House committee passes compromise cable bill - WMC Action News 5 - Memphis, Tennessee

House committee passes compromise cable bill

NASHVILLE, Tenn. (AP) - Compromise legislation that seeks to provide statewide cable TV franchising is moving in the House with little debate.

The measure unanimously passed the House Commerce Committee on Tuesday after Democratic chairman Charles Curtiss of Sparta had state Comptroller John Morgan address committee members to make sure they understood the bill.

The legislation would allow companies like AT&T Inc. to avoid having to seek hundreds of municipal permits to offer TV service.

It's an amendment to a bill that fell apart last year because of disagreements among AT&T, the cable industry and local governments.

"Every concern that we had last year has been addressed in this legislation," Curtiss said before the vote. "It's a better piece of legislation."

AT&T and other supporters of the proposal say it would allow for more competition for cable consumers. AT&T wants to roll out its U-verse package, which delivers TV content to consumers using the Internet, rather than traditional cable or broadcast formats.

Some committee members on Tuesday expressed concern about how AT&T will provide Public, Education and Government programming, or PEG.

Currently, such channels can be accessed directly like any other TV channel. But under the new AT&T technology, Morgan said consumers will have to go to a certain channel, and then select the desired PEG channel from a list.

"It's the difference of getting it," he said. "This is something ... that requires a couple of extra steps to get there."

There was also concern about the picture quality of the PEG channels under the new system. Morgan said there have been complaints that the picture quality is not good.

"I don't want to look at a picture I used to look at as a kid ... when you had a lot of snow on the TV," said Rep. Charles Sargent, R-Franklin.

Morgan said if the picture quality is different, then AT&T is required "to tell people it's going to be different."

Lawmakers involved in the compromise negotiations, including Democratic House Speaker Jimmy Naifeh of Covington, held a news conference on Monday to unveil the proposal.

Morgan spent about five hours revisiting provisions of the legislation on Tuesday.

One key component is a so-called "build-out" requirement that prevents companies from "cherry-picking" customers by choosing wealthy areas over low-income neighborhoods.

Companies have 3½ years to make service available to at least 30 percent of the households in their franchise area. Twenty-five percent of those have to be low-income. Providers that don't meet the requirements face stiff fines.

For instance, if a company fails to reach its build-out target, then the Tennessee Regulatory Authority could assess a fine of as much as $10,000 a day up to a cap of $2 million. In the case of failing to meet the low-income target, providers could be fined $5,000 total per household, with no cap.

The proposal would also require AT&T and other new entrants to pay a 5 percent franchise fee on gross receipts to the local municipality or county where they operate. Providers must also meet mandated customer service standards of the Federal Communications Commission.

Bob Corney, who handles public relations for AT&T on the issue, said the company for the most part supports the legislation.

"This is a compromise bill," he said. "As with all true compromises, not everyone got everything they wanted."

Gov. Phil Bredesen called the bill "equally distasteful to all parties, which is always a good sign."

"To the extent to which it can really help to improve competitiveness and reduce cable TV rates, I think it will be a very good thing for the state," he said. "I hope it passes."


(Copyright 2008 by The Associated Press.  All Rights Reserved.)

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