest of the show featured contaminated firewood from Illinois, invasive species on the Great Lakes, and a commentary regarding the tragedy at Virginia Tech.  A pattern here?

Yesterday Andy Moore called and chatted about the video bill, then asked if I would tape a segment for the show.  I agreed and when asked, suggested Thad Nation of TV4us as an advocate for the  legislation.

A couple hours before the 3 pm taping today, Andy emailed me that the taping would be with Sen. Jeff Plale live in the Milwaukee studio.  OK. Guess I better put on a tie.  I grab my clipping of the April 24 Capital Times editorial with Sen. Plale's picture and the headline: "Foul Smell of Campaign Cash," stuff it into my AB 207/SB 107 key document folder to have with me in the studio.

The taping flashes by, and Sen. Plale, Fred Freyberg and I bat around the bill for a few minutes on TV. Sen. Plale had no tie. I successfully resist waving the clipping after Sen. Plale parried Fred's obligatory question about AT&T contributions and the bill. It was all very civil.  Maybe we explained a few things to the audience; maybe we confused them further. TV4us never came up, so I failed to use "sockpuppet" on television.

At the end, pressed for time, I blurted out the key thing I wanted to say:  the Public Service Commission has expertise already on staff to do real oversight of video services.  The  DFI, which largely handles banking, has no one on staff who could even identify which of the wires on the nearest pole was electric, which was telephone, and which was cable TV.  And that's the point of this bill.

I also wanted to go over details of the real costs of DATCP's authority under the current version of the bill, and argue that state taxpayers will wind up footing over a million dollars of consumer protection once  satellite services are included in their mandate. No time.  Maybe I'll get into it on Public Radio Monday morning 7:30 am-8 am on Joy Cardin's show.

- Barry Orton

Video Competition Bill Improved a Bit More

Yesterday, the Video Competition bill got improved quite a bit in the Assembly Committee on Energy and Utilities.

Today, the Wisconsin Senate Committee on Commerce, Utilities, and Rail added two more significant amendments, both very positive.

The first would grandfather existing PEG channel funding for three years, or the expiration of the current franchise, whichever comes first.  This is a great victory for the continuation of local access operations and a certification of their community importance.   Pressure for this was generated by a genuine grassroots effort - not an expensive "astroturf" ad campaign.

The second amendment updates statute 134.43, which protects cable subscriber privacy rights, to include new video services under state franchise. This includes subscribers' names and addresses, as well as viewing patterns.  This amendment particularly pleases me, since I helped work on the the original bill in 1981, when Rep. Marlin Schneider, always ahead of his time, was its sponsor.  The Leg Council's John Stolzenberg, whose analysis is the roadmap to AB 207/SB 107, also worked on 134.43 with us in 1981, and must be also pleased with this update to his legacy.  (Marlin, John, and I were all somewhere in our late teens back then.)

There are still some big problems with this bill, particularly with the lack of authority for DFI, and the more than million-dollar cost to the state to handle the complaints that the new wild west in consumer video services will be sure to generate.

Looks like floor action next Tuesday, at least in the Assembly.

I'll keep you posted.

- Barry Orton

AB 207 Amended; Worst Aspects Fixed Somewhat

AB 207 passed the Assembly Committee on Energy and Utilities today on a vote of 8-1.  There were a number of amendments introduced by Chairman Montgomery, several of which improved the bill significantly. I'm still reviewing them, but at first glance they:

• Restore franchise fees by keeping advertising and home shopping revenues in the gross revenues base.
• Protect PEG channels somewhat regarding both transmission costs and the programming levels to meet the "substantially utilized" test for a channel.
• Allow the Department of Financial Institutions to engage in limited rulemaking and oversight regarding the qualifications of applicants for a state video franchise.
• Restore the existing set of subscriber rights regarding consumer protection and apply them to video service providers, cable operators and (GASP!) satellite service providers under the Department of Agriculture, Trade, and Consumer Protection. This last addition is a stunner.  I applaud it, but wait until Direct TV finds out.

These last two items will significantly increase the amounts of the fiscal notes outlining the costs of state franchising.  The notes for the state to do almost nothing under the original bill estimate $312,000/yr for DATCP and $219,500/yr for DFI, or slightly over a half milliion dollars. The amended bill, which does require significantly more oversight on the part of these two agencies, would at least double that amount.

Judith Davidoff of the Capital Times details both AT&T's and the cable industry's fingerprints on the bill, which I found when reviewing the drafter's file for AB 207 at the Legislative Reference Bureau.

A legislative drafting memo shows that AT&T and the Wisconsin cable industry had a heavy hand in shaping a controversial video franchising bill before it was introduced to the state Legislature, critics of the bill say....

