Franchise Battle Heats Up in N.J.

Author:
Publish date:

A formal proposal has yet to surface, but combatants in a New Jersey-style war of words over revised franchise rules are already fully engaged.

Verizon Communications Inc. expects a bill enacting statewide franchises for new-market entrants to be introduced in the lame-duck session of the state legislature, scheduled to begin after elections on Nov. 9.

In anticipation, Verizon and the New Jersey Cable Telecommunications Association are canvassing the state, getting local governments to pass resolutions supporting their respective points of view.

Verizon said it had collected resolutions from 30 communities and groups, from Atlantic City and Perth Amboy to the chambers of commerce representing Paterson and Morris County. Those resolutions support change of New Jersey’s 30-year-old-cable laws and express support for competition and choice in the video market, according to Verizon.

The telco has also set up a Web site, TvchoiceNJ.com, to distribute information. The front page posits, “It’s 2005. Why are New Jersey’s TV cable TV laws still stuck in the 1970s?”

The cable lobby is building its own coalition — New Jersey Communities 1st — seeking members willing to speak out against “Verizon’s quest for special legislation.”

NJCTA claimed Verizon is not explaining to local governments it plans to seek statewide franchising — so calling the resolutions support for Verizon legislation is “patently false,” according to Karen Alexander, the association’s president.

At press time, about 27 communities had approved cable-supported resolutions, expressing concern that statewide franchising would eliminate “meaningful opportunity” for local governments to address local cable needs, she said.

Incumbents are especially concerned about talk in the state capital that a franchise reform bill will increase franchise fees, even in areas where Verizon doesn’t compete. State policy currently applies a 2% franchise fee on basic-cable only.

State cable association spokesman Mark Nevins said cable lobbyists have been told Verizon supports 2% to 4% franchise fees, paid on basic and expanded basic revenue statewide.

“That’s a fairly significant issue,” Nevins said, adding it’s the association’s job to explain the impact of this “new cable tax.”

Spokesman Rich Young confirmed Verizon supports higher franchise fees for local communities, arguing cable-rate savings driven by competition will eclipse the fee increase.

Cable’s assertion that local officials don’t understand Verizon’s legislative aims is “absolute nonsense” and a “smear campaign,” Young added. “Communities clearly understand Verizon supports updating New Jersey’s antiquated plant.”

Related