Thursday, November 29, 2007

Bang The Drum Slowly

Recently I was told that my naiveté was charming. That despite my worldliness and my often cantankerous disposition, I still believed that people should do the right thing and when they don’t it causes me great disappointment. “Childlike view of the world” was slipped into the conversation.

Anybody else would have been insulted, but not me. I couldn’t dispute it.

It was all those years of Girl Scouts or maybe it was one too many Jimmy Stewart movie or perhaps my strict religious upbringing. God is always watching and when you lie, cheat, steal or otherwise behave dishonestly, some celestial record keeper is checking boxes. Ultimately at the end of the day there will be an accounting, that’s how I was brought up. I’m not sure that’s a bad thing, human beings do need parameters and benchmarks, otherwise there would no social contract, we’d all run amok.

So it begs the question, can corporations or institutions be called to account? Does Comcast have a mortal soul? Is there a Purgatory for federal agencies? Can entire legislative bodies be required to do penance?

The FCC handed down their “2nd Report and Order” on cable franchising and in the weeks that have followed there has been much confusion because while the FCC sought to “clarify” the Telecommunications Act, it just added more mud to the well. I have read the 2nd Order and the 1st Order that addressed telecommunications companies. I’ve read filings in the attendant case before the Sixth Circuit, and I’ve listened to intelligent people, some of them lawyers who do nothing else for a living except telecom law, and there’s a huge amount of “well, we don’t know” “we’ll have to see how it plays out” “we’re waiting for the court to decide.”

The bottom line, with or without the FCC’s guidance, cable operators and their cohort phone buddies, will say or do anything to get over on anybody. That is the corporate culture of those industries. Period. And the only way to deal with them is to come out swinging. Forget negotiating, carry a large stick.

No sooner is the ink dry on the FCC’s rulemaking or the various state legislation (the very rulemaking and legislation that was supposed to increase competition, provide better service and lower prices) and here’s what you get:

  • Verizon announced it’s raising rates 11.5%
  • Bright House announced it was slamming PEG access out of the Basic Tier into the Digital Tier and if people with analog sets still wanted to get it they could rent a converter box for an additional dollar a month
  • Cox customers were told by door-to-door salesmen that if they wanted to receive the broadcast stations, Public television and PEG, they would have to pay for digital because Cox was no longer going to offer Basic
  • Comcast announced it was shutting down its PEG operations in three Indiana towns
  • at&t threatened the state of Connecticut that it would shut down service to its U-Verse customers before it would comply with Connecticut’s statewide franchising process
  • Charter raised its Basic service tier rates by over 40%
  • at&t had a nationwide crash of its U-Verse service (which is not a big deal because they have so few customers anyway)
  • Time Warner applied for a statewide franchise in a community in North Carolina and then stopped service in the portion of the community that was too rural for their taste, leaving those residents with no cable options and no broadband
  • at&t demonstrated to PEG operators how they were going to deliver PEG programming through a layered on-demand system that required about seven clicks of the remote in order to find the channel
  • The Indiana Utility Regulatory Commission published a report that cable complaints had risen 25% since statewide franchising

    This is the short list; I didn’t have time to compile all of the anecdotes. But more insidious than what they have been doing is what they will do under the new FCC scheme.

    For PEG and municipalities, the 2nd Order will eliminate PEG operating grants that have been agreed to in so many franchises around the country. It doesn’t eliminate the ability of municipalities to provide PEG operating funds but certainly takes away those grants that were negotiated in addition to the five percent franchise fee. It is unclear how the ruling will or will not affect the statewide legislation but there are states that required a specific amount to be set-aside for PEG support in addition to the franchise fee. Depending on how the Order will be interpreted in the guaranteed court cases, the Order could turn those state provisions on their head.

    The FCC did not include capital funds as an offset to franchise fees, but that’s hardly a consolation if there are no operations dollars, it’s like having a Cadillac with no one to drive it.

    Commissioner Martin and the majority gave an already glutted cable and telecom industry a lovely holiday bonus, the new Order takes effect on Christmas Eve. So just as the industry will be pouring the champagne, PEG operators will be opening their sacks of coal.

    The evil that has been wrecked on PEG over the past two years does not rise to the quality of evil we witness on the nightly news by any stretch of the imagination, no one has died, no children have starved. But it is an evil nonetheless in that the small sliver of democratic discourse we call PEG access television has taken a brutal beating and in some cases been snuffed out. And for what? More hedonism and excess?

    The time for nashing of teeth is over. The good thing about hitting rock bottom and having nothing left to lose is that it can embolden you. It is time for the industry to get their comeuppance. It is time to restore what has been stolen away, state by state, FCC Order by FCC Order. It is time for a national legislative strategy.

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