In a March 21 memo, Mark Kunkel of the Legislative Reference Bureau details the "instructions" he said he received during a Feb. 20 meeting with James Barrett, senior counsel of AT&T Wisconsin; Buddy Julius, director of government affairs at AT&T Wisconsin; Tom Moore, executive director of the Wisconsin Cable Communications Association; and Adam Raschka, aide to Rep. Phil Montgomery, R-Green Bay, the primary author of the bill. John Stolzenberg, chief of research services for the Wisconsin Legislative Council, was also at the meeting; Tara Corvo, an attorney from Washington, D.C., who also represents the cable association, joined the conversation by phone.

Among other instructions, Kunkel noted that he was directed to include a rebuttal to anticipated criticism that the bill would illegally supersede franchise agreements between cities and cable companies. Wisconsin's cities received approximately $31 million in franchise fees in 2004, according to the Department of Revenue.

University of Wisconsin telecommunications Professor Barry Orton, who provided the drafting memo to The Capital Times, said the document shows that the two industries affected by the bill "got together with the drafter and said, Here's what we want.' "

The Wisconsin Cable Communications Association has officially taken a neutral position on the bill, but this memo raises questions about their actual involvement, says Orton and Rich Eggleston, spokesman for the Wisconsin Alliance of Cities.  They are being disingenuous to say they are officially neutral," said Eggleston, a critic of the bill...

Eggleston said his group, which represents cities around the state, was not asked to provide input on the bill.

"If we're not at the table, too often we're on the menu," he said.

- Barry Orton

Update: Forgot to link Mark Pitsch's Wisconsin State Journal story on the drafting memo.  I managed to stay out of that one. Both stories were page one on a huge news day. Rich Eggleston earned his salary this week.

 

Judicial Restraint vs. Activism: The Phony Issue

Paul's Note: I wrote the following post for publication today. On Sunday, the Wisconsin State Journal published Dee Hall's Who's the 'activist' in Supreme Court race?  

The outcome of Tuesday's election to the high court - pitting Madison attorney Linda Clifford against Washington County Circuit Judge Annette Ziegler - will determine whether the court tilts toward liberal activists or conservative activists. (emphasis added)

A 2006 University of Kentucky study looked at decisions reached by members of the U.S. Supreme Court under former Chief Justice William Rehnquist from 1994 to 2005, when there were no changes on the court. The goal was to determine whether the liberals or conservatives were operating as judicial activists by striking down laws or overturning previous court decisions.

The answer? Both.

As the Wisconsin campaign for the Supreme Court winds down, Annette Ziegler embraces judicial restraint while painting her foe, Linda Clifford, as a judicial activist.

The bottom line is this: the debate between judicial activism and judicial restraint is illogical and contradictory. It is nothing more than a sham designed to criticize decisions a court makes that are not pro-business or may respect the constitutional rights of defendants, mostly street criminals (but some corporate executives as well.)

Let us turn to no less than an authority than Rick Esenberg, Shark and Shepard, who has polished off his white paper, A Court Unbound? The Recent Jurisprudence of the Wisconsin Supreme Court.

In this paper, Esenberg kindly provides us with a definition:

Judicial restraint, for our purposes, is the notion that judges ought to base their decisions upon a source of authority that is outside of themselves and their own notions of the just. ..

...Finally, as Justice Scalia points out, judicial restraint (or, in his parlance, "textualism") is not synonymous with "strict construction." He writes that "[a] text should not be construed strictly, and it should not be construed leniently; it should be construed reasonably, to contain all that it fairly means."⁴

Curiously, he never provides us with a definition of judicial activism, except by inference;

Judges who seek to exercise restraint will tend to adopt techniques of construction that confine, rather than expand their discretion. They will be less likely to adopt indeterminate meanings for legal terms or to construe them through the use of multi-part "tests" that can, in any given case, justify any results.

While I disagree with much in his paper, I concur with this observation:

Although our recent judicial history may be comprised largely of "activist" decisions advancing what may be seen as the goals of the political left, there is nothing inherently "liberal" or "conservative" in this view of restraint, as our not so distance past demonstrates.³

I am curious as to what the judicial restrainters would say about corporations defined as persons. The most obvious example from the nineteenth century is a series of decisions where it was ruled that corporations were persons. Nowhere in legislation, prior to the 1890's, did the Congress, in any way, declare that persons included non living and breathing entities.

For a more modern example, we need go no further than the aforementioned hypocrite, Anthony Scalia, who penned the decision in Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992). Scalia decided that the plain meaning of the word 'taking' meant more than 'taking.' That in fact, if government was to rezone property that resulted in diminishing the value of what might be constructed on it, that was a taking. It was not troubling to Scalia that he had violated one hundered years of precedent or that he gave new meaning to the word 'taking.' Or that if he was to determine that if government we to compensate an owner by a rezoning that diminished the value of the land, that perhaps then owners would pay governments when their land increased from a rezoning or change in regulations.

