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State Cable & Telecommunication Deregulation at Alliance for Community Media Annual Conference
Transcript of State Cable & Telecommunication Deregulation
Telecommunications Law
©2013 Best Best & Krieger LLP
Telecommunications Law
State Franchising: An idea whosetime has past, whose benefits have
failed to appear, but whose damageswe see every day.
PRESENTED BY
Joseph Van EatonPartner
PREPARED BY
Gerard Lavery LedererOf Counsel
©2013 Best Best & Krieger LLP
Telecommunications Law
Promises Made in Support of StateFranchising
• Enhanced Consumer Choices
• Lower Prices for Consumers
• Better Quality Programming
• High Quality (union) Jobs
• No Loss of Community Media (claim made insome states.)
Telecommunications Law
History of State Franchising
Telecommunications Law
HISTORIC TABLESPRIOR TO 2005, 10 STATES HAD SOME STATE LEVEL
OVERSIGHT WITH THREE STATES SERVING ASFRANCHISING AUTHORITY
Telecommunications Law
0
5
1 0
1 5
2 0
2 5
3 0
3 5
2005
2007
2009
2011
2013
Y e a r
S ta te s p a s s in gs ta te fra n c h is ele g is la tio n
S ta te sC o n s id e r in gle g is la tio n
Majority of States ConsideringLegislation Rejected State Franchising
Telecommunications Law
Number of States Adopting LegislationHas Fallen Dramatically
0
1
2
3
4
5
6
7
8
9
2005 2006 2007 2008 2009 2010 2011 2012
Year
Nu
mb
ero
fs
tate
sp
as
sin
gsta
te
fra
nc
his
ele
gis
lati
on
Telecommunications Law
ID
AZ
UT
MT
WY
NM
CO
AL
FL
SC
TN
KY
IN
OH
NC
SD
KS
NE
MN
WI
IA
IL
MO
AR
MS
OK
ND
OR
CA NV
WA
TX
PA
ME
VA
NY
CT
WV
MDNJ
VT
NH
MA
DE
RI
LEGEND
State w/ Franchising Law
State w/ Legis Anticipated
Local Franchising and No legislation yet
Last updated 01/03/07
HI
LA
MI
GA
AK
High-water Mark for FranchiseConsideration was 2007
Telecommunications Law
State Franchising Status Today –Majority Preserve Local Franchise
LEGENDState with Franchising Law
Local Franchising – Legislation Under Consideration
Local Franchising – No Active Legislation
Telecommunications Law
Evaluation of Benefits/Promises
Telecommunications Law
$0.00
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
Source:
NATOA
Before State
Franchise
After State
Franchise
Basic Tier
Digital Tier
Failure of Benefits:Prices Continue to Rise
Telecommunications Law
Failure of Benefits: No Change InPrice Slope Post 2006
Source: FCC
Telecommunications Law
Failure of Benefits: ConsumerSatisfaction
• Ninety eight percent(98%) of local regulatorsin state franchise stateswhen surveyed disagreedwith the statement“Customer service isworking better now thanit was before theimplementation of statefranchising.”
Source: NATOA98% Disagree 2% Agree
Telecommunications Law
Failure of Benefits: 2013 AmericanCustomer Satisfaction Index
• Subscription TV industry satisfaction rose from 66 in 2012 to68% approval in 2013, as an industry only newspapers andInternet service providers have a worse industry index score.
• Verizon FiOS came out on top of the rankings for a secondyear, while Charter jumped out of the cellar and over Comcastand Time Warner.
• Call center satisfaction was dismal, with a low, low score of 65— a full nine points below the ACSI average of 74.
• Study anticipates that next year’s Worst Company In Americabracket will be full of cable and Internet providers.
• Source: http://consumerist.com/2013/05/21/comcast-time-warner-cable-bring-up-rear-in-cable-customer-satisfaction/
Telecommunications Law
Failure of Benefits: Jobs
• According to CWA report, even if there were gainsfrom state franchising, the approved deal betweenVerizon Wireless and the big cable companies willcost workers and communities 72,000 jobs.
• Its clear there were no such gains According to the Bureau of Labor Statistics, the domestic
call center industry continues to shed jobs, losing over500,000 since 2006.
According to Bureau of Labor Statistics there were about309,000 “Line Installer” jobs in 1996, but only 269,100 in2010. That’s a decrease.
Telecommunications Law
Failure of Benefits to Arrive: Choice
• New state entrants have not appeared at all, or only toa limited degree in some states (North Carolina), andfor largest entrants, competition is limited to telephonefootprint
• Rural areas are losing wireline even in states withstatewide franchising
• Does state franchising make a difference? Verizonhas entered without state franchises and is expected topass 18 million premises by 2018 - 70 percent of theVerizon wireline footprint
• No state has made any significant effort to enforcebuild-out requirements
Telecommunications Law
Losses That Can Be Documented
Telecommunications Law
Failure of Benefits: 60% of States CutPEG Support
5 States zero out PEG Support
5 States require provider to match Incumbent until franchisehas expired or 2012, whichever is sooner.
7 States require state franchisee to match incumbent orprovide set percentage in support.
2 states provide support in a new format that cannot fit inneat description.
Telecommunications Law
Failure of Benefits: Loss of Centers• Over 100 PEG centers have closed Large majority are public access.
California has lost no less than 51
• Nearly half of PEG centers whoprovided financial information toBuske Group reported an averagefunding decrease of nearly 40percent 2005-2010 20 percent reported in-kind support
has been cut back or eliminatedduring this five-year period
• 165 PEG centers reported that theyexpect elimination or reductions infunding within 3 years
Source: Buske Group Report
Telecommunications Law
ContactInformationBest Best & Krieger
1155 Connecticut Ave. NWSuite 1000
Washington DC 20036Phone: (202) 785-0600
Fax: (202) 785-1234Cell: (202) 664-4621
Website: www.bbklaw.com
Gerard Lavery Lederer
Joseph Van Eaton
