State Wide TV Franchising Not Living Up To Lobbyists' Promises
from the lobbyists-inaccurate? dept
I'll be the first to admit that I actually agreed with the stance of telcos a few years back that local "franchising" rules were a problem. If you don't know, for a long time, if you wanted to offer cable-based television in a market, you had to get a "franchise" agreement from a local (town/city/region) authority. For many years, this meant a single cable company offering service with absolutely no competition. When the telcos came along with plans to offer television over fiber or DSL lines, they realized (accurately) that having to get approval in every tiny region would be cost prohibitive. This was all absolutely true, and it was also true that it was silly and unproductive for telcos to have to get so many different approvals and abide by so many different rules just to finally give the cable companies some serious competition in markets.The telcos were successful in making their case, but, of course, these things never happen without a catch. Various states wiped out local franchises, and put in state-wide franchises... but, in doing so, the telcos were often able to dictate the terms of the state-wide franchise rights, making them quite friendly to the telcos, but not so friendly to others or to actual consumers. Apparently, states are now realizing that the promises given to them by telco lobbyists haven't been shown to be true. The insistence that statewide franchising would lead to lower prices for TV service, for example, hasn't been validated at all.
I recently got to hear first hand how the statewide franchise law in California is leading to serious problems for some really amazing local municipal and school networks, which will now get shut down, since the statewide law doesn't require it, as the local franchise rule did. I'm not convinced that the answer is to return to local franchising, which still seems like a process that is too convoluted for innovation. Perhaps the real answer is that none of this will matter eventually, once television all runs through your browser, anyway...
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Filed Under: franchising, lobbying, telcos, video
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Re: cable and broadband
The industry is currently migrating analog content to the digital tier to address the bandwidth scarcity you mention. By moving to digital delivery, and on demand delivery of channels, we'll free a great deal of bandwidth on our networks.
We'll have to disagree on the user-generated video point, though. I enjoy shows like Burn Notice, Entourage and Californication way too much to give up quality programming in favor of someone's YouTube stream. I enjoy watching user-generated content when it's very well done, but frankly, most of it isn't.
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Re: Re: cable and broadband
No one is stopping them from creating those shows. If they want to create those shows and if you want to fund them by watching them that's fine. But that's not to say they should restrict anyone's ability to create their own show. Unless you are worried that if everyone starts making their own show people will stop watching your show and hence will stop funding it. In other words you want to force people who want to watch content to fund/subsidize content you want to watch by taking away their ability to create and watch whatever content they want if it competes with the content you want. NO, society has no obligation to fund the content you want by giving it a monopoly, the content you want should have to compete with anyone else's content weather you like it or not. You are free to fund the content you want and to pay what you want for it and if it's too expensive to produce because the rest of the population doesn't want to subsidize you by giving your content a monopoly then tough. Besides, most content now a days is nothing but commercials and all these really really cheap to produce reality shows to begin with.
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Re: Re: Re: cable and broadband
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Also, they are not "our cable lines". CATV infrastructure belongs to the cable companies. It was bought and paid for by private money. They do not have a true monopoly, but more of a natural monopoly based on the upfront cost and negligible returns gained by overbuilding cable plant.
This is why you rarely see cable companies competing head to head, except in a few select areas that are new builds. Local franchise agreements would appear to have extended these natural monopolies, however that really isn't true. There simply wasn't a desire to compete head to head between cable companies because it just does not make financial sense.
At any rate, the real issue with the state-wide franchise is giving too much power to telcos as well as losing some long held local benefits as mentioned in the articles, like free cable to the classroom as well as community (public) access tv. These all go away due to the state-wide franchise rules.
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First of all, even if it is their infrastructure, they have no right to prevent competitors from building new infrastructure.
"It was bought and paid for by private money."
Do you have any evidence of this?
The fact is that a lot of the CATv infrastructure was funded by government, often local governments, but still funded by government.
"The existing infrastructure was built with taxpayer money and should be equally accessible to all service providers."
http://www.merit.edu/mail.archives/nanog/2005-11/msg00467.html
"The BVU Board approved $500,000 to bring "on-demand" movies to existing customers obtained by over building existing private-sector infrastructure. By using the power of government and tax dollars, they offered subsidized CATV. "
http://www.sullivan-county.com/id3/bvu_movies.htm
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You mean the cable companies do not desire anyone to compete against them because they can extract more money from customers if there is no competition so they lobby the government to disallow competition. Of course competition makes no sense if you're the monopolist, but it makes perfect sense to consumers and for improving aggregate output.