Looong Public Hearing on Video Bill

Yesterday's public hearing of the Wisconsin Assembly Committee on Energy and Utilities and the Wisconsin Senate Committee on Commerce Utilities and Rail on AB 207/SB 107 was an endurance marathon for both the legislators and their staff and for the 150 or so of us who attended to testify or observe or record. About 70 people registered to testify; probably about 50 actually did so since many had to leave as the afternoon wore on.

The AT&T-backed, fast-tracked legislation would create a new, almost entirely unregulated state-level franchise for video service and eliminate the current system of municipal cable franchises. Cable companies and telephone companies would get a state-issued permit to sell wired video anywhere in the state.

I'm against it. Read why here and here and here.

I arrived at the hearing 30 minutes early (9:30 am) and left about 6:00 pm after I testified.  I'd guess there was about 30 minutes more testimony before it ended.  Could've taken even more.  There was no break. The poor staff and legislators ate lunch at the podium and kept on calling witnesses.  They opened two overflow rooms with the audio piped in and it was still SRO until sometime after 4 pm. (Update: it went until 7 pm, a total of 9 hours.)

Cities and their access operations filled the place.  Testimony about the importance of continued local value of municipal fire training, kids TV, educational uses, and community-level video came from Oshkosh, Sun Prairie, Janesville, Milwaukee, Jefferson, Madison, Sturgeon Bay, Wausau, Rice Lake, Merrill, West Allis, the Milwaukee suburbs, and about five more I missed when I left the room from time to time.  The Communications Workers of America, AT&T's largest union, was there in force, as were AT&T's officials, lobbyists, and astroturf groups like TV4US. Video cameras from WISC-TV, WKOW-TV, CityChannel12, WYOU, and  a couple local access operations  Assorted suited folks from the cable industry, other telecom players, WCM, Wisconsin Broadcasters' Assn and a variety of legislative aides taking notes for the boss completed the crowd.

Here's WISC-TV's take from Colin Benedict:

During Tuesday's meeting, there were two major concerns expressed by those who testified. First, the bill would strip consumer protections away from cable customers. Second, it could threaten public access channels.

The most interesting testimony came from Janet Jenkins of the Wisconsin Department of Agriculture, Trade and Consumer Protection, who expressed concerns that AB 207/SB 107  would leave consumers totally unprotected and  the state totally handcuffed to do anything beyond grant a franchise in perpetuity.

From Milwaukee JournalSentinel coverage:

Janet Jenkins, the state's top consumer advocate, said the bill, called the Video Competition Act, would weaken existing standards in a variety of ways. She said, for instance, it would no longer ensure 30-day notice of rate increases to customers.

At the same time, she said, it would end the right to have service repaired within 72 hours and would not require credit be given on consumers' bills when a service interruption of four hours or longer occurs.

"We have significant concerns about the total lack of consumer protections in the legislation," said Jenkins, administrator of the Division of Trade and Consumer Protection.

The Capital Times's David Callender reported that Assembly Speaker Mike Huebsch doesn't see the consumer issues as a problem:

Huebsch said the bill, which was the subject of a daylong standing-room-only hearing before both Assembly and Senate committees on Tuesday, would likely be up for Assembly approval by late April or early May.

He said he believes the bill should be approved quickly and that consumer issues could be resolved later.

If there are abuses, "then I guarantee you that both parties will quickly try and change that. But I don't believe you are going to see the doomsday analysis that some are (predicting) regarding the removal of those protections," Huebsch said.

Wisconsin Public Radio's coverage has audio (of course) here.

The Badger Herald's reporter, Jessi Polsky, actually stuck around long enough to accurately report my oral testimony that this bill will cause a local tax increase:

Barry Orton, professor of telecommunications at the University of Wisconsin, said the bill aims to eliminate local franchises and replace them with a single statewide franchise — in which local governments would not have any authority.

He said passing the bill would result in an increase in taxes to make up for monies formerly made through franchise fees.

Orton said franchise fees — dollars paid by private companies to local governments in exchange for use of public rights-of-way — provide great benefits to the entire community.

“[Franchise fees] pay for services that benefit all citizens, who jointly own local rights of way,” Orton said.

He added passing the bill will result in a decrease of the total amount of income from franchise fees and force many former cable customers to use a satellite product, thereby removing citizens — and income — from the franchise fee base altogether.

“The bill would achieve a 15-25 percent reduction in the franchise fee gross base,” Orton said. “[It] will cause local property taxes to rise.”

Here's my written testimony. Took it out of this already too-long and updated too many times post.

