Money, Money, Money, Money...Money!

We’re getting to be dinosaurs, those of us who lived “Disco.” It was the rhythm, the clothes, maybe even the strobe lights that hypnotized a whole generation into gyrating like fools. Great exercise, said I, when questioned by my hard core rock friends. But the truth is I loved it, every minute, every bass beat, every celebration of excess.

I had no clue that the “Saturday Night Fever” would go on for thirty years.

Then comes Brian Roberts, Disco King Extraordinaire!

“We are delighted to report terrific results for 2004 that include surpassing $20 billion in revenue for the first time in our history. Cable division revenue increased more than 10% to $19.3 billion, and cable Operating Cash Flow increased nearly 18% to $7.5 billion. We generated nearly $2 billion of Free Cash Flow, made strategic investments to drive product differentiation and growth, and returned $1.3 billion to shareholders through our stock buyback program. As we begin 2005, we are well positioned for sustained growth.”

Can’t you just see that silver ball churning above the dance floor while the consumer dances in a drug induced haze clapping their hands, stamping their feet and never knowing their pockets are being picked? Except I think they do know and they don’t like it, but since this is the only dance party in town what are they going to do?

It was great that Sue Buske of the Buske Group (www.buskegroup.com) sent this little Comcast quote to city and county regulators across the country. And she included a link to the report the Big B. gave and the financial tables. It was a real eye opener.

The question is, what is anybody going to do about it? Rate regulation, like Disco, is a thing of the past, it’s frankly become a point of embarrassment.

“Sure, we used to be able to regulate rates. What of it? We were young. We didn’t know what we were doing. We had to grow up…our Uncle Sam showed us the way.”

Like our parents before us, we are committed to the music we heard in our youth. There’s something so right about hearing tunes that make us feel alive and tapping our feet to their beat. It’s not retro or old school, it’s just a reminder of when life was better, maybe a bit sweeter or more honest. Rate regulation, like Disco, was a good time that we cannot reject but must embrace.

Like the Bee Gee’s said “Whether you’re a brother or whether you’re a mother, you’re just stayin alive.” That about sums it up for all those folks who made all those profits possible.

The Sky is Green and The Grass is Blue

Dolly Parton sings a song that tells her man the only way she can get over him is to “pretend that the opposite is true.” She says that mountains are low and valleys are high and rivers flow backward. It’s the “looking glass” approach to life that helps heal her poor broken heart.

That’s an old tactic frequently used by advocacy groups. Call it something it’s not and eventually people will come to believe it is what you call it. The “Progress and Freedom Foundation” is just the latest example of this linguistic sleight of hand.

Who doesn’t want “progress and freedom?”

Think about it. You’re a Congressman from Kansas and you get invited to speak at the “Progress and Freedom” luncheon, why of course you accept, you’re all for progress and you’re certainly for freedom. Besides it’ll look pretty cool on your resume and maybe you’ll get some good press out of it.

In their description of mission, PFF states:

“We believe that the technological change embodied in the digital revolution has created tremendous opportunities for enhanced individual liberty…”

Great! That’s what I believe too!

And then they go on:

“Government has important roles to play in society, including protecting property rights and individual liberties, but its tendency is to reach beyond its legitimate functions in ways that harm consumers, burden citizens and slow progress.”

They further brag that they have managed to bring together brilliant thinkers from five previous administrations to work on rewriting the Telecommunications Act in ways that will promote “Progress and Freedom.” These intellectual giants will lead the “battle for true deregulation of communications markets, including immediate deregulation of broadband services, and forbearance from regulation of wireless communications and the Internet.”

In other words “Get out of our way, local government! You’re impeding progress and freedom!”

Jeff Chester, Center for Digital Democracy, dug up a list of the financial contributors to PFF, it reads like a who’s who of the telecom and electric industries and it includes: BellSouth, Cellular Telecommunications & Internet Association, Cisco Systems, Inc., Comcast Corporation, EchoStar Communications Corporation, Edison Electric Institute, FirstEnergy, Florida Power & Light, Level 3 Communications, National Cable & Telecommunications Association, Nextel Communications, Progress Energy, Qwest Communications, SBC Communications, Sprint, Time Warner, United States Telecom Association, Verizon Communications, Western Wireless, Winstar, Xcel Energy.

The list is actually longer but I got worn out reading it.

Thank God these Einsteins of deregulation have formed this fabulous coalition because they are committed to “explaining the need for lower taxes on telecommunications services, a tax moratorium for Internet commerce and privatization of government-run cable TV and telephone companies.”

I was getting worried there for a minute because I know I am way too stupid to figure this stuff out on my own. My anxiety has been completely eliminated because the “Progress and Freedom Foundation” has come to my rescue!

Yep, Dolly was right, you can pretend the opposite is true and go through life living (or even telling) lies in order to make yourself feel better and get your deregulation goals achieved. And at the end of the day, the only ones who’ll end up with broken hearts will be consumers. But hey, the sky is green!

The Enemy of My Enemy is My Friend

I just love it when the cable ops sing the praises of local cable franchising. Twice in recent weeks, the National Cable Telecommunications Association (NCTA) has come to the defense of municipalities and the issue of franchising. NCTA is lining up with cities as Verizon attempts an end-run around local franchising in Virginia and yet again as SBC tries the same in Texas (and elsewhere). They’re also accusing SBC of planning to redline poor neighborhoods! Something we all know the cable ops would never, ever do.

"Cable operators must be vigilant about plans by phone companies to circumvent the local franchising process to gain an unfair competitive advantage by redlining or any other means," says outgoing NCTA president Robert Sachs.

With that, Sachs proves that even a broken clock is right twice a day. Never you mind the cable ops are the hands down champions when it comes to circumvention of the franchising process (San Jose, need I say more?), it’s just good to have them in the correct camp for once.

SBC counters that cable ops are unfairly competing in their playing field of phone delivery and they too are quite correct. Throw in that cable modem free-ride for good measure and the fur starts to fly.

While these Titans of Telecom wrestle it out, it would be a mistake to get the popcorn ready and just sit back to watch the show. Ultimately these industries could easily figure out a way to cut a back room deal and cities would once again become their primary targets of opportunity.

Which leads us to what is broken about the Telecom Act. It’s weighed too heavily in favor of services and the definition of services and weighed too lightly on occupation of physical space in the Public Rights of Way. And it won’t be long before Broadband over Power Lines throws salt into these gaping wounds.

Rumor has it that cities are looking at definitions which will maintain traditional control over their Rights of Way and encompass all entrants and incumbents regardless of their delivery system. We can only hope that Congress can get their beanie little brains around why that is so important. In the meantime, there’s certainly a good amount of fun and satisfaction in watching these guys go at each other’s throats.