Franchise Players

posted by Christopher Swope

The U.S. Conference of Mayors is meeting in Washington this week, a convenient two blocks from our perch on the 13th floor. I popped over this morning to hear what they're talking about on telecom issues. There was, as seems usual these days, a lot of federalism fear in the room.

The big issue is about how to handle local television franchises. The Baby Bells, who aren't such babies any more, are rolling out video services to compete with cable TV. The telecoms don't want to pursue franchise agreements with each city they serve, as cable companies have done for years. Rather, they'd like to see franchising on a statewide basis (as Texas passed last year) or wrap a national-level franchise agreement into a re-write of the federal Telecommuncations Act.

The mayors are irate about this, for several reasons.

First, cities collect a good bit of revenue from their video franchises. Second, in return for those franchises, cities often negotiate public-interest perks such as public access channels.

But I sense that their biggest issue is really a matter of regulatory control. Mayors want some recourse when Big Telecom comes to town and digs up roads to lay their fiber optic lines. They don't want to have to go to the state capitol or to Washington to get any resulting potholes fixed.

The session largely turned into a pep rally for the mayors to go lobby Congress. Some highlights:

* Ken Fellman, mayor of Arvada, Colo., said: "We need to remember that a lot of these legislative battles that are going on really relate to profits and the bottom line. Innovation is great, low prices are great, new services are great, but profits are what is driving this."

* Nicholas Miller, a telecom lawyer, likened what the telecoms are asking for to a form of rent control: "If you folks don't stand up and fight now, I promise you the telephone companies will get their rent control law, they will not have a universal service law, and they will turn around and sell your right of way back to you at a very precious price."

* Finally, U.S. Rep. John D. Dingell (D-Mich.), made it clear that he's the cities' biggest congressional ally on this issue: "Be vigorous, very vigorous, because these matters are liable to move fast, are intensely competitive and happen to have an enormous impact on a lot of different people. You don't want to be the last people in line when it comes time to share the goodies."