AT&T Bill Rammed Through Wisconsin Assembly; Senate Follows the Law and Refers Bill to Joint Finance

In a marathon session yesterday, the Republican-controlled Wisconsin Assembly defeated over two dozen Democratic-sponsored amendments on party-line votes and passed AT&T's "video competition" bill, AB 207.  The Senate, on the other hand, followed state law and referred SB 107, its version of the bill, to the Joint Finance Committee for consideration of the costs to the taxpayers of Wisconsin.

Scott Bauer, writing for the AP, focused on the cost to the state:

... Majority Leader Judy Robson, D-Beloit, said a Joint Finance Committee review was needed to see what impact the bill would have on the state's $58 billion budget. Cost estimates have ranged from nothing to more than $600,000, she said.

Rules require any bill costing more than $10,000 to go through the committee, Robson said.

Under the bill, the state Department of Financial Institutions would license video service providers while another agency, the state Department of Agriculture, Trade and Consumer Protection, would handle consumer calls and complaints.

The bill also would extend consumer protections to satellite TV for the first time.

Barry Orton, a University of Wisconsin-Madison telecommunications professor and consultant to local governments, said he estimates the change would cost the state at least $1 million.

Orton said slowing down consideration of the bill to understand its costs only makes sense.

"The state has to take into account the cost to taxpayers," he said. "The budget implications can't be ignored."

A Republican member of the Assembly, Leah Vukmir of Wauwatosa, disagreed, blogging at the Milwaukee Journal Sentinel that:

The bill did not need further review by JFC. AB207 had already gone through the committee process where, after a long public hearing and a great deal of compromise, it was voted out of the Assembly Committee on Energy and Utilities on a vote of 9-1. In the Senate, the companion legislation, SB 107, passed on a vote of 7-0.

The hard work for any bill gets done at the committee level and Rep. Phil Montgomery (R-Green Bay) and Sen. Jeff Plale (D-South Milwaukee) did their level best to ensure the process was fair and thorough. This bipartisan bill was ready for passage when it came to the floor today.

Sure it was, except for the small matter of the Legislature's rules requiring the costs to Wisconsin taxpayers to be considered by Joint Finance, except for the inability of municipalities, access operations and the public to be in the room when the bill's language was written, and except for the bill's critics being browbeaten at every opportunity by Rep. Montgomery at the only public hearing.

Rep. Vukmir's posts on this subject took a further turn away from reality when she wrote:

As I’ve watched the debate on video franchising, all parties – save for the municipalities (emphasis mine) have acted in good-faith, committed to the competition and benefits to the consumer. Time Warner, AT&T and a variety of other providers are poised to compete not just at price points, but on customer service as well.

Sure, those municipalities, frozen out of the bill drafting, acted in bad faith. But then Rep. Vukmir wandered closer to the truth:

A wise and rightly cynical public may be wondering what all of the fuss is about. Who are these TV4US people and are they really on my side? The answer: yes, and no. AT&T and other telephone companies want to actively compete with the cable companies who are now offering digital telephone service to subscribers. The phone companies want to make money and that is the driving force behind this push. (emphasis mine)

(This blogging stuff is new to Rep. Vukmir; looks like her staff forgot to have the AT&T flacks edit this paragraph - or maybe they were all busy working the Capitol.  You couldn't throw a Nerf ball under the dome without hitting an AT&T or cable company lobbyist the last couple of days.)

The Capital Times yesterday had a good editorial on AT&T, their money, and this bill:

The legislation is an indefensible mess. It was written to serve the interests of the industries that are supposed to be regulated rather than Wisconsin consumers and communities. While there is no question that arguments can be made for changes in the way cable operations are regulated, this is the wrong plan at the wrong time.

Indeed, it is so wrong that supporters have been forced to pour a fortune into an advertising campaign designed to make Wisconsinites think they are getting a better deal -- when in fact Plale's plan makes it harder for citizens and municipalities to hold communications firms to account.

...Everything about this proposed legislation smells rotten.

