Ops, Officials Snag on Ohio Overbuilds

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Ohio cable operators and the state's municipalgovernments have hit a snag on compromise legislation governing the latter's entryinto the video business.

As a result, the industry will throw its weight behind asubstitute bill containing the four key elements that operators and cities have managed toagree on.

"But those aren't enough for a successful pieceof legislation," Ohio Cable Telecommunications Association executive vice presidentEd Kozelek said.

The substitute "Fair Competition in Cable Act"will be unveiled in both the House and Senate this week, as cable tries to preventOhio's 84 municipal electrical utilities from following in the footsteps of Wadsworthand Lebanon -- the first local jurisdictions in the state to launch competitive cableservice.

At cable's insistence, the bill includescost-allocation language that bars cities from shifting the expense of providing municipalvideo services to their electrical utilities.

The idea is to prevent cities from using artificially lowcable prices as a way of luring subscribers away from established operators, Kozelek said.

Under the bill, a city caught allocating costs to aseparate entity would be subject to financial penalties.

"And the only way to find out if they're offeringcable at below fair market costs is for them to have to show their costs," Kozeleksaid.

Officials for the Ohio Municipal Electrical Associationargued that cities should not be required to allocate the total cost of a network to atelecommunications utility if portions of the network are used by other municipalentities.

Moreover, OMEA executive director Jolene Thompson saidcities had become frustrated with cable after repeatedly agreeing to compromises, only tosee the language altered when translated to paper.

Kozelek answered that cable operators had tried to speedthe negotiations by agreeing to drop their insistence that municipally owned cablenetworks be subject to the same tax requirements as their privately owned counterparts.

Nevertheless, there have been some areas of agreement. Fourmutually acceptable provisions in the substitute bill were:

• A clause mandating that cities impose the samerequirements on municipal networks as on private operators. Municipalities failing toimpose equal obligations must remove those same obligations from the incumbent.

• A provision calling for disputes to be settled by anoutside third party, whose decision is nonbinding.

• A requirement forcing cities to provide theincumbent with 45 days' notice before passing an ordinance authorizing constructionof a municipal network or expenditure of public money for a feasibility study.

• A clause requiring that cities create a service fundseparate from all other municipal funds, which can only be used to finance the cost ofproviding cable service.

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