CABLE LOOKS TO ‘QUIET’ LEGISLATIVE YEAR IN STATES

Despite waning of interest in open access in states and localities, bill to require cable operators to provide open access to competing Internet service providers (H-6941) has resurfaced in R.I. for 3rd year in row. Measure isn’t likely to go anywhere, said William Durand, exec. vp of New England Cable TV Assn (NECTA). Industry isn’t worried much either about H-6747 that would limit to 12 years duration of franchises given to cable operators. However, measure that does concern cable is H-7901 that would eliminate exemption to cable employees and subcontractors from licensing requirements for telecom installers, he said. Last year, state Telecommunications Licensing Board, which is pushing bill, fined 2 cable subcontractors despite exemption, Durand said. There was no “significant” legislation in Conn., Me., and Vt., he said.

NECTA plans to have bill filed in N.H. seeking repeal of Communications Service Tax on high-speed data, Durand said: “We believe this violates the recently extended moratorium on Internet taxation.” State Dept. of Revenue contends that it’s not taxing Internet, but underlying communication, which he said essentially was line charge that wasn’t unbundled. “We believe the preemption is clear but rather than litigate in federal court, we see a legislative solution that is more efficient both from a cost and time perspective.”

In N.J., as in Hawaii and W.Va., where cable is regulated at state level, there hasn’t been cable-specific legislation since interest in open access has declined in last 2 years. Hawaii hasn’t seen any cable bills in the last few years, said Kit Beuret, acting exec. dir. of cable association. “Since we are regulated at the state level, there is no conflict of interest with state policies that comes with local franchising,” he said. N.J. Cable Assn. Pres. Karen Alexander said that except for bills dealing with franchise fees and municipal entry into cable that are expected to resurface, “we expect it to be a relatively quiet legislative year.” In W.Va., Mark Polen, exec. dir. of state cable association, said no cable-specific legislation had been introduced and “we don’t anticipate any.” He said industry was tracking telephone bills in legislature because of cable’s telephony business.

In Cal., only 2 bills that directly affect cable have been introduced so far. Dennis Mangers, senior vp of Cal. Cable & Telecom Assn., said group was tracking AB-1150, which would require cable to pay market-based rights-of-way rather than cost-based rates, and SB 400, which would require provision of 4-hour service window. He said cable was taking “great deal of interest” in telephone and Internet-related bills “because AT&T and Cox are providing telephony services and have IP aspirations. We want to ensure that the monopoly does not have an unfair advantage.” New issue for cable is privacy, Mangers said, with 35 different bills being debated in legislature. Cable is interested is in making sure that protection of consumer interests doesn’t affect business practices, he said.

Fla. Cable Assn. Pres. Steve Wilkerson said sales tax reform measure S-1744 was mixed bag for industry. While seeking to reduce sales tax for services to 4.5% from 6%, measure would eliminate current exemptions on ad revenue and satellite up-linking and down-linking, he said. Broadcasters and cable are opposed to provisions that would do away with exemptions, he said. Because cable now is diversified, its tax liabilities could go down in some areas and increase in others. Industry also is interested in measure that would reduce intrastate long distance access fees because it would affect cable’s subsidiary CLECs, he said.

No cable-related bills were reported in Del., D.C., Ia., Md., Minn. “There are no major issues,” said Wayne O'Dell, pres. of Cable Assn. of Md., Del. & D.C., but industry is looking at likely fallout of telecom bills HB-61, HB-63 and HB-104 in Md. that deal with issues such as local exchange service quality and interexchange telecom carriers. “Our members are already providing telephony services or plan to do so and these bills can have implications for cable operators if not now, then in the future,” he said.

Most of municipalities’ legislative battles with cable have involved “level playing field” bills that industry seeks to promote, said attorney Jim Baller, who represents cities. Reason for seemingly reduced cable interest in restricting municipal entry could be that issue is being litigated, he said. However, cities are interested in 2 bills in Va. and one in Wis., he said. Cities back SB-245 and companion HB- 1021 in Va. that seek to relax current restrictions on cities’ providing telecom service, he said. In Wis., SB-248 introduced last year, would virtually eliminate competition by municipalities in telecom business, he said. Another issue for cities is “predatory” pricing by cable operators to stall municipal competition, he said.

In Tenn., cable is sponsoring 2 bills on pole attachment rates and open video system franchising. SB-1217 would remove exemption provided to municipalities and electric cooperatives from FCC-regulated pole attachment fees levied on telecom and cable providers and SB-1037 seeks to require providers of open video system to get local franchises like cable. Cable is taking only “peripheral” interest in telecom bills in state legislature because Charter, Comcast and Time Warner have yet to start telephony service, Tenn. Cable Assn. Pres. Stacey Burks said.