Since Texas first voted in 2005 to move franchising from the hands of those closest to the subscribers, local elected officials, to the hands of those chronically overburdened, state officials, potential competitors have successfully touted the benefits of such a transfer of power in more than 20 other states. The constant refrain is that state regulation will lower rates, speed entry of competitors and spur investment.
But another survey was released March 6 stating it just ain’t so. Granted, the survey was conducted among those most opposed to the power seachange in the first place: the local regulators. But their results aren’t even close to ambiguous.
The survey by the National Association of Telecommunications Officers and Advisors collected input from 139 local franchising authorities. They represent 10 million cable subscribers, roughly 15% of the nation’s cable homes.
In those markets, 95% of respondents said they have seen no drop in rates. In fact, rates by the incumbent providers have risen an average of $1.12 for basic cable service and digital service has increased $1.51, according to the group. That might be attributed to the failure of the second part of the pro-state regulation argument: a speedy entry by competitors. The survey states that 35% of respondent LFAs report that new franchisees have built nothing. Another 48% report that the new provider has built to only part of the community. Only 18% say the new entrant has built or intends to build the entire franchise area.
Oh, and those local deals with incumbent operators that included requirements like institutional network construction, school connections and other local benefits? Gone, in 33% of the respondent communities, for the local operators have taken advantage of the state law to operate under less cumbersome state regulations. That’s good for the operators, but a loss for local communities and subscribers.
Consumer complaints have not gone away, either. Local officials no longer get the "there’s no option to this gawdawful incumbent operator," but they still get calls about billing, uninformed remote call center operators, unanswered phones and rising feesNATOA executive director Libby Beaty concedes the bills, and their implementation, are still new, but adds that only time will tell whether the benefit scale tips more toward consumers, or the multi-million dollar corporations on both sides that lobbied for the bills
I think we can all guess the ultimate verdict. I know my bill in California hasn’t gone down due to the implementation of state regulation and there’s no sign on the horizon of Verizon or AT&T riding to the rescue in my middle income college town. I’m not holding my breath for them, either.