Off the Kuff Rotating Header Image

TWC vs SBC

Anyone else noticed the ads on Time Warner Cable lately that are agitating against letting “mega-telcos” get their way in the Legislature, which (we’re told) would lead to only rich people getting cable TV? I’d assumed these spots had to do with HB789, but wasn’t sure what TWC’s angle was. Now I see.

The bills would remove certain barriers to competition such as unequal treatment and take out ambiguities that lead to lawsuits, said sponsor Phil King, R-Weatherford. The legislation would affect cable TV, wireless and landline phone service, Internet and other video companies.

The first bill, House Bill 789, overwhelmingly passed the House last month, and the second part, HB 3179, was approved by the Regulated Industries Committee Tuesday and will be eligible for debate by the full House if it is cleared by the Calendars Committee.

“We’ve regulated this to death,” King said. “This is aimed at allowing new competitors to come in and fight for business and remove unnecessary legislation.”

The Time Warner ad claimed passage would lead to redlining, where cable companies could pick and choose which markets they want to serve, said Ray Purser, vice president of public affairs for the company. A similar ad was placed in Sunday’s Houston Chronicle.

Current law mandates that telecommunications companies must get separate franchises in each city they want to service. If a city grants a franchise, the company must serve all residents within the municipality, Purser said.

King’s legislation would give franchises automatic rights to do business in any city in Texas and would allow companies to pick and choose who they serve, Purser said.

“It is state-sanctioned redlining,” he said. “It allows telecommunications providers to only build in the wealthier neighborhoods. We are trying to educate the consumer on the fact that it is bad public policy to allow redlining.”

King said consumers benefit the most from competition, and cable companies such as Time Warner are upset because they have had a monopoly on the market for so long and don’t want new competitors.

“The cable companies’ arguments are not valid,” he said. “What they’re promoting is bad policy. They want to continue the monopoly and I don’t think the legislators are buying it, so they’re going to the public.”

Hoping to compete with cable companies, SBC recently announced plans for a new project to provide cable service, and King’s legislation would help push that initiative forward.

Do cable companies really have a monopoly any more, now that satellite TV is widely available? I’m not saying that having a second cable provider in a given area would be a bad thing, but I don’t think the absence of such is necessarily monopolistic. What’s for sale here is content, and consumers do have a choice. Not a great one, perhaps, but one does exist.

The Austin Chronicle notes that these bills are another form of intereference in municipal revenue by the State Lege.

Municipalities can also generate revenue through leasing rights-of-way, through fees charged to cable and telecom providers in exchange for the use of public streets. Last year, Austin took in just under $22 million in rights-of-way fees from cable and telecom providers. But under HB 3179, cities would no longer be able to negotiate right-of-way use agreements. A statewide standard would determine such things as the maximum number of PEG (public educational government) channels any cable provider was required to offer, and right-of-way fees would be replaced by a statewide 3.95% fee on each sale of a communications service. The precise provisions are still to be worked out (should the bill advance), but municipalities fear a legislated sweetheart deal for providers, with a consequent loss in revenue for cities.

That was written before HB3179 made it out of committee, so I don’t know if the concerns about revenue loss are still relevant. I do know that we already have plenty of reasons to fear and loathe HB789, so I’m not inclined to give HB3179 much benefit of the doubt. Still, it’s not like TWC is a warm, fuzzy, consumer-friendly face, so I’d like to hear more about HB3179 before I’m convinced. I just hope it gets enough coverage for me to do so. AusChron link via Save Muni Wireless.

Related Posts:

  • No Related Posts

5 Comments

  1. chip says:

    Both SBC and TWC have been involved in a lot of guerilla theater over HB 3179. I saw a print ad by SBC claiming that cable won’t run their ads because they are too hot, and I heard SBC had a crew picketing (!!!) outside TWC. Nothing like a little manufactured controversy to build interest and sympathy.

    HB 3179 is stupendously bad. I suspect the only way HB 789 made it out of committee was by stripping the muni ban and the HB 3179 stuff from it.

    You know that episode of Star Trek where the transporter goes furlingersher and you get good Kirk and bad Kirk? Here the split between HB 789 and HB 3179 is like bad Kirk and loathesome Kirk.

    HB 3179 addresses a very real, very significant problem. Bits are bits, and so it doesn’t make sense that different providers pay different fees (right-of-way, franchise, whatever). We clearly need a new system, but that system should be driven by good telecom policy, not the whims of the incumbent telco.

    Also, you need to be careful about comparing apples-to-apples. SBC may claim that TWC is paying lower fees, but there are also a lot of in-kind services in the TWC franchise agreement that benefit citizens in the service area. For instance, if HB 3179 kills local franchise negotiation, it isn’t clear what happens to the PEG (public, entertainment, government) channels.

  2. Randy Paul says:

    Do cable companies really have a monopoly any more, now that satellite TV is widely available?

    Charles,

    One of the reasons why the Satellite Home Viewers Improvement Act passed was to give competition to cable (or so Billy Tauzin’s rep told me at a Louisiana Association of Broadcasters Convention.)

  3. Shawn Gamble says:

    Plain and simple, this legislation was written by SBC for SBC. They are worried about new competition and are trying to serve only “High Value Texans” as a Texan that does not live in the best part of town I guess that make me a Low Value Texan.
    Redlining is illegal in every state because it is inherently Racist. Economic, Social and Race, discrimination by utility’s is not only wrong its reprehensible this is not the south of the 1950’s. and in my opinion ( obviously not SBC’s or those senators and congressmen that support this bill ) all Texans are of High Value.

  4. stewzz says:

    I remember back in the 70’s when cable started out only in “high value texans” . It took years before we finally I got cable in are area. My father inlaw still does not have cable. He has sattalite .The cable company had to start out somewhare , I think sbc should be able to start out somewhare , but the cable company is afraid of compation , but if you think about it it would or might lower are bill do to compatision .

  5. Vince says:

    SBC can kiss my @ss. Get Vonage or Packet8 and clip their lines.