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Verizon's Problematic, Misleading Campaign to Change Franchising Rules

ico_11.gifVerizon is targeting consumers with emotional grassroots appeals in its apparent no-expenses-spared campaign to change franchising rules for video service providers. In addition to its stealth backing of a consumer “coalition” employing emotional gimmicks and misleading arguments to advance its agenda, Verizon actually puts its name on another campaign. But this one is no less misleading.

Verizon still implies that cable competition won’t happen unless its statewide franchising demands are met. The fact is that cable competition already exists and nothing is stopping Verizon from providing TV service today.

In Virginia, for instance, where Verizon just launched Fios TV in Herndon, laws have been on the books for years allowing for cable competition on a fair and level playing field. The process is working in Virginia; indeed, it’s the very process that paved the way for Verizon’s franchises granted by the town of Herndon, the city of Fairfax and Fairfax County. No cable operator opposed those franchises. Cox Communications even testified in support of Verizon’s franchise in Fairfax County and commended the fairness of the process.

But while working at the local level to get franchises, Verizon also is working to preempt localities via statewide franchises and, reportedly, a federal franchise. It’s critical to realize that when it comes to franchising, one size certainly does not fit all. Under a statewide franchise, for instance, careful attention would have to be given to ensuring that counties in far-flung locations wouldn’t be disadvantaged and forced to abide by exactly the same franchising rules as more affluent areas of the state. Such an outcome could amount to special treatment that essentially could allow Verizon to cherry-pick select areas of a given state. Already, there is concern about Verizon’s commitment to local communities, given that its Herndon franchise has a three-year out clause – meaning that Verizon could pick up and leave after three years if it thinks its penetration in the town is insufficient.

The most problematic issue with changing franchising rules is that it could easily lead to different regulations for different companies. If Verizon and other RBOCs get statewide franchises, cable companies presumably would still be bound by local franchises – creating an unwieldy patchwork of cable approaches across a single state that would be confusing and detrimental for localities and consumers. It would force localities to regulate two operators with different sets of regulations (one that must follow customer service and construction standards and one that wouldn’t have to).

Competition is good for consumers. But granting special franchising privileges that create disparity among providers won’t aid competition, as Verizon and other RBOCs often claim. It would create a playing field slanted distinctly in the companies’ favor, and heap the resulting complications on unwitting localities and consumers. Consumers should be allowed to choose technology winners and losers; regulatory advantage should not.

Posted on December 22, 2005 09:09 AM | Comments (0)

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