Telecommunications Law
©2013 Best Best & Krieger LLP
Telecommunications Law
State Franchising: An idea whose
time has past, whose benefits have
failed to appear, but whose dam...
Telecommunications Law
Promises Made in Support of State
Franchising
• Enhanced Consumer Choices
• Lower Prices for Consum...
Telecommunications Law
History of State Franchising
Telecommunications Law
HISTORIC TABLES
PRIOR TO 2005, 10 STATES HAD SOME STATE LEVEL
OVERSIGHT WITH THREE STATES SERVING A...
Telecommunications Law
0
5
1 0
1 5
2 0
2 5
3 0
3 5
2
0
0
5
2
0
0
7
2
0
0
9
2
0
1
1
2
0
1
3
Y e a r
S ta te s p a s s in g
...
Telecommunications Law
Number of States Adopting Legislation
Has Fallen Dramatically
0
1
2
3
4
5
6
7
8
9
2005 2006 2007 20...
Telecommunications Law
ID
AZ
UT
MT
WY
NM
CO
AL
FL
SC
TN
KY
IN
OH
NC
SD
KS
NE
MN
WI
IA
IL
MO
AR
MS
OK
ND
OR
CA NV
WA
TX
PA
...
Telecommunications Law
State Franchising Status Today –
Majority Preserve Local Franchise
LEGEND
State with Franchising La...
Telecommunications Law
Evaluation of Benefits/Promises
Telecommunications Law
$0.00
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
Source:
NATOA
Before State
Franchise
After State
Fr...
Telecommunications Law
Failure of Benefits: No Change In
Price Slope Post 2006
Source: FCC
Telecommunications Law
Failure of Benefits: Consumer
Satisfaction
• Ninety eight percent
(98%) of local regulators
in stat...
Telecommunications Law
Failure of Benefits: 2013 American
Customer Satisfaction Index
• Subscription TV industry satisfact...
Telecommunications Law
Failure of Benefits: Jobs
• According to CWA report, even if there were gains
from state franchisin...
Telecommunications Law
Failure of Benefits to Arrive: Choice
• New state entrants have not appeared at all, or only to
a l...
Telecommunications Law
Losses That Can Be Documented
Telecommunications Law
Failure of Benefits: 60% of States Cut
PEG Support
5 States zero out PEG Support
5 States require p...
Telecommunications Law
Failure of Benefits: Loss of Centers
• Over 100 PEG centers have closed
 Large majority are public...
Telecommunications Law
Contact
Information
Best Best & Krieger
1155 Connecticut Ave. NW
Suite 1000
Washington DC 20036
Pho...
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State Cable & Telecommunication Deregulation

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State Cable & Telecommunication Deregulation at Alliance for Community Media Annual Conference

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State Cable & Telecommunication Deregulation

