Ohio Ops Laud Bill Aimed at Cities

Author:
Publish date:

Ohio lawmakers last week were mulling a bill aimed at
leveling the playing field between cable operators and municipalities that are seeking to
offer video services.

Introduced by Rep. Lynn Olman, the bill is a response to a
national trend that has seen more and more local governments opt to build
telecommunications networks that are capable of competing against incumbent cable
providers.

The proposed legislation drew immediate support from the
Ohio Cable Telecommunications Association, which wants municipal overbuilds to be subject
to the same regulatory and financial requirements as those faced by the existing service
providers.

"If they want to compete against the private sector,
they should be held to the same rules as the private sector," said OCTA
government-affairs director Ed Kozelek.

The city of Wadsworth is currently the only community in
the state competing against an incumbent, having overbuilt its local Time Warner Cable
system. A second municipal overbuild has been authorized in Lebanon, but it must go to the
voters in November.

Meanwhile, there are approximately another half-dozen
cities in various stages of exploring municipal overbuilds, Kozelek said.

The Olman bill would require that in the future, cities
incorporate as either for-profit or nonprofit operations. It would also mandate public
hearings on required feasibility studies before funds are appropriated. And more hearings
would be required before municipal cable systems could ask for additional funding.

"Problems arise when these municipalities invest
taxpayer money in ventures that may never show a return," Olman said, in a prepared
statement.

The bill also requires that cities seek franchises from the
Public Utilities Commission of Ohio, which would be authorized to regulate government
cable-providers.

And most important from the existing providers'
standpoint, the city-owned systems would have to pay the same franchise fees and taxes as
the incumbents.

OCTA executive vice president Carol Caruso said the bill
"deals private and government players an even hand."

"Rep. Olman's bill fairly addresses issues of
accountability to taxpayers," Caruso said. "Across the country, no city has
successfully operated its own system for more than five years without increased taxes or
financial contributions from public funds. Taxpayers should be wary of subsidizing this
kind of risky business venture."

Related