The Jeffersonian: Politicks, Sports, and Culture

Monday, July 18, 2005

Are You A High-Value Customer?

Something you should all be asking yourself. Here's the Express-News article, while the Houston Chronicle editorializes against SB 21 (or as State Rep. Harold Dutton calls it, SBC 21):

Lobbyists for the telecommunications industry have a potent friend in Gov. Rick Perry. He's put special interest telecom legislation on the fast track to passage in the special session, despite a unified protest from the mayors of the state's major cities.

Senate Bill 21 would abolish state regulation of local telephone service and create a state franchise fee for cable operators, phasing out the municipal franchise system as current agreements expire. Verizon and SBC are supporting the bill by state Sen. Troy Frazier, R-Horseshoe Bay, in anticipation of launching Internet television services. Critics point out that at the same time, the companies are petitioning the Federal Communications Commission to classify their planned service as something other than cable television so the companies can elude the strictures of SB 21.

A letter to Frazier signed by the big-city mayors of Texas, including Houston's Bill White, criticizes the bill for providing an escape clause that would allow the two telecom giants to exempt themselves from the bill's provisions. Critics charge that Verizon and SBC pushed the legislation simply to gain an unfair advantage by abolishing local franchises.

The mayors also claim that if local franchise fees are phased out and replaced by a state cable franchise fee, large cities will lose considerable revenue, plus fringe benefits, including cable public access channels and free cable connections to schools and public agencies.

Equally disturbing are the bill's provisions that would allow video service providers to pick and choose in which parts of a city they would install the infrastructure for high-quality, high-speed services. Current law requires all communities to be equally served. The mayors' letter asks Frazier to include provisions that would prevent providers from discriminating against minorities or low-income areas, which most need the reduced prices that come through increased competition.

An SBC investor presentation on its plan for video service, Project Lightspeed, claims that while 90 percent of "high value" customers will be served, only 5 percent of "low value" customers would have access to the service.

A section of the bill states that operators who provide state-of-the-art fiber optics to wealthy neighborhoods have an affirmative defense against charges of discrimination if they offer low-quality, low-speed services to poor areas. The mayors write that "we cannot support legislation that, on its face, allows discriminatory treatment among differing socio-economic areas of our communities."


Despite the objections, the Senate passed its version of the legislation Wednesday, 25-3, and sent it to the House.

It's strange that the leadership in Austin is rushing to pass a bill riddled with problems and guaranteeing unequal access to communication services — a bill by which its primary supporters, Verizon and SBC, do not wish to be governed.

While Sen. Frazier dismissed the mayors' objections as "red herrings," the flawed SB 21 and its House companion give off distinctly fishy odors. Representatives should put the brakes on this ill-considered legislation and take a fresh, careful look at the issue in the next regular legislative session two years hence.

Emphasis mine. The letter that Houston Mayor Bill White signed is the same letter that Phil Hardberger signed. So here's the question again, do you and your extended family and friends, fall underneath the 90% of high-value customers that SBC and Verizon will service? Or will you hope to luck out and be a part of the 5% of low-value customers who will be serviced?