Bill seeks cable parity

Posted: Tuesday, Mar 11, 2008 - 11:01:08 pm PDT
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By LUCY DUKES
Staff writer 

JASON HUNT/Press Jeff Crowe of Bunkhouse Media wires in video cable in the Community Room at the Coeur d'Alene Library Tuesday.

Jorgenson introduces legislation to encourage provider competition

COEUR d'ALENE -- Time Warner Cable is the only cable provider with contracts in Coeur d'Alene, Post Falls and Hayden.

Some people say that constitutes a monopoly. Others maintain any cable company can provide services in the cities, if they are willing to sign a franchise agreement and build the infrastructure to areas that are not as profitable -- as Time Warner is required to do and has spent millions of dollars doing.

If there was more competition, consumers would get better service and better rates, said Sen. Mike Jorgenson, R-Hayden Lake. He noted that Seahawks football wasn't available to area cable viewers for more than a year.

Jorgenson is trying to change the system by introducing legislation that he says would allow more competition.

"This bill is saying 'hey, we need competition,'" he said.

Under the existing system Time Warner pays a percentage of the revenues generated inside each city to the cities in return for using the rights of way. The cities, in turn, require the company to provide service to the less profitable areas within their borders.

The bill would set the terms of the franchise agreements at the state level, whereas cities negotiate individual agreements under current rules. The bill, Senate Bill 1461, is now up for amendments. It is possible a new bill will be introduced, Jorgenson said.

The proposed legislation does not have a buildout requirement, but it does have an anti-discrimination clause prohibiting denial of service to any group of potential customers based upon their income.

Jorgenson said the issue was exacerbated when Adelphia was bought out by Time Warner and there was a dispute with Fox resulting in the cable company not carrying the station for 18 months. An agreement was reached just before the Super Bowl, which Fox carried this year.

"You don't provide the Super Bowl you're making a lot of people very upset," Jorgenson said.

He introduced the bill last week after meetings on the issue failed to materialize between himself, cable companies and the Idaho Association of Cities. The IAC developed the draft of the bill, but did not return phone calls for comment.

Jorgenson said he brought the bill forward because he was not going to "sit on his hands," and that the threat of the legislation is what brought the Super Bowl to local viewers this year.

Time Warner opposes the bill, and officials in the three cities say they have questions.

Northwest area manager Correen Stauffer said the company welcomes competition, but the legislation is not fair and not needed.

"From our perspective, the system isn't broken. Why create additional legislation?" she said.

The cable company has expanded service over the years, building out when required. If another company wanted to secure a franchise and build the same kind of infrastructure, nothing prevents that from happening, Stauffer said.

City of Coeur d'Alene councilman and liaison to the TV committee Woody McEvers also does not like the bill and does not think it will provide more competition.

"Most of us are saying 'what's broken?' it's working great," he said.

Time Warner and the city signed a 10-year contract in 2004 that gives the city $10,000 per year in capital dollars, plus 5 percent of the revenues earned within city limits.

That revenue amounted to $319,000 in 2007. Forty percent of the money goes to pay off a general obligation bond used to finance improvements on Ramsey, Government Way south of Interstate 90 and improvements on east Sherman Avenue, according to city finance director Troy Tymesen.

The bill does not address the city's capital program that supports the city's television station, channel 19, McEvers said.

"That seems to be the failing point in this bill," he said. "It's not just for us, it's for the future."

Post Falls Public information specialist Kit Hoffer was concerned about the lack of a buildout requirement, the city maintaining control over its rights of way, and over who would resolve customer service issues.

"There is too much that doesn't protect our citizens," she said. "It may work in high density areas, but it does not work in rural areas."

The city signed a 15-year contract with the cable provider in 2004. Post Falls also has a franchise fee of 5 percent, which generated $132,829 last year.

The same terms would be offered to another cable company wishing to provide service in Post Falls, she said.

"They are welcome to come in to any community and negotiate a franchise, should they choose to do so," Hoffer said.

Hayden City Administrator Jay Townsend said he is concerned about existing agreements remaining intact, as well as issues with right of way control.

Hayden also gets a 5 percent franchise fee, which last year amounted to $82,800.

Others agree with Jorgenson that there needs to be more competition among cable companies, and that the bill is a step toward making it happen.

Qwest supports the bill, which spokesman Bob Gravely called a "very reasonable approach to cable franchising."

Qwest just wants the opportunity to gradually deploy its services rather than conduct a massive buildout, he said. Requiring the buildout keeps competitors from coming in because costs are so prohibitive, he said

The bill maintains revenue streams and control of rights of way for cities, while making the process workable for providers who want to compete. It also eliminates the individual franchises that can result in sets of different rules for every city, he said.

"It really makes it possible," Gravely said. "It's not workable to try to negotiate with dozens of municipalities."

Qwest does not have plans to roll out cable TV over its existing phone and high-speed Internet network, but the company believes the proposed legislation is good public policy, he said.

"The customer can't lose. It would only encourage there to be more providers," Gravely said.