AT&T's "Video Competition" Bill Still Fundamentally Flawed

This is the week that AT&T expects to push its "video franchise reform" bill through the greased Wisconsin Legislature.  If you doubted that this is AT&T's bill, Sunday's Milwaukee Journal Sentinel had the story:

Communications giant AT&T pushed a controversial bill to have state government license cable systems by showering more than $54,000 in campaign cash on dozens of lawmakers and Gov. Jim Doyle over the past 15 months.

Campaign-finance records show that AT&T's political action committee gave a total of $10,000 to four legislators and the Assembly Republican Campaign Committee in the past two months, when legislators negotiated details of the complex package with AT&T's 15 registered lobbyists.

While I've praised the improvements that Assembly and Senate committees made last week, the bill is still fundamentally flawed in several ways:

Consumers will not save the amounts AT&T sock-puppet "TV4us" claims.  Price wars will be short-lived, and both cable and phone video providers will raise rates regularly after that. Here's a Washington Post story on what happened to rates in Montgomery County.

The bill prohibits the Department of Financial Institutions (DFI) from enforcing any of the bill’s requirements. If a state agency charged with oversight of an industry cannot promulgate rules interpreting the bill’s provisions, cannot establish procedures for enforcing its requirements, and cannot meaningfully review the performance of its franchisees, it truly can be said to be powerless.  The DFI could issue a franchise, file it in a cabinet in perpetuity, and little else.  The Public Service Commission is the place to oversee state video franchises; the DFI is the place to NOT oversee them.

Despite improvements, local public, education, and government (PEG) channels will still be hurt. Specifically, the bill's current version will cause Ashwaubenon, Sheboygan, Stevens Point, and West Allis to lose their PEG funding immediately and Wausau after only one year. 

Wisconsin taxpayers will wind up paying the cost of the minimal state oversight the bill allows.  Fiscal notes estimated over a half-million dollars each year in GPR costs for DFI and DATCP to perform the miniscule oversight the original bill called for.  Last week's amendments restored some consumer protection functions at DATCP, added satellite dishes, and added some new franchise qualification analysis for DFI. A reasonable guess would be that honest new fiscal notes would at least double taxpayers' burden to over a million dollars yearly. Will there be new notes attached to the bill by Tuesday's floor action?  Will Joint Finance get a chance to weigh in? I doubt it.

There are a lot of other problems remaining with the bill, with the biggest the abrogation of existing contracts between cable companies and muncipalities before there is real competition.  We can expect only AT&T and others only to provide service to  a small portion of the state for the next few years, and probably never to large areas of of more rural Wisconsin.  So why remove subscriber protections in places that may never see an alternate wired video service?

At the least, oversight needs to be relocated to the PSC and the Joint Finance Committee needs to review updated fiscal notes on the cost to Wisconsin taxpayers.

AB207/SB 107 isn't soup yet.  Don't let AT&T and its money convince you otherwise.

- Barry Orton

Comments

[Alex Pope]

Hey Barry, when are you going to disclose to your readers that you are a consultant to municipalities on cable franchises and with this bill, you "other work" (when the taxpayers aren't paying your UW salary) is all going away? Shouldn't all your criticism be viewed through a filter of who is paying you? You aren't exactly a disinterested party yourself.

[Barry Orton]

I never claimed disinterest. Anyone with the Google could find out that I've been representing municipal cable franchise authorities and protecting the interests of subscribers and the public for over 25 years. On this bill, I've been working with the Wisconsin Alliance of Cities, the League of Wisconsin Municipalities, and the Wisconsin Association of PEG Channels. I never work for cable companies or phone companies. Anything I post, or testify to, or say in the media should be viewed in that light.

[John Foust]

Alex Pope - Orton's bias is hidden in plain sight. Maybe you can redirect your energy to Astroturf groups like TV4US, and ask them to explain in detail who created and funded their "grass-roots, non-profit" organization, and how they managed to afford all those television ads, print ads and postcards. Do you think it was from donations from all those people who were told they'd save $90 a year on their $1200 a year cable bill?

If I was part of the administration of any Wisconsin city, I'd be most concerned about the loss of local oversight of the public right-of-way. The bill eliminates City Hall's control over what equipment goes where. Would you like a closet-sized AT&T fiber box on the street in front of your house?

There's also potential financial liabilities associated with the way the bill nullifies existing franchise contracts. In my pop. 7,500 city of Jefferson, Charter loaned the city $30,000 to launch our PEG channels. It's being slowly repaid by subscribers. Does the City become liable for the debt if the franchise is nullified?

[Alex Pope]

That's my problem - I googled him and just saw that he represents municipalities after reading comments in the paper and on this site for months that only list him as a college prof. Every time TV4US is written about, they are listed as a AT&T funded organization. I know who is paying them, hell, AT&T is even listed on their national website. Until now, I didn't know Barry was getting paid too. Transparency should be transparency for all sides.

[Barry Orton]

Alex,

If you didn't know I was a municipal consultant, you might be the only one. Nearly every time I'm identified in the press it's as a veteran municipal consultant on cable television as well as a UW professor. My bio is on my website, and the site has numerous references to my role as a consultant to local telecommunications regulators. The major portion of my career has been doing this work. What's the mystery?

[Publius]

Barry - why not just disclose it right off the bat? The onus is on us to discern your biases, especially when you opine as frequently as you do?

[Madison Realist]

Prof. Orton's concern for customers is ironic given that both his full-time job at UW and his many consulting gigs are all paid for by the Wisconsin taxpayers.

So in essence, the taxpayers are paying Barry Orton to lobby for policies that will cause them to pay more for video services that have no local competition.

Anything to keep those consulting checks coming the professor's way, I guess.