- Barry Orton

Wisconsin Legislature Holds Public Hearing on AT&T's Video Bill

The Wisconsin Assembly Committee on Energy and Utilities and the Wisconsin Senate Committee on Commerce Utilities and Rail are holding a joint public hearing today (Tuesday) on AB/SB 207, the AT&T-backed, fast-tracked legislation that would create a new, almost entirely unregulated state-level franchise for video service and eliminate the current system of municipal cable franchises.  We've bored you with the subject again and again and again.

The hearing is in Room 412 East at 10 am. That's where I'll be until the last high school-aged access producer testifies.  I'll post my testimony later, after it's been capsulized for the hearing and distributed.  I'm told we'll have about three minutes each, so I'll read key sentences from each paragraph of my 2-page statement.

In Saturday's Wisconsin State Journal, Mark Pitsch did a very good job outlining the problems with the bill:

Wisconsin residents would lose their rights to cable television repairs within 72 hours, credit for service interruptions and advance notice of rate increases, under a bill on the fast track in the state Legislature.

The proposal, designed to increase competition in an industry dominated by cable companies, is supported by the lobbying muscle of telecommunications giant AT&T.

It's part of AT&T's challenge to cable companies such as Charter Communications, which are licensed by local governments.

There is little agreement on whether the proposal would help consumers or hurt them.

Local governments worry the so-called "video franchise" bill would lower the payments they get from cable providers up to 30 percent, which they say would mean cutting city services or increasing property taxes to cover the losses, they say.

Opponents also say the bill would mean less money for low-budget public-access channels.

One part of the story leaped out at me:

Cities that negotiate licensing agreements with cable companies don't have a reason to negotiate lower rates because they get a portion of revenues, Montgomery said.

"What incentive has there been on the city's behalf to hold down rates? None. That's their cash cow," he said.

Surely Representative Montgomery, the prime sponsor of AB 207 and the Chair of the Assembly Committee on Energy and Utilities, knows that cities are prohibited by federal law from being able to "negotiate lower rates."   If he doesn't know, he should, since one of the basic assumptions behind his thinking is wrong. If he does know, maybe he was misquoted; Rep. Montgomery wouldn't be distorting the facts to fit his arguments.

Aside from all the nonsense about consumers saving money, the most outrageous parts of the bill are:

     1. The placement of regulation in the Dept. of Financial Institutions (DFI)  with specific language that prohibits the DFI from enforcing or interpreting the law, or reviewing the qualifications of applicants, or reviewing new owners of franchises. Under AB/SB 207, the DFI could issue a statewide franchise, file it in a cabinet, and do almost nothing else. It's a particularly egregious case of legislative chutzpah (look it up) that would result in video services being not deregulated, but unregulated. Senior legislative staff have told me this level of handcuffing of a state agency has never been tried before.

    2. Eliminating consumers' rights to get rebates if the service goes out, get 30 days notice if the rates go up or services get dropped, and get 10 days notice when they are disconnected for non- payment, and only after being 45 days late paying.  That's all in State Statues 100.209 and the bill eliminates it all.  Those subscriber rights were enacted in 1991 with support of the cable industry.  If this passes, cable and phone/video customers would have no rights other than take providers to court and sue them.

- Barry Orton

Is Charlie Sykes Right, Again?

Last  week Charlie Sykes ventured:

ROOTING FOR AIR AMERICA (SERIOUSLY)

The great liberal hope, Air America, declared bankruptcy last week...
...And that’s bad news for conservatives like me...

... But the long term implications are ominous: because I fully expect that once they are in power again, Democrats will try to bring back the so-called “Fairness Doctrine,” a misnomer if there ever was one...

...The only thing that will prevent the Democrats from an assault on the airwaves would be if they had their own stake. If Air America collapses, they won’t have a dog in the hunt. (emphasis added)

Implicit in Sykes' analysis is the suggestion, that at least in this instance, a legislative solution is constructed out of political necessity more than ideological fervor.

Since the onset of the bitter partisanship that plagued legislative bodies starting in the 1980s, liberals and conservatives have a tendency to 'forum shop' as majorities shift. They move the action to the legislative body where they have a majority.

Some examples:

• States have weak gun control laws; liberals decry conservative attempts to pre-empt strong municipal gun control laws.
• When conservatives control the Congress, they wish to pre-empt tough state insurance regulations.
• When conservatives have control of most state houses, but not the Congress, they suggest that it is best to leave environmental controls in the hands of the state legislatures.
• Where conservatives have control of the state legislatures, and not the large urban areas, they wish to pre-empt municipal smoking bans.
• Both parties move back and forth on abortion legislation, depending upon who controls Washington D. C.
• When liberals control the city councils, but not the state house, they argue for local control on smoking bans.

There is a reason we have local and state governments as well as a federal government.

In recent years, both parties have shown opportunism and hypocrisy when arguing for the appropriate level of government to enact legislation.  As majorities shift with next month's elections, it will be interesting to watch the forums change, again.