House passes compromise AT&T bill

AT&T is one step closer.

The state House overwhelmingly passed a compromise bill Monday that AT&T says it needs to start offering television programming in Tennessee to compete with the cable industry.

“The Competitive Cable and Video Services Act of 2008” will create a state-issued television franchising process, require AT&T to apply for a franchise and compete with the cable industry.

“This landmark legislation … establishes a state video franchise process for all providers, enhancing real cable TV competition and choice for consumers, sparking broadband deployment, investment and jobs,” said Rep. Steve McDaniel (R-Parkers Crossroads), the lead sponsor on the bill.

The bill passed 93-2 with two lawmakers abstaining after little floor debate and many thank you’s among lawmakers.

The measure still must pass the Senate, but that approval is expected.

The compromise on the legislation was forged and announced earlier this month after 14 weeks of negotiations between AT&T, the cable industry and local government organizations. The parties were brought together at the behest of House Speaker Jimmy Naifeh (D-Covington).

“Every concern that everyone had last year was addressed,” said Rep. Charles Curtiss (D-Sparta), a bill co-sponsor.

The compromise came after AT&T’s efforts to pass a bill creating a state issued franchising process — in addition to the current local issuing system — stalled in 2007 after strong opposition from the cable industry and local government organizations.

As much as $11 million was spent lobbying for or against the legislation on Capitol Hill as well as lobbying Tennesseans through advertisements or public relations campaigns.

Among the bill’s compromises were who and how many Tennessee households AT&T would have to offer video services.

The legislation requires AT&T to provide television programming to 30 percent of its telephone footprint within three-and-a-half years of it inking a state-issued franchise, or roughly 600,000 households.

Of those 30 percent, 25 percent must be low-income.

The low-income requirement targets one of the most emotional arguments against the legislation originally — that AT&T would only target high-income customers.

Rep. Ulysses Jones (D-Memphis) said it was important for him to make sure there wasn’t “red-lining” of lower-income customers.

If AT&T or another telecommunications company with a state-issued franchise is found guilty of “cherry picking” customers, the violator can be fined up to $5,000 for each household.

“That’s pretty prohibitive,” Curtiss said.

In addition, the legislation also provides an incentive for telecommunications companies to extend broadband coverage to rural areas.

For example, AT&T would not have to offer services to at least 30 percent of their coverage area if they provide broadband services to underserved areas or even less for un-served areas of Tennessee.