Thursday, March 24, 2005

Afflicted With Compromise

It’s just one long hang-over. Or maybe a persistent head cold. Perhaps a nasty bug that made its way into the food chain and now you just can’t seem to shake it. It’s definitely a sickness but not the gotta-go-to-bed falling down kind. Certainly it’s an affliction that at any moment could turn nasty so you need to pay attention to the symptoms and nip them quickly in the bud.

This illness is called “compromise” and it only promises to leave you weak and nauseous at the end of the day.

The President of the Arizona Senate, Mr. Ken Bennett asked the Arizona League of Cities to sit down with the cable industry (read Cox) and hammer out a compromise on the legislation that Cox is promoting that will pre-empt local franchising authorities ability to regulate Cox. Can we all sing Kum Bay Ya?

The particulars of the talks include delaying the implementation of the legislation until July 1, 2007, so any municipality could renegotiate expiring franchises under current federally allowed conditions. An oh-so-generous measure that would allow any city that does not collect the full 5% of gross receipts as allowed under federal law to go up to 4% on renewal. And the provision of two, count ‘em, two PEG channels, without charge mind you, to every little old city that wants them with the caveat that Cox could advertise on these channels.

What a deal! It seems too good to be true! Thank you Mr. Bennett for bringing this offer to the table, what would Tempe, Tucson, Mesa, Phoenix, Flagstaff, Scottsdale and Yuma do without your agile brain and acute business acumen? Only a guy like Bennett, with a degree in accounting, could figure out that 4% is better than 3% and 4% is still better than 5%.

One little question is nagging…what gives these home boys the right to completely ignore federal legislation and just make it up as they go along? The Congress empowered local communities to negotiate franchise renewals as they saw fit within certain parameters, yet here we have another state legislature thumbing their noses at Congress and doing everything they can to undercut their own cities and towns. And for what? Because Cox went back to being a privately held company and incurred a loss last year?

According to the Atlanta Business Chronicle:

“The Atlanta-based company, which was bought and taken private by parent Cox Enterprises Inc. late last year, reported in a 10-K filing with the Securities and Exchange Commission that it had a net loss of $2.4 billion on $6.4 billion in revenue in 2004. In 2003, Cox Communications had a net loss of $137.8 million on $5.8 billion in revenue.”

The Chronicle goes on to report that Cox:

“…recognized an impairment charge of $2.4 billion related to its cable franchise rights.”

How bizarre that the net loss and the cable franchise rights are exactly the same amount, $2.4 billion dollars. Now that’s what I call a “coinkee-dink.”

Lest you worry that these losses might lead to widespread unemployment in the Cox workforce, the Chronicle lists the salaries and bonuses for the top three executives, men who are bravely willing to sacrifice their own welfare for the good of the many.

“President and CEO James O. Robbins made a salary of about $1.3 million and bonus of $813,226 last year, compared with a salary of $1.2 million and bonus of about $1.7 million in 2003. Chief Operating Officer Patrick J. Esser made $700,000 and a bonus of $383,597 in 2004, compared with $615,060 and bonus of $738,072 in 2003. Chief Financial Officer Jimmy W. Hayes made $600,000 and a bonus of $273,998 last year, compared with $574,750 and bonus of $574,750 in 2003.”

Yet somehow from those pesky Arizona cities, towns and villages a compromise must come.

In closing, let us recall the great Charles Sumner who was beaten senseless on the floor of the Senate after delivering his “On The Crime Against Kansas” speech.

“From the beginning of our history the country has been afflicted with compromise. It is by compromise that human rights have been abandoned. I insist that this shall cease.”

Latest report is that AZ munis are not willing to accept the compromise, seems they insist that it cease.

Stumble Upon Toolbar

Monday, March 21, 2005

I Ain’t Got Your Stinkin Phone Service

I thought about titling this one “Let’s Just Stay Naked” in deference to Joan Osborne but worried I might offend. "Naked DSL" is when you can buy just DSL without having to buy phone service. I love that moniker, makes DSL sound forbidden.

FCC v. Consumers…another TKO. But that’s cool, consumers have been taking it on the chin from the FCC for quite some time. We’re used to the broken teeth and the black eyes.

This not so simple act of suspending public utility commission regulations in California, Florida, Georgia, Kentucky and Louisiana that require phone companies to offer DSL separate from phone service is just more of the same old prop-up-a-dying-industry nonsense we’ve all come to love and embrace.

In 1999, Scientific American dedicated its issue to “The Race for Broadband.” It had a comprehensive overview of emerging (at that time) broadband technologies, interviews with engineers and puff pieces on corporate execs, speaking in their own words, about the wonders of their technologies. When I read it I thought “There go the phone companies.”

It’s a confluence of a lot of things. The phone companies sat on their hands while cable ops were rolling out fiber. Now Johnny-Come-Lately to the game, we’re all supposed to feel sorry for them for making bad business decisions that have lost them land-lines, left them wanting in the broadband race and found them floundering in video roll-out. At least Verizon figured out that cell phone service would be a hit.

The implications of this FCC decision go beyond BellSouth’s insatiable desire to keep itself out of bankruptcy. Is the FCC going to follow suit with the cable ops? You can’t get cable modem unless you buy cable? There are actual living, breathing human beings in our great nation who do not want cable television, they are perfectly satisfied with four channels and rabbit ears. I talked to one mother this weekend who told me that they do get modem but not the cable because she doesn’t want her kids watching t.v. all day. Makes sense, I did the same thing with my kids. Even if you don’t have kids some people find paying for 90 channels with nothing on a waste of money.

Today, I spent some time online looking up wireless cards for laptops, dreaming of a time when I could in good conscience plop down eighty bucks a month to get my email while on the road. Will it come to pass that if I want that wireless service I will have to buy the company’s phone service, even if I don’t want it or won’t hardly use it?

Gotta give credit to BellSouth, they’re mixing it up in Indiana and Illinois and various other spots to block municipal rollout of broadband and then in the places where they do provide broadband, they’ve figured out a way to force you to buy their phone service.

I’ve always said “I wish I were a cable company.” Now I’m not so sure. Cable gets a free ride everywhere you turn, but the phone companies…ah the complex romance of the telephone…get hand-outs right and left and still get to stick it big time to the consumer.

Stumble Upon Toolbar