But the stench that would rise from the Capitol if members who were recently lavished with AT&T money voted in favor of the company's top legislative priority would be even more foul.

- Barry Orton

Comments

[Publius]

Because the municipalities are the only actors in this drama who have altruistic motives?

Be honest, Orton. Everyone in this is out to make money - especially the municipalities. They lashed out because they saw that the gravy train was about to be cut off.

And do you honestly believe that when people have service issues, they call town hall and not the cable provider?

How can I get an address in Fantasyland?

[Barry Orton]

Ask any Village clerk if they get calls about cable problems. When people have service problems, they first call the provider, and then, when they can't get through or don't get satisfaction, they complain to Village Hall. It's not my belief, it a fact.

Fantasyland is that place where "marketplace forces" somehow save consumers millions when the legislature allows an additional provider to resell the same overpriced ESPN at similar prices.

Fantasyland is where "TV4us" can buy millions of dollars of advertising and pretend it is a grassroots consumer organization instead of an AT&T corporate sock puppet.

And it's where legislators can take AT&T's money and claim that the process was "fair and thorough' and that the money had no influence on their votes.

Sounds as if you are already there, "Publius."

[John Foust]

There's more than a few fantasies in this bill... Its proponents claim monopolies exist, then talk about satellite - a simple alternative available in every city and rural burg. It's already arguably cheaper than wired services. They talk about monopolies, but there's no exclusivity in any of the existing franchise cities. Anyone is free to enter the market - just ask for a franchise.

They whined about the effort involved in negotiating franchise agreements, but ignore the reality that each contract is 99% similar to the last, they're renewed only every decade or so in most places, and that cities are required to offer the same terms to every comer. They whined about having to do this in 1,850 cities/towns/villages in Wisconsin, but ignored the reality that there are only 300 franchises in the state now, and that signing a dozen would cover most of the market.

Yes, cities love franchise revenue. It's effectively a local tax paid by consumers who buy services delivered on wires in the public right-of-way. The rate was set by your local elected officials. Go talk to them. They are perfectly free to reduce it to zero percent. For all the talk about this money, the bill doesn't touch this tax. If it had, the cities would've really screamed.

Instead, the cities screamed the loudest about the bill's elimination of local control over the placement of equipment in the right-of-way. If three video providers wanted to put fridge-sized boxes on the grass between your front lawn and the street, neither you, City Hall or Madison could do anything about it.

The bill does prohibit separate public access (PEG) fees, though. The bill has a half-dozen loopholes to let new providers never carry existing PEG channels. Proponents of the bill must not see any value in PEG channels. There's no value in an informed electorate?

[Laura Unger]

You might want to check out some of the particulars of the NY State "Omnibus Telecommunications Reform Act of 2007 (A.3980A)." It allows statewide cable franchising but has these protections:

Guarantees that local governments receive the maximum 5% share of cable television gross revenues allowed by the FCC as a condition of a statewide video franchise.

Protects, enhances and creates new Public, Educational and Governmental (PEG) cable channels. These are the Public Access Channels which localities make available to community organizations for public interest use. A.3980A also protects and increases funding from cable TV revenues for the PEG channels, even above the 5% FCC maximum municipalities can receive from general revenues from the statewide franchise.

Preserves municipal control over rights of way and other police powers.

It also requires the extensive build-out of high-speed internet as a condition of a statewide cable franchise.

I think this can be a real model for other states. There is currently some discussion going on about this bill at http://www.thealbanyproject.com/showDiary.do?diaryId=715

[Lynn Mellenthin]

Are the PEG channels really important to very many viewers. I wonder what the usage rate is. I suspect it's extremely low. I suspect it's mainly important to a very small number of people. Yet everyone else is required to pay for it. Couldn't some way be figured to only have the cost be born by those that want it. It seems to be such a big issue in this debate. It's the classic case of " I want something and I want you to pay for it" - Unfortunately this is the American way of things and everyone shares some of the blame. Give me cable TV but put that big cable distribution box in my neighbors yard not mine.