Dear Wisconsin Legislators:
The 35 cities, towns and villages of the Regional Telecommunications Commission oppose the Plale-Montgomery bill. Here are some of the problems we see.
The justification for this bill is to generate competition among cable and video providers. This is a goal that our organization has fought to achieve for years.
For example, before the high-tech bust we fast tracked Digital Access, a new cable-Internet-phone provider. In six months we had an agreement that was fair for our communities and our cable provider, Time Warner.
In late 2005, we contacted AT&T Wisconsin and began a year’s negotiations for a model agreement that we thought all of Wisconsin’s communities could adopt. AT&T stopped negotiations when they thought they could get a "better" deal from you in Madison. The Pale-Montgomery bill obstructed our negotiations.
Indeed, AT&T could have had a model agreement by mid-2006. Today we would happily agree to the Milwaukee-AT&T agreement. AT&T refuses to talk.
Let us make clear that we want competition to improve service and lower costs for our consumers. We just do not think that this bill accomplishes this goal.
Let us look at why:
Many of our communities use PEG for governmental and educational purposes, servicing those who live in our cities, villages and towns. PEG operates on a shoestring but produces value. PEG is supported by volunteers. Yet the bill forces PEG to "raise" its own funding after three years, according to Senator Plale. This will kill PEG.
The elimination of PEG does not help competition. The modest pass-through costs are by paid by subscriber. What it does is to allow the provider to raise its own rate. This is exactly what Time Warner did when it won concessions from Milwaukee for PEG.
On a different issue, we think that it is fair for new providers to carry PEG once they have reached a certain thresh hold of subscribers and to connect PEG to their system. This is what current providers do.
We want our citizens to receive service on a neutral basis and not based on race or wealth. While the bill makes accommodations, enforcement is inadequate. A weak department, with no consumer experience, has purposely been assigned this task. But to insure non-enforcement, its "budget" was cut to less than $70,000.
The RTC just finished an audit of one of our providers. We are claiming fees that were not paid. Other communities have had success with their audits. The Plale-Montgomery bill restricts our audits. What does this have to do with competition?
The answer is nothing.
The Plale- Montgomery bill is about power in an industry to control and dominate the market. This is bad business and bad government.
The argument also has been made that AT&T will not invest capital or manpower if this bill fails. But reality shows that they are competing now. Moreover, AT&T has no other choice. They have lost 1/3 of their telephone market to cable and VOIP providers. They have no other choice!
On the other hand, Time Warner is investing $20 million in a new building in Appleton and will hire 300 workers over the next five years.
We are also concerned that we have been systematically excluded from this process. Representative Montgomery made clear that the RTC and other municipalities would "not have a seat at the table." As they say, "When you don’t have a seat at the table, you are liable to be part of the meal."
AT&T likes this bill. Our communities oppose it. AT&T- Wisconsin lobbyists helped write this bill. They have hired a battalion of lobbyists, set up a phony advertising campaign and contributed over $100,000 to members of the Senate and Assembly. The members of our organization, the RTC, are all volunteers and local officials. We are not sophisticated lobbyists, nor do we have funds to contribute to your campaigns. We are just trying to keep our rights of way and represent the best interests of our citizens.
These citizens believe that their rates will go down. They are wrong. AT&T has been up front that their current rates are only for promotional purposes. They originally project a 20 percent increase to $120. Now they are projecting an increase of 45 percent to $145.
We ask that you either reject this bill or change it to be in accord with the Milwaukee-AT&T agreement.
Sincerely,
Bob Chernow
Chairman of the Regional Telecommunication Commission
1 Comment
The essence of an item just in from Crain's ChicagoBusiness.com:
The Illinois Commerce Commission has approved AT&T's application to offer video service across the Land of Lincoln, the first statewide franchise to be issued there under new legislation that took effect earlier this year.
While AT&T successfully negotiated a franchise agreement with Milwaukee, it has refused to do the same for the 35 suburbs of Bob Chernow's Regional Telecommunications Commission, or any of the other communities across Wisconsin that have expressed a willingness to sign a Milwaukee-style franchise with AT&T.
As an AT&T shareholder, I can't help but wonder whether refusing to negotiate in good faith with Wisconsin communities, or being willing to support reasonable video competition legislation in the Wisconsin Legislature, wasn't a strategic miscalculation by AT&T management.
Instead, my company hitched its star to the black hole represented by Rep. Phil Montgomery and Sen. Jeff Plale's misbegotten cable bill, a proposal so bitter that Wisconsin lawmakers have refused to swallow it despite tens of thousands of dollars of campaign contributions, hundreds of thousands of dollars spent lobbying and perhaps millions of dollars spent on advertising, all in an attempt to pass a bad bill.
AT&T could have done better for its shareholders, for its employees, and for consumers in Wisconsin by negotiating reasonable, Illinois-style video competition legislation. And management needs to be held accountable for this failure.
Rich Eggleston
Fitchburg