Callahan’s Cleveland Diary

For months, critics of Senate Bill 117, the state video franchising bill, have complained that the bill permits incumbent cable companies to abandon service to neighborhoods (like the lowest income parts of Cleveland) that they’re now obligated to serve by their local franchises.

And for months, spokesmen for the cable industry have responded with wide-eyed, injured innocence: How can you think such a thing? Of course we would never walk away from our existing customers… why, we’ve already invested in the infrastructure to serve them.

After listening to this softshoe routine from Ohio Cable Telecom Association President Jon McGee in the House Public Utilities Committee hearing three weeks ago, Rep. Mike Foley of Cleveland asked him the obvious question: If it’s true that your members have no interest in using state franchising as an opportunity to withdraw service from any neighborhood, how about putting that assurance into the law — like, with an amendment requiring cable providers who switch to state Video Service Authorizations (VSAs) to continue to offer service everywhere they offered it under their local franchises?

McGee did a fast tap dance around the question, muttering about “changing business plans” and “flexibility” while promising Foley that something could be negotiated.

Now it turns out that at least one cable company — the state’s biggest, Time Warner Cable — is not about to agree to Foley’s amendment and give up its “right to abandon”.

Sources close to the last-minute flurry of backroom negotiation (the bill is scheduled for final markup tomorrow) say that Time Warner will agree to an anti-abandonment requirement only until the end of its current franchises. That’s the substance of the anti-abandonment language included in a package circulated to Committee members by chairman John Hagan on Friday, supposedly reflecting agreements between AT&T and Governor Strickland. Here’s the proposed new language:

Notwithstanding any other rights to the contrary, a cable operator opting under section 1332.23 of the Revised Code to provide service pursuant to a video service authorization shall continue to serve all areas as required by its franchise existing on January 1, 2007, until that franchise otherwise would have expired.

What do those last seven words mean?

In Cleveland, they mean nothing. Time Warner is operating here on month-to-month extensions of a franchise that expired in September 2006.

Ditto Dayton. The city’s last long-term franchise with Time Warner ended last August.

In Columbus, Time Warner’s existing franchise will expire in November 2009, Wide Open West’s ends in 2010, and Insight’s is already expired. So the proposed language would permit neighborhood service abandonment immediately at worst, after three years at best.

Why is Time Warner insisting on language that will allow it to withdraw service from existing customers in Cleveland, Dayton and other communities immediately, if Time Warner has no intention of doing so?

I believe the abandonment (or “digital disinvestment”) potential of SB 117 was raised for the first time on this blog. As I’ve written and testified about it in the last three months. I’ve regularly added some version of the following disclaimer:

We do not believe that Time Warner, Cox, Comcast and Buckeye are itching to abandon neighborhoods they already serve, even if state law allows them to do so – which it clearly will if SB 117 becomes law in its current form. Our concern is not with our cable providers’ current intentions. Our concern is that, in this industry, things change fast, and intentions may change with them.

Well, cancel that disclaimer. If Time Warner refuses to accept an anti-abandonment amendment like Rep. Foley’s, which would require them to keep serving their existing territory throughout the whole ten years of their initial state VSA, then only one logical inference is possible: Time Warner Cable does intend to use SB 117 to abandon some neighborhoods it now serves… and soon.

If some Time Warner or OCTA spokesman reads this and has another explanation to offer, I’d be happy to publish it.

(For more about the shortcomings of the supposed “agreement” between AT&T and the Governor, see Local Voice Ohio.)

This entry was posted on Monday, June 11th, 2007 at 7:16 am and is filed under Community technology, Senate Bill 117. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.