IRONIC: State to state across our land We the people are consenting to offer welfare to global Telcoms -who do not need it. Qwest, the Iowa Telephone Association (ITA) [Telcoms] – also referred to as “video service providers,” [Telcoms] have come to the Iowa to propose that they be allowed permission from the State to obtain statewide franchise certificates (state certificates) to provide video services and competition to cable companies on a statewide basis. These video service providers propose they obtain one state certificate to supply competitive cable TV service throughout the state. As the proposed bill SF368 is written, the effects of providing these state certificates to video service providers will begin to erode or eliminate several provisions Iowa cities now have in their franchise agreements with cable companies. Federal law established the framework for the relationship between cities and cable companies. This framework established a process by which cities, who would provide access to the Public Rights of Way (PROW) – public land managed by the local government - could negotiate with the cable companies for the use of the PROW. This relationship enabled cities to negotiate with cable companies to grant that land use in exchange for cable TV related benefits for the community. Many cities, including Iowa City, who negotiated with the cable companies conducted community needs assessment programs that identified the needs and interests of that community. It was the outcome of those assessments that formed part of the basis for which the cities negotiated. The resulting outcome enabled cable companies to string their wires throughout a community using PROW in exchange for providing certain cable TV related benefits to the community. The provisions were different for all communities because each community determined their own needs and interests. Iowa City negotiated for and received the following cable TV related benefits: consumer protection services; operational funding for the local public access channel (PATV); mandatory buildouts requiring that all households have access to the cable system; pass through funds to establish a free video service for nonprofits in the Iowa City area to be managed by the City; the provision of Institutional Networks (INETs) which are used to connect several city, school, public access and library buildings in order to originate programming, transfer data and other telecommunications purposes; to enable all local cable TV access channels to produce and provide NTSC signals that the cable company carries on their channel lineup; to conduct audits of the cable company; provisions for the placement of public service announcements (PSAs) on a regular basis on the cable system; to put into place and control a local emergency alert system; technical assistance from the cable company to ensure the proper operation of the channels and the INETs; to provide for interconnections with other surrounding communities' cable systems so that local access channels in each city could be shared; to determine the definition of gross revenues upon which the franchise fee was to be based and which was to be paid to the City by the cable company; free wiring to the schools, libraries and government buildings for cable service. In addition, the City opted to regulate the rates of the basic service tier rates based upon Federal Communication Commission (FCC) guidelines. Other Iowa cities negotiated for capital contributions for programming and telecommunications facilities, production agreements stipulating the cable company must produce local community programming of the City's choice – such as City Council meetings. In each of the negotiations there was an opportunity for citizens to participate in the franchising process through public hearings and the community needs and interests program.

The proposed SF368 statewide certificates will erode or eliminate these community determined cable related benefits. SF368 proposes: there be no local rate regulation; no operational funding for local public, educational and government (PEG) channels; mandatory buildouts to the community are explicitly prohibited; no additional fees such as those now supplied by the cable company to provide free video services to nonprofit organizations in the Iowa City area which are managed by the City; to no longer transmit NTSC signals, but instead IPTV signals, which would require a $15,000 video capture card per local access channel for the necessary equipment and $13,000 annually for a T-1 line per access channel to convert signals to the format required by the video service provider; to no longer provide meaningful consumer protection services; company audits must show an 8% underpayment or the City pays for the audit (the 8% representing approximately $50,000 in Iowa City's case); no INET facilities or support; no provisions for PSAs; no provisions for local control of an emergency alert service; redefines gross revenues so the City receives less in franchise fees; no capital contributions; no free wiring to schools, libraries, cities and public access buildings; no production agreements; no technical assistance; interconnections cannot be required but can accomplished through “reasonable efforts and good faith negotiations,” and no citizen input into the franchising process to help determine the community's cable TV related needs and interests.

The video service providers propose giving them state certificates and the resulting restrictions on cities cable TV related needs and interests will enable them to create competition to incumbent cable operators in the most timely manner possible. In addition, the video service providers have stated that the local governments have created a “barrier to entry” which will cost them time and money which will place on them undue constraints to provide that competition.

The competition video service providers speak of is composed of three parts – price, service, and products. In a recent study of rates between North Liberty – which has Mediacom and Southslope competing head to head, and Iowa City, which has no competition but regulates rates, the results show that the rates are lower in Iowa City. In other cities around the country the same results have been found. This is not to say that competition in terms of price doesn't occur. But it is not a given. Service is an important element of competition. Video service providers (phone companies) performance regarding service speaks for itself. Product is another important element of competition. All providers of video – cable companies, phone companies, satellite services – all purchase the same products, or programming, from the same sources. All video providers offer the same or similar channels and programming. The channels or programming may be packaged in different ways, which appears to offer differing tiers and differing rates – which may or may not be the case, and may be just as confusing as your current cable bill. The claim that cities have been “barriers to entry” has not been proven. In fact, local governments have tried to entice competition to come into their communities. Every cable franchise is nonexclusive by Federal law. Any company could have and can come into any community at any time and compete with the incumbent cable provider. Ultimately almost all cities and citizens want competition. The question that arises is at what cost? The cost to the public, in terms of the value of it's land, and the cable related benefits and services are something that should be considered in the proposed SF368 legislation. 12 states have already passed legislation similar to SF368. Any variation that occurs in this legislation from state to state is the result of the public input to their State legislators. Another 20 states now have similar legislation being proposed.