Senate wants guarantee that cable bill promises are kept DON THOMPSON Associated Press
June 27, 2006 http://www.mercurynews.com/mld/mercurynews/news/local/states/california/northern_california/14915844.htm SACRAMENTO - State senators struggled Tuesday to ensure that promises of cheaper cable television rates and more viewing choices become reality if they let telecommunication companies such as AT&T and Verizon compete with existing cable companies. Sen. Joe Dunn, D-Garden Grove, said the push to open the cable television market reminded him of California's experiment with energy deregulation, which led to price gouging and rolling blackouts in 2000 and 2001 and forced one of the state's major utilities into bankruptcy. "'Through competition, we will get a better deal on price.' ... The problem I have is, those were words of (former Enron Corp. chairman) Ken Lay. So I'm dubious," Dunn said. One of the most heavily lobbied bills of the session stalled at least momentarily in the Senate Energy, Utilities and Communications Committee, which put a vote off until Thursday after nearly three hours of testimony. The bill passed unanimously in the Assembly earlier this month. It would allow telephone companies into the cable TV market and let them compete for franchise agreements issued by the state, rather than by cities or counties. The television companies are seeking a piece of California's $5.3 billion-a-year cable business, seeking to offer packages that bundle telephone, television and high-speed Internet service. Interest was so high that lobbyists who couldn't squeeze into the jammed hearing room crowded the hallway or watched via closed circuit television from another committee room and were ushered in by sergeants-at-arms to present their brief statements. "This is a high-stakes game," said committee Chair Martha Escutia, D-Norwalk. "I've been having nightmares on this bill." California is the latest frontier for the telephone companies. They are seeking similar changes in about a dozen states and are pushing for federal legislation. In exchange for being able to compete for cable business, the telephone companies say they would offer consumers television packages with 300 channels or more and Internet speeds much faster than traditional digital subscriber lines. Supporters cited Federal Communications Commission and Government Accountability Office studies showing subscription costs could drop 10-20 percent. Escutia abruptly cut off California AT&T president Ken McNeely as he told senators his company will invest $1 billion and hire 1,000 employees if lawmakers approve the bill. "Sounds really nice," she told him. "But we have to get started on the nitty-gritty." Among her concerns is whether the telephone companies would offer those choices to all neighborhoods, not just wealthy ones. Existing cable television companies compete for franchise agreements that require them to provide service to entire cities. "It's only competition if they invest in your community," said Sen. Kevin Murray, D-Culver City. "I'd like people to be able to spend, you know, $5 less for Nickelodeon, but I'm more concerned about people having access to the Internet." "The last thing we want to do is present a bill that is going to grow the digital divide" between rich and poor, agreed Assembly Speaker Fabian Nunez, D-Los Angeles, who is carrying the bill. Nunez said he would accept numerous Senate amendments. Those include measures to protect cities' loss of franchise fees and control over the placement of cable boxes and cable right-of-way. Under another amendment, rates for basic residential phone service would be frozen for two years, until January 2009, to keep telephone companies from using higher rates to unfairly subsidize their foray into the cable industry. Cable television operators support the bill, based on amendments assuring they can compete with the telephone companies. Still to be debated is how to fund public and government access television channels and Web sites that receive their money from cable television franchises. The program would be administered by the California Public Utilities Commission. Dunn noted that body also oversaw the state's attempt at energy deregulation, but Verizon spokesman Jon Davies dismissed such comparisons. "I think you can tell by our past performance that we've always been very responsive and serviced our customers in a responsible manner," Davies said after the hearing. If the bill clears Escutia's committee, it will go to the Senate Appropriations Committee for another hearing in August before heading to the full Senate. If passed, it would be sent back to the Assembly. ON THE NET Read AB2987 at http://www.assembly.ca.gov ================================ George Antunes, Political Science Dept University of Houston; Houston, TX 77204 Voice: 713-743-3923 Fax: 713-743-3927 antunes at uh dot edu Reply with a "Thank you" if you liked this post. _____________________________ MEDIANEWS mailing list [email protected] To unsubscribe send an email to: [EMAIL PROTECTED]
