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Lobbyists are capitalizing on consumer passion to push through a complex telecom bill that's full of bad ideas

We want our #&% TV! 

Lobbyists are capitalizing on consumer passion to push through a complex telecom bill that's full of bad ideas

click to enlarge ae-lead.tv.jpg

What do you do when the phone goes out? Pick up your cell, maybe, or head down the street to the neighbor's, or get online. But when cable goes out? Perhaps you keep your cool, gentle reader, but most people lose it when a screen full of snow interrupts American Idol.

North Carolinians watch an average of three hours of TV each day, according to Connie Ledoux Book, associate professor of communications at Elon University, who studies people's TV habits. That's less than the national average of 5.2 hours a day (thanks to our good weather), but it's still a huge part of our lives. "Besides work and sleep there's nothing we do more than watch TV," Book says. "People are passionate about TV." She believes that both the state and the industry is unprepared to deal with that passion.

A massive policy change in the way TV service is regulated is making its way through the North Carolina General Assembly this summer, masquerading as a tax and budget bill. A committee of the House of Representatives is considering Video Service Competition Act (H 2047), a bill that would create statewide franchise agreements for video service, replacing the existing local agreements that currently govern cable TV service. The Senate is considering similar legislation with the same title (S 1559). The stated purpose is to encourage competition in the TV marketplace. While new companies can compete now, most chose not to, saying it is onerous to negotiate with each city or county government in the state (though local governments say they haven't tried).

Both bills have proven laborious to hash out, and public interest advocates are urging the legislature to spend more time getting them right. But thanks to lobbying from telephone companies, especially Verizon and BellSouth, it looks as though both versions will reach the floor soon.

The details of telecom legislation like this are wonky, complicated and jargon-filled. But that hasn't dampened the passions of citizens fed up with the de facto monopoly of TimeWarner, with its astronomical rates for "packages" of unwatched channels. Dozens of people from across the state showed up to a meeting in April of the House Revenue Laws Study Committee wearing T-shirts for FreedomWorks, a group clamoring for the proposed state franchises. FreedomWorks, which is connected with the anti-tax conservative group Citizens for a Sound Economy, is funded by telephone companies pushing for the bill--what you might call an Astroturf (phony grassroots) organization, but the passion of its members is very real.

"They want choice in their television," says Chad Johnston of the People's Channel, Chapel Hill's public access station. Johnston is part of a contingent of citizens who oppose the bill for its lack of consumer protections. His frequent trips to the Legislative Office Building for finance committee hearings have been relatively successful in urging legislators to add funding and protection for public channels and the services they provide. But he says all the passion around TV service is being used to mislead the bill's supporters. "It's funny, because many of the comments that the FreedomWorks folks brought up in this meeting were things that aren't even included in this bill, like being able to chose your channel lineup--that's a whole different issue," Johnston says. "This notion that it's going to bring us gobs of choices and lower prices it totally false, based on everything we know about deregulation and the telecom industry."

How will those same citizens react if this bill does not deliver on its promise of cable choice? Competition is not guaranteed. The biggest sticking point in committee work on the state franchises is build-out, the requirement that companies offering video service offer it to all neighborhoods, not just the ones that will make them the most money. The phone companies say they promise to build out, but the bills include no real enforcement protections--in fact, they would lock the state into 60-year contracts with no renegotiation opportunities.

"If you're noncompliant in any area of this contract, the only consequence you may suffer is a $250 a day fine, and that's nothing to them," says Book, who has recommended to legislators that they establish a "re-opener" clause in the legislation.

Eugene Weeks is an African-American community leader in Southeast Raleigh who supports the bill but wants more than a promise that neighborhoods like his won't be left behind--again. "We were one of the last areas to get cable," Weeks says, "and even when they were upgrading their system in the '90s, we were one of the last." Weeks has no love for cable companies, and based on his experience with customer service he thinks the phone companies will do a much better job of serving his neighborhood. "I'm not saying the price is going to go down that much," he says, "but I think I should have a choice."

