N.J. Video Franchise Proposal Draws Verizon, Cable Ire
A N.J. lawmaker’s proposal on statewide video franchising has irked both Verizon and the state’s cable group, who are often opponents on regulatory issues. At issue is whether the bill, whose backer hasn’t made its text public, would help or hinder the Bell’s entry into the market for selling video and other services that compete with cable operators. What’s clear is that, as expected, N.J. will be the next battleground over franchise legislation (CD Aug 18 p6).
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The bill has backing from Assemblyman Wilfredo Caraballo (D), chmn. of the Telecom. & Utility Committee, said industry officials familiar with the situation. Caraballo has sent the bill to the panel, but it still needs approval to be passed along to the legislature, said a person familiar with the process. The bill would phase out municipal franchising, a move Bells generally have supported, a source said. The bill isn’t in its final form, the person said. Caraballo and officials with his office didn’t return our phone calls and e-mails.
Any such bill’s most incendiary element is likely to be its treatment of buildout of video service, a cable consultant said. “The real issue is redlining, whether the bill includes provisions on redlining and requiring a full buildout,” said Steve Effros, former Cable Telecom Assn. pres.: “That’s really the fight here, not who gets the franchise. The telephone company likes to make this sound about speed to market, but that’s nonsense.” Municipalities have authority to require full buildouts of a cable system “over time,” the FCC said in preliminary findings in an inquiry on the franchising process (CD Nov 4 p1).
Verizon should secure individual franchise deals, said the N.J. Cable Telecom Assn. (NJCTA). Verizon has sought statewide franchising as a way to speed its entry into the video market. Along with SBC, it won approval by Tex. Gov. Rick Perry (R) earlier this year after a battle in that state’s legislature (CD Sept 8 p10). But Verizon said it’s wary of Caraballo’s proposal. “Effective franchise reform benefits consumers by speeding choice for cable TV services,” said a spokesman in a statement. “Unfortunately, the bill as proposed increases the barriers to entry for a company like Verizon, which would only delay” customer choice, he said. The spokesman declined to comment on how the bill could hinder video services sales.
NJCTA said telecom should “respect local control” of franchising. “We learned recently that statewide franchising legislation has been proposed for introduction in the general assembly,” said NJCTA Pres. Karen Alexander in a statement to us. “Caraballo has stated his intentions in this regard on many occasions. We continue to believe that if the phone company wants to provide TV service it should… work with municipal officials to secure local franchise agreements as cable providers do and have done for years.” Comcast, N.J.’s largest cable operator, has about 1.4 million subscribers. Verizon had almost 3.5 million residential access lines in the state as of Sept. 30. - Jonathan Make