Legislation being considered by legislature would leave unfair playing field

Monday, March 13, 2006

By Greg Harrison

Before it was acquired by its principal competitor, SBC, AT&T found every opportunity to remind the public that ratepayers had paid for the construction of the massive telephone network and, as a result, those ratepayers were entitled to reap some of the benefits in a broadband era.

Oh, how a year and a merger can change things. AT&T now wants to be able to exclude many, if not most, of the ratepayers -- the same ones who built its network -- from the fiber upgrades that are necessary to deliver advanced broadband services such as video over that network. Hypocrisy is a word that comes to mind.

The company is asking the Missouri Legislature to pass a law that would exempt the company -- as it seeks to roll out video services -- from the universal service-like rules that apply to all video providers.

That's right. Every cable operator in Missouri and around the country today plays by the same rules -- rules which flow from the 1984 and 1992 Cable Acts. In Missouri this means working in partnership with over 500 local communities who are given, through the law, the tools necessary to ensure the availability of video and broadband services in all neighborhoods in a cable company's service territory. Other rules also enable local officials -- the ones who know their local communities the best -- to set standards for customer service and resolve any complaints to create emergency alert overrides, and to require public education and government channels.

For the cable industry, and for most cities and townships in America, these rules have become a way of life. The cable industry invested over $100 billion of its own private risk capital to build the most advanced high-speed networks in the land that everyone -- rich and poor, rural and urban -- can access. Cable did it without the benefit of massive government subsidies and protections that the telephone companies enjoyed, like the Universal Service Fund line item that you see on your phone bill every month.

Not so for AT&T. Notwithstanding the fact that AT&T's network historically has been, and continues to be, publicly funded by taxpayers, the company wants special legislation from the Missouri Legislature that would give it a leg up on its competitors and permission to serve a select few of its telephone ratepayers with the new fiber upgrades.

To do so, AT&T is backing legislation -- Senate Bill 816 -- to repeal the applicability of the anti-discrimination provisions that would otherwise require that they upgrade their publicly-funded network for all ratepayers.

Indeed, AT&T's blithe pronouncements in this regard have been breathtaking. Recently, its officials (under the company's old name SBC) pronounced boldly to Wall Street their plans to cream-skim in the video marketplace. Under their so-called "Project Lightspeed," their video upgrades would be targeted to 90 percent of "high value" customers, but only 5 percent of "low value" customers.

Of course this kind of lording over the telecom landscape -- where seniors and the youth, urban and rural areas, and middle-class working families are treated as if they are readily expendable -- is exactly the kind of thing that current law forbids, and it is why AT&T so desperately wants to change that law.

The reality is that too many Missourians are unlikely to benefit from AT&T's business plan.

AT&T also wants to repeal obligations for public, educational and government access channels, and to eliminate any government oversight of customer complaints or performance standards.

Of course, AT&T is not likely to tell you all of this in its slick advertising. It will make abstract promises of more video competition, but not tell you that "Your world, delivered" -- its ironic ad campaign-- seems to deliver very little for most Missourians. Instead, AT&T argues that the local franchising process delays competitor entry into the market -- ignoring the wide body of evidence showing the award of video franchises to telephone companies within three months.

For our part, the cable industry recognizes that competition is here to stay. We are offering telephone service over our systems. We fully expect AT&T to compete for our video customers over their telephone system. That's good for consumers. But true competition should mean that all providers play by the same rules, and that all neighborhoods get access to the latest digital technologies. We are ready to do that, but for AT&T it doesn't appear that it is the kind of world they want to deliver.

Greg Harrison is president of the Missouri Cable Telecommunications Association in Jefferson City, Mo.

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