  1. 1. Telecommunications Law ©2013 Best Best & Krieger LLP
  2. 2. Telecommunications Law State Franchising: An idea whose time has past, whose benefits have failed to appear, but whose damages we see every day. PRESENTED BY Joseph Van Eaton Partner PREPARED BY Gerard Lavery Lederer Of Counsel ©2013 Best Best & Krieger LLP
  3. 3. Telecommunications Law Promises Made in Support of State Franchising • Enhanced Consumer Choices • Lower Prices for Consumers • Better Quality Programming • High Quality (union) Jobs • No Loss of Community Media (claim made in some states.)
  4. 4. Telecommunications Law History of State Franchising
  5. 5. Telecommunications Law HISTORIC TABLES PRIOR TO 2005, 10 STATES HAD SOME STATE LEVEL OVERSIGHT WITH THREE STATES SERVING AS FRANCHISING AUTHORITY
  6. 6. Telecommunications Law 0 5 1 0 1 5 2 0 2 5 3 0 3 5 2 0 0 5 2 0 0 7 2 0 0 9 2 0 1 1 2 0 1 3 Y e a r S ta te s p a s s in g s ta te fra n c h is e le g is la tio n S ta te s C o n s id e rin g le g is la tio n Majority of States Considering Legislation Rejected State Franchising
  7. 7. Telecommunications Law Number of States Adopting Legislation Has Fallen Dramatically 0 1 2 3 4 5 6 7 8 9 2005 2006 2007 2008 2009 2010 2011 2012 Year Numberofstatespassingstate franchiselegislation
  8. 8. Telecommunications Law ID AZ UT MT WY NM CO AL FL SC TN KY IN OH NC SD KS NE MN WI IA IL MO AR MS OK ND OR CA NV WA TX PA ME VA NY CT WV MD NJ VT NH MA DE RI LEGEND State w/ Franchising Law State w/ Legis Anticipated Local Franchising and No legislation yet Last updated 01/03/07 HI LA MI GA AK High-water Mark for Franchise Consideration was 2007
  9. 9. Telecommunications Law State Franchising Status Today – Majority Preserve Local Franchise LEGEND State with Franchising Law Local Franchising – Legislation Under Consideration Local Franchising – No Active Legislation
  10. 10. Telecommunications Law Evaluation of Benefits/Promises
  11. 11. Telecommunications Law $0.00 $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 Source: NATOA Before State Franchise After State Franchise Basic Tier Digital Tier Failure of Benefits: Prices Continue to Rise
  12. 12. Telecommunications Law Failure of Benefits: No Change In Price Slope Post 2006 Source: FCC
  13. 13. Telecommunications Law Failure of Benefits: Consumer Satisfaction • Ninety eight percent (98%) of local regulators in state franchise states when surveyed disagreed with the statement “Customer service is working better now than it was before the implementation of state franchising.” Source: NATOA98% Disagree 2% Agree
  14. 14. Telecommunications Law Failure of Benefits: 2013 American Customer Satisfaction Index • Subscription TV industry satisfaction rose from 66 in 2012 to 68% approval in 2013, as an industry only newspapers and Internet service providers have a worse industry index score. • Verizon FiOS came out on top of the rankings for a second year, while Charter jumped out of the cellar and over Comcast and Time Warner. • Call center satisfaction was dismal, with a low, low score of 65 — a full nine points below the ACSI average of 74. • Study anticipates that next year’s Worst Company In America bracket will be full of cable and Internet providers. • Source: http://consumerist.com/2013/05/21/comcast-time- warner-cable-bring-up-rear-in-cable-customer-satisfaction/
  15. 15. Telecommunications Law Failure of Benefits: Jobs • According to CWA report, even if there were gains from state franchising, the approved deal between Verizon Wireless and the big cable companies will cost workers and communities 72,000 jobs. • Its clear there were no such gains  According to the Bureau of Labor Statistics, the domestic call center industry continues to shed jobs, losing over 500,000 since 2006.  According to Bureau of Labor Statistics there were about 309,000 “Line Installer” jobs in 1996, but only 269,100 in 2010. That’s a decrease.
  16. 16. Telecommunications Law Failure of Benefits to Arrive: Choice • New state entrants have not appeared at all, or only to a limited degree in some states (North Carolina), and for largest entrants, competition is limited to telephone footprint • Rural areas are losing wireline even in states with statewide franchising • Does state franchising make a difference? Verizon has entered without state franchises and is expected to pass 18 million premises by 2018 - 70 percent of the Verizon wireline footprint • No state has made any significant effort to enforce build-out requirements
  17. 17. Telecommunications Law Losses That Can Be Documented
  18. 18. Telecommunications Law Failure of Benefits: 60% of States Cut PEG Support 5 States zero out PEG Support 5 States require provider to match Incumbent until franchise has expired or 2012, whichever is sooner. 7 States require state franchisee to match incumbent or provide set percentage in support. 2 states provide support in a new format that cannot fit in neat description.
  19. 19. Telecommunications Law Failure of Benefits: Loss of Centers • Over 100 PEG centers have closed  Large majority are public access.  California has lost no less than 51 • Nearly half of PEG centers who provided financial information to Buske Group reported an average funding decrease of nearly 40 percent 2005-2010  20 percent reported in-kind support has been cut back or eliminated during this five-year period • 165 PEG centers reported that they expect elimination or reductions in funding within 3 years Source: Buske Group Report
  20. 20. Telecommunications Law Contact Information Best Best & Krieger 1155 Connecticut Ave. NW Suite 1000 Washington DC 20036 Phone: (202) 785-0600 Fax: (202) 785-1234 Cell: (202) 664-4621 Website: www.bbklaw.com Gerard Lavery Lederer Gerard.Lederer@bbklaw.com Joseph Van Eaton Joseph.VanEaton@bbklaw.com

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