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Yes... but also with gov't grants rights of way...
They do not have a true monopoly, but more of a natural monopoly based on the upfront cost and negligible returns gained by overbuilding cable plant.
In which case there's a strong argument for requiring competition on the network, rather than between networks.
At any rate, the real issue with the state-wide franchise is giving too much power to telcos as well as losing some long held local benefits as mentioned in the articles, like free cable to the classroom as well as community (public) access tv. These all go away due to the state-wide franchise rules.
Yeah. That part isn't good.
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Hmmm . . .
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http://www.mackinac.org/article.aspx?ID=6750
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Cable funding.
You've misread both of your links. The first specifically refers to "the current copper plant in the ground in most of the US." That's a reference to phone company plant, which was built with taxpayer subsidies. Cable was built with private investment, not taxpayer money.
The second link to BVU is a muni-overbuild project. That's not a cable provider but is actually a municipal government that has overbuilt in their area to compete with the private sector (cable) option. The money they spent was in competition with cable, not on cable.
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Re: Cable funding.
'Government assistance has played an important role in the CATV industry. In fact, in view of the public interest that information and communications infrastructure should be established, and that regional disparities should be addressed including areas of difficult transmission, the central and local governments have provided various forms of assistance to the CATV industry.
However, as the CATV industry transforms itself towards more expansion and promotion of its regional character, the assistance policy should be changed as well. Subsidies to projects where there is no particular justification should not be continued. Even if there is reasonable grounds for government assistance, such assistance should not be rendered to CATV operators in areas where the nature and scope of such assistance addresses the difficulties which their managers themselves should be responsible for. Such assistance may result in inefficient management and misplaced management strategies.'
http://www.mediacom.keio.ac.jp/publication/pdf2008/sayaka.pdf
CATV has always received government assistance through grants/subsidies.
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Re: Re: Cable funding.
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It wasn't...
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Franchises haven't been exclusive for quite some time
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Exclusivity
Not only did it not prove to be "cost prohibitive... silly and unproductive... to have to get so many different approvals and abide by so many different rules", but in fact the cable industry grew and prospered quite nicely.
Further, in many cases those same companies had to do it two or three times as their initial franchises expired and were renewed through further negotiation.
It was never clear to me how it was such an onerous requirement for a company with billions in market cap, yet much smaller companies had no problems navigating the process.
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Re: Exclusivity
Articles with info like this:
"For many years, this meant a single cable company offering service with absolutely no competition."
only serve to perpetuate this incorrect view...a view that is at least 15 years out of touch.
Comcast is still negotiating local franchises in my neck of the woods, and Verzion was downstate as well. It's only AT&T that seems to be inept in the "local franchise" approach.
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Re: Re: Exclusivity
only serve to perpetuate this incorrect view...a view that is at least 15 years out of touch.""
Well, in my neck of the woods it's still true. In fact at one time, years ago, there used to be competition and cable was like $30 a month. Then one day Time Warner started taking it all over and prices skyrocketed ever since. There is no competition on cable where I live and many areas around here also have no competition just as well.
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only serve to perpetuate this incorrect view...a view that is at least 15 years out of touch."
I'll believe you over Mike when Time Warner isn't the only cable service provider in my area.
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Get your lines off my lawn!
What with tax breaks, incentives, and the ultra-corrupt Universal Service Fund, broadband stimulus scam, and the Telcomm Act funding scam.
Right-of-Way is not in the least compensated for, that's what the worthless franchise agreements arewere supposed to insure and all the really provide is theater for clueless. Hence that paltry, give the little crotchfruit some intrawebs, oh my how generous.
For a start, calculate how much the property tax on the land they use would cost, before even factoring in the cost of leasing the land. That amount would be huge, hence why the current effectively non-existent compensation is ridiculous and malacious.
Simple solution, go back to the 90's telecomm rule that the lobbyist got lifted. You can use right of way however you have to lease access at wholesale to competitors, add to that a requirement to use the portion of the insane profits towards infrastructure maintenance, expansion, and upgrades. And as far as rural, schools, and whatever other happy shiny idea they can get there funding from the frelling USF, which took in 7.1 BILLION dollars in 2008. Oh and just to keep them on their toes toss a few 90's style AOL injunctions around.
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Justin Davis
Internet Filter
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