Tennessee Ops Like Utilities Cable Bill

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Tennessee's municipal electrical utilities will be allowed
to offer cable-television service under legislation passed in the closing hours of the
1999 session.

Lawmakers voted overwhelmingly May 27 to approve a
compromise bill ironed out between private operators and the Tennessee Municipal Electric
Power Association.

Although the measure means more competition, operators were
delighted with the strict guidelines the law imposes on towns looking to compete against
incumbents.

"It's looking pretty good for us," Tennessee
Cable and Telecommunications Association executive director Stacey Burks said.

Gov. Don Sunquist is expected to sign the bill.

Cable lobbyists failed in a last-minute bid to amend the
bill to include a public-referendum provision requiring that voters approve all municipal
cable systems, along with a two-thirds majority of the City Council.

"If we don't have a majority of the council, then we
need a referendum. The other way, we would have needed both," TMEPA executive
director Bill Moss said.

Moss called the statute an improvement over a proposal
introduced last year that would have established a pilot program involving a limited
number of municipal electrical companies. That bill eventually went "belly-up"
under intense industry pressure.

Nevertheless, the new law hands cable operators some
clear-cut victories.

It prohibits subsidizing cable with money generated by
municipal electrical utilities, and it requires cable systems to be stand-alone
subsidiaries with their own accounting procedures.

Moreover, cities are precluded from competing against
mom-and-pop operators with 6,000 or fewer subscribers, or in locations where telephone
cooperatives have provided cable service for at least 10 years.

Detailed business plans must be submitted to the Tennessee
Comptroller's Office, and municipal systems must pay the same franchise fees and taxes as
incumbents.

Burks said operators elected to compromise with the TMEPA,
rather than having the issue resurface next year.

"From our perspective, this is the third year we've
faced this issue," she said, "and it's not one we expected to go away. But there
are a lot of strict safeguards in the bill. And [a compromise] doesn't make us seem
anti-competitive."

Moss said the association "was satisfied with what we
got," despite a "lot of restrictions" on municipal electrical-power
providers.

"There are a lot of people who feel like if we need to
jump through hoops to get into these things, then we need to jump through them," Moss
said. "There are two or three communities that have indicated that they're ready to
go as soon as we can get the authorization. We want to offer our customer-owners the
services they want, and we want to do it ourselves. We want to cut our own grass, rather
than paying somebody to cut it for us."

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