MYTH: Local cable franchises are a barrier to entry.
MYTH: Cable companies have monopoly franchises today.
MYTH: Nor is it the case that Qwest will provide fiber only to the rich.
MYTH: The cable companies were not originally required to serve everyone throughout their franchise areas when they first entered the video market. The Bells shouldn't be required to, either.
MYTH: Cable companies didn't have to obtain a second franchise to provide phone service, so the phone companies shouldn't have to obtain a video franchise to upgrade their network.
MYTH: Without the Bells entry into video, cable rates will continue to rise.
MYTH: Because Bell entry in the video market is expensive, and it will be difficult for them to make a profit, franchise regulations and build-out requirements should not be imposed on the Bells, giving them incentive to make this costly investment.
MYTH: Until the Bells' new services make the video market sufficiently competitive, lawmakers should grant the cable industry no additional forms of deregulation.
MYTH: Local cable franchises are a barrier to entry.
FACT: When sought, Telcoms typically get franchise applications approved quickly, obtaining franchises in as little as a few weeks (from filing of application to approval) in communities; many in under three months. One CEO told Business Week Online, [w]e haven't been turned down anywhere we've gone. Other, smaller competitors to cable in IA (Southslope, KalonaCom, LibertyCom, ) collectively have more than ___ local franchises obtained under the current law. Senate Bill -554 neoDeal is unneeded, unwarranted, and would unfairly advantage the State's largest and wealthiest phone company to the detriment of consumers, municipalities, and cable competition.
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MYTH: Cable companies have monopoly franchises today.
FACT: Statement is Incorrect: exclusive cable franchises have been illegal since 1992. What's more, every cable company in America already faces competition from the second and third largest video providers in the country DirecTV and EchoStar as well as other cable companies like RCN that routinely obtain competitive franchises with a fraction of the resources available to Qwest and the Bells. And Qwest itself has to date applied for competitive franchises in 0 Iowa Municipalities: expect more for Iowan's.
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MYTH: Nor is it the case that Qwest will provide fiber only to the rich.
FACT: If the Bell companies were not planning to serve predominantly affluent areas, they would not be objecting to the non-discrimination and build-out requirements that Congress has already established and local franchise agreements enforce. Why seek to change a [tremendously expensive] law that you are planning to obey? Do YOU trust the big-5 corporate media culture to look out for you: or themselves?
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MYTH: The cable companies were not originally required to serve everyone throughout their franchise areas when they first entered the video market. The Bells shouldn't be required to, either.
FACT: Cable companies have never been permitted to cherry-pick or redline. Since 1984, federal law has forbidden redlining in the cable industry, and in 1992 Congress further strengthened its commitment to this policy by adding a locally determined and enforced requirement that all households in a franchise area be offered service within a reasonable period of time. These requirements also have applied to system upgrades, even as cable providers faced increased competition. There is no reason why the Bells with all their resources and decades of government subsidy “cannot adhere to similar reasonable time frames with non-compliance enforcement.”
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MYTH: Cable companies didn't have to obtain a second franchise to provide phone service, so the phone companies shouldn't have to obtain a video franchise to upgrade their network.
FACT: When entering the phone market, cable companies are required to obtain a second franchise and several other necessary components of providing phone services. Cable never sought an exemption from these requirements and understands that it must play by the phone rules and regulations outlined for phone providers. Just as cable companies do when they enter the phone market, new entrants into the cable market should be expected to follow the same rules as every other provider.
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MYTH: Without the Bells entry into video, cable rates will continue to rise.
FACT: In the face of stiff competition, cable offers a better value than ever before. Basic rates have risen much less than inflation since 1992, while the “enhanced basic packages feature more channels and better programming commensurate with retail price adjustments. The best basic rate in the state is in Iowa City at [$11.25] due to rate-regulation and regulatory teeth.
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MYTH: Because Bell entry in the video market is expensive, and it will be difficult for them to make a profit, franchise regulations and build-out requirements should not be imposed on the Bells, giving them incentive to make this costly investment.
FACT: Qwest and the Bells are not mom-and-pop operations. The market capitalization of the four Bell companies is more than twice that of the cable industry, and their revenues in 2004 totaled nearly $148 billion (as compared with the cable industry, where the top 8 cable operators combined to earn $51 billion). Their long history as a monopoly gives them established relationships with 85% of the households within their territories, while cable companies only serve 66% of homes nationally. They also continue to receive billions in government subsidies and are able to borrow at much lower interest rates. Even competitive wireline cable operators like MediaCom have complied with build-out and anti-discrimination rules. If they can do so, why can't the Bells?
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MYTH: Until the Bells' new services make the video market sufficiently competitive, lawmakers should grant the cable industry no additional forms of deregulation.
FACT: The Bells found themselves on the other end of this same argument not too long ago, although the facts and their rebuttal were quite different. The Telecom Act of 1996 allowed the Bells to enter the long distance market when their local phone markets became sufficiently competitive. The Bells' competitors argued that the Bells should not be deregulated and allowed into the long distance market until local phone competition took hold. The Bells wasted no time telling regulators that their phone markets: with an average penetration rate of just 14% by competitors: were already fully competitive. The Bells brazenly argued that competition from cable telephony (at the time serving less than 2% of the total market) and wireless firms (of which the Bells collectively owned three of the largest) gave them all the competition they could handle and therefore they should be deregulated to compete with competitive phone providers. Regardless, the market for video services is already quite competitive. Direct broadcast satellite providers hold over 27% of the market; a number that grows daily. Add to that competitive cable companies, who have overbuilt their own networks to compete head to head with incumbents, and it's easy to see that cable faces real competition. There is no reason to hamstring the cable industry while the Bells seek yet another leg up with exemptions from video franchising rules. The Bells and cable companies should compete under the same rules to provide video services to consumers.
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What? Do YOU do your own thinking ? Agree? Disent? Have Question or Comment?
email: iowalliance@iciaus.com
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