To address the "cherry-picking" issue, the bill includes language that would prevent discrimination based on race or income. Weeks applauds that step, but it's not enough on its own. "They should have something in there to have a follow-up to make sure that it's done. If you don't have a check and balance in there, you don't know what's going to happen."

So if residents in Weeks' neighborhood think they're being discriminated against, what happens to their complaint? On Tuesday, the House Finance Committee voted down an amendment that would have allowed the courts to revoke a company's franchise if it was found to discriminate against minority or low-income neighborhoods. As it stands, there are essentially no consequences.

Another question looms: What about the massive overhaul in customer service this bill would enact? Under the current franchising system, a cable customer who's dissatisfied with the company's customer service can appeal to a local government official. There are more than 50 city and county employees administrating cable franchises in this state, and they spend most of their time fielding complaints. Under the new legislation, those calls would all go to the North Carolina Attorney General's office. In the committee meeting Tuesday, Rep. Deborah Ross of Wake County expressed concerns that the AG's office doesn't have the staff to deal with customer service complaints. "There are going to be thousands and thousands of people who don't have what they need when they need it." Unless the bill anticipates their needs, Ross says, "They're going to be calling us!"

While most committee members urged passage of the bill, saying it represents a consensus among all interested parties ("This is the best bill we have ever written," Rep. Becky Carney said in a recent meeting), public interest advocates say they've never been able to sit at the table with legislators and phone company reps to work through the many complex issues. Representatives from the N.C. League of Municipalities, the North Carolina Justice Center, the AARP and the NAACP are among those trying to improve consumer protections.

While the state franchise legislation does include some provisions for public access, educational and government (aka PEG) channels, there are some serious problems with those parts of the bill. For one, it also limits the number of hours of digital or bulletin board programming on PEG channels. Johnston says that makes no sense. Startup channels in particular, such as the government channel just established in Orange County, don't yet have the resources to produce seven hours of programming per day. "We get calls about our bulletin board all the time," Johnston says. "People actually watch those things. [The cable companies] don't dictate content on other channels; why they should dictate content on public channels is beyond me."

PEG channels are not the only public services that local governments have been able to negotiate from cable companies. Local franchise agreements have produced institutional networks, or I-nets, which have become essential infrastructure. In Greensboro, for instance, the I-net runs street lights, water monitoring systems, Internet for the public schools and even some telephone service. Those existing systems would no longer be part of the package under the proposed state franchise system once a phone company comes in to compete. In Greensboro, that means a $2 million cost annually to taxpayers.

click to enlarge Connie Ledoux Book of Elon University - PHOTO COURTESY OF ELON UNIVERSITY'S DEPARTMENT OF COMMUNICATIONS
  • Photo courtesy of Elon University's Department of Communications
  • Connie Ledoux Book of Elon University
That's just one of many issues Book says legislators have not thought through. "I hope they realize there's no urgency to this bill," she says. "The legislators keep talking about how hard the staff has worked. I keep telling them, 'Yeah, it is a lot of work, and you've just scratched the surface.'"

In the end, all of this--the state franchise legislation and the existing local agreements--could be overridden by national telecom legislation as soon as this year. Two pieces of legislation in the U.S. Congress, the Communications Opportunity, Promotion, and Enhancement (COPE) Act of 2006 (HR 5252) and the Communications, Consumer's Choice, and Broadband Deployment Act of 2006 (S 2686), would create national video franchises--imagine all the problems stated above and multiply them by 50. Most observers believe that neither of those bills will pass this year, however.

Even if they do, Book predicts the wheel will turn 'round again, once state and federal government and the telephone companies get a taste of people's passion for TV. "I think we're going to come back again in 10 years and redo it back to local," she says. Like Ross, she predicts governments are getting in over their heads. "They can't handle it!"

  • Lobbyists are capitalizing on consumer passion to push through a complex telecom bill that's full of bad ideas

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