Beware phone companies’ cable reform

The telephone companies are spending millions of dollars on advertising and lobbying to convince everyone — consumers, businesses, reporters, editorial boards and legislators — that competition is the answer to all of our video and broadband needs. Competition will bring consumers greater choices in programming, lower prices and more responsive customer service.

Why does this sound familiar?

To many Californians it is eerily reminiscent of the arguments that energy companies used to push through electric energy deregulation back in 1996. Legislators then — as the Assembly did a few weeks ago — voted for a bill that most of them didn’t understand, and probably some of them didn’t read. They voted for a complicated measure that others had assured them was a good thing because it would foster — competition! And lower prices! And greater consumer choice!

Sadly, all the laws of unintended consequences were set in motion. In a few short years, every consumer could see that the benefits of the deregulation package flowed one way only — to the energy producers (remember Enron?) that gleefully “gamed” Californians out of billions of dollars.

Consumers got skyrocketing electricity prices, electricity shortages and rotating blackouts.

The telephone companies’ version of “reform” is AB 2987, sponsored by Assembly Speaker Fabian Núñez and Assemblyman Lloyd Levine. The bill would create a statewide franchise to allow AT&T, Verizon and other telephone companies to compete with the cable companies by providing broadband video services.

We want video and broadband competition. Consumers deserve more and better choices than cable’s bundled video packages and ever-increasing rates. But many people who have taken the time to look past the full-page ads, the TV commercials and the hype around this measure to actually read the bill have deep concerns about the way it is written.

For example, competition works great — if everyone plays under the same rules. But the rules aren’t the same under AB 2987 and, as a result, there’s no way for truly fair competition to exist. While cable companies serve entire franchise areas and offer service to everyone in that entire service area, AB 2987 would allow telephone companies to “cherry pick” their customers and provide service only to the areas they want.

When you do get service, AB 2987 would allow AT&T to offer an “alternative” broadband delivery — such as satellite, rather than their faster and presumably more reliable new fiber optic cable product. And guess what? You don’t need AB 2987 to get the same service you could get today.

There are other serious issues. For example, moving the franchise to the state level is certainly convenient for the broadband service providers, but it’s going to hurt communities’ ability to manage their local rights-of-way, and it’s terrible for anyone who has a service complaint or a problem.

Loss of funding support for communities to obtain public access, or “PEG” channels (“public, education and government”) is also a serious concern. Public access to video is an important community service, providing an essential source of emergency information during times of crisis and making it possible for people to monitor the workings of their local and regional governments.

The Assembly didn’t do its job when they rushed this measure out last month on a 77-0 vote. The Senate has a chance to do it right. Already the Senate Energy, Utilities and Communications Committee decided to delay its hearing by one week, and it will be held Tuesday. That’s a good sign — perhaps it indicates that they’re listening to the concerns.

We can’t afford “energy déja vu.” Video and telecommunications are too important.

Zane Blaney is executive director of Access SF and a member of the Telecommunications Equity Coalition (TEC), a group of local and statewide community organizations, municipalities and individuals concerned about protecting and advancing public access to high quality video and broadband telecommunications services.General OpinionOpinion

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