OPINION & EDITORIAL
State cable bill phoned in by AT&T
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by Adi Lev-er
Wednesday, November 7, 2007
The state Senate will vote on a bill tomorrow that would
deregulate the cable industry in Wisconsin. Currently, local municipalities are
in control of the industry; they grant the necessary franchise contracts to
cable companies. The proposed bill would transfer that control over to the
state. Instead of relying on the local government to consider each cable
company individually and set up a contract, the state would create a standard
by which companies would be granted franchises.
The proponents of this bill make a convincing argument.
State control of cable would allow any company that pays $2,000 to receive a
permanent franchise, thus creating competition within the industry.
Competition, as we all learned from famous economist Adam Smith in Econ 101, should
drive down cable prices for consumers.
Unfortunately, the issue is not that simple. Similar bills
have been passed in other states and the results have not been consistently
positive. Research conducted in Texas showed that after two years of the state
regulating cable franchising, prices did not fall.
Why aren't Adam Smith's ideas holding up in this
circumstance? The answer is that under this model, a single company is usually
manufacturing competition in order to create profits as opposed to opening up
the market for natural competition. As an example, in Wisconsin, AT&T has
given money to 15 lobbyists in order to get this bill passed.
Members of the telecommunications industry as well as the
Legislature are presenting this bill as a win for consumers — finally, a choice
for cable TV. But in reality, it is one company's not-so-subtle campaign to
increase profits. Certainly lobbyists have played a large role regarding
legislation for or against their interests in the past, but do we really want
our government making decisions based on a private company's bottom line?
This issue is about more than television. The constituents
of this state are being pushed aside in favor of AT&T, a company with a
record of paying a great deal of money to Wisconsin political parties to ensure
that its interests are met. Not only are Wisconsin residents being misled about
the proposal's impact on their cable bills, but politicians are also promising
them the same level of service they receive today. In reality, cable companies
would be under much more lenient regulations.
On top of that, the proposed bill shows a general disregard
for consumer protection. It would eliminate certain standards, such as those
requiring companies to notify consumers of a rate increase with 30 days'
notice. Also, customers today are credited when a service interruption lasts
more than four hours. Under the proposed bill, the limit would be raised to 24
hours without service. Consumers' rights will be severely limited if this bill
is allowed to pass.
Another aspect that would suffer because of this bill is
local programming. Under the current system, cable companies are required to
pay a certain amount of money to local governments in order to maintain their
franchises. This money is used to fund local channels. The new bill will limit
the amount that companies pay to local municipalities to 5 percent of their
revenue. Local programming that currently relies on revenues beyond 5 percent
will consequently have its business put in jeopardy. Contracts that currently
promise payment of greater fees will only be required to continue these
payments for a maximum of three years. Therefore, local networks will be shut
down if they are unable to find an alternative source of funding.
We rely on our representatives to address the people's
interests. When a private company dictates the passage of a bill, whose
interests are really being represented?
Lobbyists have been a part of our political system for years, and money has continually been thrown around in order to sway votes. But in a case as obvious as this, when AT&T clearly funded this bill from its inception in order to reap profits, our representatives should at least feign a certain level of morality and vote down the bill.
Adi Lev-Er (alever@wisc.edu) is a freshman majoring in journalism
and communication arts.
Anonymous (November 7, 2007 @ 8:38am):
Good analysis. Competition in an infrastructure-based service like telecommunications where consumers have many choices isn't possible due to the high costs of entry -- e.g. building the infrastructure.
Anonymous (November 7, 2007 @ 10:07am):
this article couldn't be more on point...i spent last spring working for a politician at the capitol and did a considerable amount of research on this bill. A red flag should come up to anybody who considers this bill and then notices that CHARTER DOESN'T OPPOSE IT! They KNOW it'll lower standards and accountability.
Anonymous (November 7, 2007 @ 10:30am):
@ 8.38
wrong, using T2lp and other technology European countries like France and England have been able to surpass America in Cable internet and tv services. The way the work out the system is thru multi-casting, the government owns the cable lines and allows multiple companies to use the same connection. Go look at Israel for a perfect example of how to do this. With over 20 ISPs using the same cables with a avg speed of 5-7 Mbits for about 20 USD a month.
Anonymous (November 7, 2007 @ 1:01pm):
They'll be voting on it tomorrow at the Capitol. See www.saveaccesswisconsin.org for another view of the story. Send an email to your Senator.
Anonymous (November 8, 2007 @ 8:39am):
I like the functionality portion of the bill, but would certainly like to know what can be done to make it more consumer friendly.
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