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Time Warner Cable and other Texas cable operators are now free from their obligations to Texas towns and cities after winning a victory by default in the U.S. Supreme Court that invalidates local cable franchise agreements across the state.
By refusing the hear a case filed by the Texas Public Utility Commission, the court let stand a lower court ruling that found Texas franchise laws discriminated against cable operators by holding them to local agreements its competitors never had to sign.
At the behest of AT&T, in 2005 the Texas state legislature passed a statewide franchise law that would allow the phone company to apply at the state level for permission to operate its U-verse cable system anywhere in Texas. But the law also compelled incumbent cable operators to remain committed to their existing local franchise agreements until they expired.
The Texas Cable Association, a statewide cable lobbying group, and Time Warner Cable filed suit in federal court challenging the law, winning their case when it reached a federal appears court in New Orleans. The appeals court judge ruled the Texas law discriminated against “a small and identifiable number of cable providers.”
Under the court’s ruling, Time Warner and other cable operators are free to tear up their franchise agreements in cities like Irving, Dallas, and Corpus Christi. In practical terms, the court ruling could allow cable operators to stop supporting local public, educational, and government access channels, reduce franchise fee payments to local communities, and stop providing discounted service to public institutions.
The “statewide video franchise” is a concept heavily pushed by both AT&T and Verizon because it reduces the number of communities phone companies have to negotiate with to provide video service. It also allows company lobbyists to specifically target a handful of state officials that end up with the responsibility of monitoring cable systems in the state. That is much easier to manage than dealing with dozens, if not hundreds, of individual community governments to win permission to serve different areas on different terms.
Unfortunately, critics contend the agreements remove local control and oversight of cable operations, and also cuts into franchise fee payments to local communities, because many states routinely keep up to half of all franchise fees for state government coffers.
The cable operators involved in the case did not blame the state for the provision in the law that kept them “hobbled” under their pre-existing local franchise agreements. Their court papers instead put the blame at the feet of lobbyists for AT&T, which they say has continued to heavily lobby officials to enact policies that disadvantage cable companies like Time Warner Cable in Texas.
Other stories of interest:
- Elmira Spins Its Wheels Negotiating for a Better Deal from Time Warner Cable
- New Yorkers: If the Cable Guy Arrives Late, You’ll Receive a Free Month of Cable Service
- Local Governments Discover Cable Deregulation Leaves Them Powerless to Represent Consumers
- Handing Time Warner Cable an Indefinite Franchise In Return for Wiring Rural South Carolina Towns?
- Verizon FiOS: No Expansion in 2011; Existing Franchise Areas Will Be Completed, But That’s It
I wonder how this will affect service build-outs by TWC in areas that aren’t quite as affluent, now that city franchise agreements, which at times have provisions for wiring these communities, no longer hold much, if any, weight. Maybe TWC (or Charter if you’re in Forth Worth, or Comcast if you’re in Houston, or Suddenlink if you’re in Tyler, Amarillo, San Angelo, Lubbock or another rural community) will continue the way they have, since cable companies seem less likely to “redline” communities than telcoTV deployers, so the cable company may have something closer to a monopoly on those subscribers…
As for PEG channels, what kind of content is on them these days, anyway? Slideshows of public notices or ads (which should be put in a newspaper or posted online anyway)? City council meetings (which should just be streamed online anyway)? Are these PEG channels still being broadcast as analog signals, using up valuable space that could be repurposed for providing faster/more reliable internet speeds? Maybe I’m biased (I’ve never bought for-pay TV from anyone, just Internet service) but if PEG channels aren’t being used enough to justify their place on a cable lineup put ‘em online where everyone can access them and be done with it!
AT&T U-verse made a real mess out of PEG channels by putting them on a bizarre streamed video platform that required customers to load an application, scroll through a ton of communities to find their own, and launch a video stream. Before you could change channels, you had to exit the application.
It was as cumbersome as could be and confused the hell out of people.
You can’t believe the loyalty some people have to local government meetings and access channels. I’m not among them (stream it and leave on demand copies up for access anytime), but cable franchise agreements also routinely require companies to foot the bill for the equipment and training (and even studios sometime).
TWC sparked a firestorm trying to move PEG channels in some Texas cities to digital, which means you would need a box.
This issue will self-correct as companies continue their march towards an all-digital cable lineup. They don’t need to delete analog PEG channels to make room for better Internet — most of these systems are now all DOCSIS 3 capable.
I can see in theory why companies want statewide video franchises, especially when dealing with certain large cities who see franchises as an opportunity for cashing in with “what’s in it for me” thinking, but in reality, I see tons of downsides for consumers because they lose what little level of local oversight is left and companies can apply pressure with lobbyists to a handful of state bureaucrats instead of hundreds of local representatives.
It is also refreshing to see AT&T doesn’t just treat their customers as the enemy… they treat Time Warner and other cable companies the same way.