Conn.: IPTV Isn’t Cable TV

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The commissioners of the Connecticut Department of Public Utility Control have finalized their decision: Internet Protocol television does not meet the federal or state definition of a cable service.

Therefore, a phone company such as AT&T Inc. does not need a cable franchise to do business anywhere in the state.

Despite criticism from cable operators, the state’s attorney general and the Office of Consumer Counsel, the utility regulators concluded Wednesday that IPTV is “indistinguishable from any other form of databyte stream” and not subject to franchise requirements.

OTHERS DISAGREE

The finding runs counter to the assertions of most local governments, a handful of which AT&T has sued in federal court. Those governments, in Illinois and California, believe IPTV is a cable service and have conditioned siting permits for infrastructure upgrades needed by AT&T to deliver video on agreements by the telephone company that it will seek franchises when it is ready to sell TV service.

Anaheim, Calif., allowed the infrastructure permits without the promise of a franchise, but stated the belief that the application of a franchise is a gray area. That city reserved its rights to seek one should the Federal Communications Commission, or a court, deem a cable franchise necessary.

Opponents of the ruling are “contemplating further action” to protect the rights of Connecticut consumers, according to Neal Goldberg, National Cable & Telecommunications Association general counsel.

“The decision grossly misinterprets and misapplies federal law. The decision will let AT&T cherry-pick neighborhoods, leaving what AT&T calls 'low-value’ consumers without access to AT&T’s offering. Two of the five Connecticut commissioners dissented on just these issues,” he said in a prepared statement.

Cable operators, including Cox Communications Inc., Cablevision Systems Corp. and Charter Communications Inc., as well as the New England Cable Telecommunications Association, argued that if AT&T is offering any cable networks or broadcast TV stations via a closed transmission path, that’s a cable service.

PA. BILL COMING

In Pennsylvania, a pair of state senators last week said they planned to introduce legislation that would reform franchising in that state, to speed up competition and lower rates.

Co-sponsor Domenic Pileggi (R-Delaware) said at a press conference that several states have already gone to a statewide regulatory regime and have “seen a major reduction in rates.”

Incumbent cable providers said competitors could enter the market today.

“The current system works, and Verizon [Communications Inc.] and other companies have proven this fact by securing local franchise agreements in many communities throughout Pennsylvania. Verizon would be a more significant video competitor today had it concentrated on securing local franchises in earnest rather than wage public relations and lobbying campaigns,” said Dan Tunnell, president of the Broadband Cable Association of Pennsylvania.

Verizon disagreed.

“The legislation properly recognizes that technology and competition have outpaced current franchise regulations. The bill encourages new competitors to invest in and provide cable television alternatives for consumers while protecting the legitimate rights of Pennsylvania’s municipalities,” William Petersen, Verizon’s Pennsylvania president said.

The bill intends to assign authority to the state Corporation Bureau, which will be charged with issuing operating permits with 15 days. Incumbents will be held to their local agreements unless they and the municipalities served mutually agree to end the pact.

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