Qwest Renews Push to Gut Local Authority over Cable Television

It's 2011 and time for Qwest to renew a push to gut local authority in a number of states - Idaho and Colorado to start. An article for the Denver Post explains the argument:

Phone companies say state-level oversight of video franchising fosters competition because it is less cumbersome for new entrants to secure the right to offer services.

Many states have also eliminated the condition that new video competitors must eventually offer service to every home in a given municipality, a requirement placed on incumbent cable-TV providers.

Gutting local authority is the best way to increase the disparities between those who have broadband and those who do not. Qwest and others are only interested in building out in the most profitable areas -- which then leaves those unserved even more difficult to serve because the costs of serving them cannot be balanced with those who can be served at a lower cost.

The only reason that just about every American living in a city has access to broadband is because franchise requirements forced companies to build out everyone. Without these requirements, cable buildouts would almost certainly have mirrored the early private company efforts to wire towns for electricity -- wealthier areas of town had a number of choices and low-income areas of town had none.

In Idaho, those fighting back against this attempt to limit local authority are worried that statewide franchising will kill their local public access channels - a reality that others face across the nation where these laws have passed.

The channels, which are also used to publicize community events, provide complete coverage of Pocatello City Council, Planning and Zoning and School District 25 board meetings, as well as candidate forums before elections.

Without these local channels, how could people stay informed about what is happening in the community? Local newspapers are increasingly hard to find. In many communities, these channels are the last bastion of local news. 

This fight over statewide franchising goes back a number of years, but the general theme is that massive incumbent phone companies promise that communities would have much more competition among triple-play networks if only the public ceases to derive benefits from its Right-of-Way.  Statewide franchising laws limit local authority to negotiate for access to this valuable asset that is managed by the local government. The laws strip communities of the power to negotiate with video providers, creating a single franchise process in the state government (which typically has very little or no oversight). Communities lose public access channels, fees for creating local content, and often oversight to require certain levels of customer service.

The states that have gutted local authority in this way have seen very few benefits -- the increase in competition is negligible - because the real barrier to competition has nothing to do with local or statewide franchising. The only barrier worth addressing is the massive advantages incumbents have -- a result of the high cost of building these networks. When a competitor builds a network, it is often competing with an incumbent that has amortized the costs of its network and will be able to cut its prices while cross-subsidizing its operations from non-competitive markets. A number of incumbent providers have engaged in predatory pricing, taking a loss on their customers in an effort to prevent the network from generating the necessary revenues to operate and make its debt payments.

The price of gutting local authority to benefit Qwest, a company with no capacity for the upgrades necessary to match the speeds and prices of DOCSIS3 cable networks, is far too great.