Viewpoint: Was pulling the plug on SB 816 the right move?

Thursday, April 20, 2006

Stick a fork in it -- it's done.

Those were the words of Missouri Sen. John Griesheimer last month as continued opposition from some Republicans forced him to lay aside the 19th version of his legislation.

Griesheimer, of Washington, Mo., was the sponsor of Senate Bill 816, which would have made it easier for telecommunications companies to compete against cable television. Griesheimer said he has no plans for further negotiations, nor for bringing the bill back up again this year on the Senate floor.

Another Senator, Majority Leader Charlie Shields, R-St. Joseph, said it would take some "magical compromise" for the bill to resurface -- the details of which he couldn't imagine.

There were a lot of local Southeast Missouri connections to the bill. The bill was backed by AT&T Corp. and Marsha Haskell, the regional director for external affairs, spent a lot of time in Jefferson City lobbying for the bill. The bill would have made it easier for the state's largest local telephone company -- and for other high-speed Internet providers -- to compete against cable TV companies by offering an Internet based television service.

Instead of having to strike deals with each of the 553 local governments that have cable franchises in Missouri, the bill would have allowed television newcomers such as AT&T to instead get a state-issued franchise permitting them to enter multiple markets.

AT&T, formerly known as SBC Communications Inc., had pledged to invest about $100 million to bring its video service to Missouri, if the bill had passed.

But cable companies and some local governments, which receive about $35 million annually in franchise fees from cable operators, complained the bill would have given a market edge to AT&T. That's primarily because newcomers would not have had to offer TV service to the entire area covered by a cable provider in order to begin competing against them.

The latest version of the bill would have given competitors seven years to extend the reach of their TV services to all the residential customers for whom their broadband Internet service also was available.

It also would have given cable companies the right to opt out of their franchise agreements with local governments if a competitor entered their markets.

Another local connection was Sen. Jason Crowell, R-Cape Girardeau, who said the bill as passed would lead to broken contacts and lawsuits and leave cities without any television providers who were required to extend service to all residents.

Opponents and supporters both claimed to be acting in the best interests of consumers.

Those who promoted the bill said it would increase competition for the cable TV industry. They argued it would lead to lower prices and better products or services. And it is true that cable television companies, including Charter in Cape Girardeau and several other Southeast Missouri communities, operate a city franchise without active competition.

Crowell and opponents, however, said SB 816 would require the state to issue operating permits to phone companies for cable and broadband service to designated customer areas. The newcomer company could "cherry-pick," Crowell said, choosing the most expensive neighborhoods in the city and ignore the rest of the territory that existing cable companies must serve under city franchises.

We like the intent of SB 816 and would favor it in a second, except for the fact that it would be placed on top of the existing system. It's a fairness issue and the rules for one truly should be the rules for all.

That makes SB 816 troublesome. True, cities across the state are in dire need of cable competition. And satellite, which mainly appeals to rural areas, isn't enough.

Those behind SB 816 may have the best intentions. We hope that a real answer to this problem is forthcoming. SB 816, however, isn't the best one.

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