Wisconsin Cable Regulation Back In Play

State-level cable TV regulation is back as a legislative issue. Representative Gary Hebl (D-Sun Prairie),  is gathering co-sponsors for a bill that would fix several of the major problems of 2007's Act 42, which deregulated the industry from local control and gave wired video providers perpetual franchises with no significant state oversight.

Jason Stein has the story on the front page in Sunday's Wisconsin State Journal. I like the on-line headline, "Price promises of backers of cable bill fall flat," much better than the print head, "Some prices higher under cable TV competition law." In either case, the story's focus is on a 2009 University of Minnesota Humphrey Center report, which found that cable rates in Wisconsin and most everywhere else went up significantly in the last few years rather than falling, even after the "competition" induced by state deregulation.

When interests such as AT&T pushed for a bill in 2007 to open up more competition in the cable television market, the proposal's supporters promised consumers would "see cost savings almost immediately."

Nearly two years after an intense lobbying effort helped push the controversial video competition bill through the Legislature, those lower cable prices haven't materialized. A recent study found prices for expanded basic cable increased nearly 28 percent from late 2006 to early 2009. Madison-area provider Charter Communications has said it will raise rates on its lower-tier cable-only customers by $3 in December.

"It was a form of puffery and everyone knows it," Barry Orton, a UW-Madison telecommunications professor who formerly did consulting work for cities opposed to the law, said of the predictions of lower prices. "And those rates prove it."

Back when the 2007 bill was partial-vetoed into law, the Milwaukee Journal Sentinel encapsulated the key issues:

Legislators who fought the bill said Doyle's vetoes improved it but predicted that rural areas will not be helped by competition and new telecommunications products.

"People in many areas of the state won't see any competition . . . because companies such as AT&T have no plans to provide service beyond their existing service footprint, which covers less than half of the state," Rep. Gary Hebl (D-Sun Prairie) said in a statement.

Thad Nation, executive director of TV4US Wisconsin, which ran hundreds of TV ads statewide pushing the bill, predicted that "prices will fall, services will improve and companies will have incentives and bring consumers new, exciting technologies." (emphasis Waxing America)

So Stein now reports "A recent study found prices for expanded basic cable in Wisconsin rose between December 2006 and February 2009, in spite of a December 2007 law to promote competition among video providers."  Cable prices rose how much? Only 27.6% over the slightly more than two years, when the new law was going to lower them according to all the bill's sponsors.

Stein reports Hebl's draft bill would:

• Require cable outages to be repaired within 24 hours instead of 72.

• Allow all municipalities to charge up to 1 percent of video companies' revenues to pay for public access channels - not just the roughly 30 municipalities that currently collect such fees from cable companies.

• Require cable providers to give public access stations a prominent channel on the dial rather than one at the end of it.

• Require a renewal of currently permanent state cable franchises every five years and transfer the authority to award them from the Department of Financial Institutions to the Public Service Commission, which regulates utilities.

You thought Waxing America was safe from this topic at last?  Too bad; there's more to come, as this bill gains additional sponsors, and AT&T and the cable industry push back against it with their formidable resources. For now, what the Cap Times editorialized in 2007, just before the Wisconsin Senate voted to pass cable deregulation, still holds, with a little updating:

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

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

Residents should be hopping mad.

- Barry Orton

Comments

[Jon]

Thanks for writing the truth Barry. It's unfortunate that so many people will remain ignorant of the truth, but you did your part to educate them.

My pet peeve is the media continuing to refer to the 2007 law as a "cable competition law." In really, prior to this law, there was NOTHING preventing AT&T, or any other company, from competing with cable. All the law did was make it easier and cheaper for AT&T to get into the business by taking regulation and revenue away from local governments. They got a slightly larger profit and you, the consumer, got screwed. Enjoy!

[R.J.]

You have my blessing. I got no problem with screwing Charter at every turn.

[mgm]

I am shocked, shocked that cable rates rose when the industry said they would fall. Sort of like the legislature saying insurance rates would fall by having mandatory auto insurance.