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Senate bill would ease burden on companies entering TV market
by Rob Poggenklass · News · March 28, 2007
A bill passed by the Iowa Senate last week would make it easier for cable TV service providers to enter new markets, by eliminating the companies’ need to negotiate franchise agreements with individual municipalities.
Support for the bill, Senate File 554, has come from large telephone companies, particularly Qwest, as they try to compete for TV customers with established cable providers such as Mediacom. The legislation would allow companies to negotiate a single franchise agreement with the state. That statewide agreement would apply to all municipalities where there is more than one cable provider, such as West Branch.
The bill passed in the Iowa Senate, 44-6, on March 20. It now goes to the Iowa House for consideration.
Jerry Melick, manager of Liberty Communications — one such phone company that provides TV service — said the bill is similar to legislation that has been passed in about a dozen other states. He said it is part of an effort by the Federal Communications Commission to streamline companies’ ability to enter the TV market. Melick believes that making it easier for more companies to provide TV service will benefit customers.
“It’s about choice, and it’s about lower rates,” Melick said. “There are lots of parts of Iowa that don’t have competition and they’re paying higher rates.”
Although the bill makes it easier for new companies to negotiate franchises, it doesn’t do so at the expense of incumbent cable providers with existing franchise agreements. Under the legislation, existing providers like Mediacom would be able to renegotiate a franchise with the state if a new company enters one of its TV markets. Melick said that’s only fair.
“If it’s really competitive, then both entities should be on a level playing field,” he said. “It’s hard to argue against that.”
But the legislation has its critics. Some Iowa Citians are upset because of the negative impact the bill could have on that city’s public, educational and governmental (PEG) channels. The bill places the burden of transmission technology on municipalities, rather than allowing cities to negotiate with TV companies to provide some of the technology or funding for technology. Liberty Communications agreed to such a deal when it negotiated a franchise agreement with the City of West Branch.
West Branch City Administrator Ty Doermann worries that the new legislation could make it more difficult for cities to upgrade technology at local access channels.
“It’s going to hurt larger cities a lot,” said Doermann. “If you don’t have the money coming in, it’s going to hurt local access budgets, which in turn hurts other city departments’ budgets.”
David Johnson, a former member of the West Branch Cable Commission, opposes the legislation. He said that while the bill’s supporters frame it as pro-competition, the legislation will allow companies like Qwest to reduce the amount of technology they provide to local access channels. Furthermore, Johnson believes the companies will start negotiating with states to cut and perhaps even eliminate the franchise fees that support PEG channels.
But Melick said there’s value to PEG channels, and he doesn’t believe the legislation will negatively affect them. He also says this bill, and similar legislation in other states, will help open two lines of information for TV, voice and internet services, where before there may have been only one.
“Having the ability to have two pipelines into the house is a good thing for us as a country,” Melick said.
West Branch’s representative in the Iowa Senate, Republican Jim Hahn of Muscatine, was one of six senators to cast a “no” vote on SF 554, along with Democrat Bob Dvorsky of Coralville.
Although the bill passed overwhelmingly in the Iowa Senate, State Rep. Jeff Kaufmann said that it faces an uphill battle in the Iowa House. The League of Cities has pushed for more negotiating room in the legislation, and Kaufmann believes that TV companies will need to compromise for the bill to be accepted by the House Commerce Committee.
“I don’t think it’s a slam dunk that it’ll reach the House floor,” said Kaufmann. “Not in its current form.”
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