Video Competition Act: consumer blessing or complete burden?

Is the Video Competition Act that was recently signed into law in Wisconsin good public policy that will generate true competition for cable television in the state, resulting in lower prices for consumers? Or was the bill pushed through the state government to accommodate AT&T Inc., and will it become a burden for the state's consumers?

For now, the answers to those questions, of course, depend upon whom you are asking.

Five Wisconsin video service providers  -- AT&T, Charter Communications, Time Warner Cable, AT&T, CenturyTel and Comcast Cable -- applied for statewide video franchises as a result of the Video Competition Act (VCA).

The Video Competition Act was approved by the State Senate and Assembly and signed into law by Gov. Jim Doyle in December.

"Three months ago, Wisconsin consumers had about as many choices for cable service as they had thumbs on their right hand," said Thad Nation, executive director of TV4US Wisconsin, which bills itself as a "grassroots" organization. Its members include AT&T.

"But with the passage of the Video Competition Act, it's looking more and more likely that cable subscribers will have a real choice as to who they get their service from in the near future."

AT&T received approval for its franchise from the Wisconsin Department of Financial Institutions last week. It should be noted that Charter, Time Warner, Century Tel and Comcast are not members of TV4US Wisconsin.

The new law allows companies to apply for statewide video franchises, "eliminating the monopoly" the cable companies enjoyed, Nation said.

If the other applications are approved, Charter, Time Warner, Comcast and CenturyTel will join AT&T in being able to provide their video services to any municipality in the state, "creating a system of real competition that will lower prices, improve customer service, and lead to new and better technologies for consumers," Nation said.

"It looks like the monopolistic reign of the state's cable companies is finally coming to an end, and that news couldn't some soon enough for Wisconsin consumers," Nation said. "With cable prices continuing to rise, Wisconsin residents are due for some much-needed relief. We look forward to additional franchise applications so consumers can take full advantage of the benefits that competition provides."

Robert Chernow, a Milwaukee businessman who is the retired chairman of the Regional Telecommunication Commission (RTC) and the North Suburban Communication Commission, is a long-time advocate for Wisconsin municipalities in their negotiations with large communication corporations.

Chernow has a very different opinion about the impact of the Video Competition Act.

"AT&T and cable have always had the ability to do business in every Wisconsin community. They only needed to apply for a franchise that would not redline and would protect the public's safety. A single model contract could have been negotiated for much of the state. So, to say that the Video Competition Act initiates real competition is false. To state that that there was a monopoly is a lie. It appears as if AT&T and others now believe their own manipulated and phony advertisements.

"Wisconsin consumers will end up paying more, not less, as prices go up. Local communities will no longer have oversight. Even issues like AT&T's dangerous exploding cabinets will be ignored, in my opinion, because the state will allow firms like AT&T to do what they wish. In essence, AT&T bought this legislation through expensive lobbying, false advertising, significant campaign contributions and other manipulation of Wisconsin's legislature. This is bad public policy."

Thank you gentlemen. Both sides are now on the record. We'll check back a year from now and see how we're all doing.