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FCC Brings Video Debate to Texas

KELLER, Texas -- Are small town politics killing your television?

That's the question being carved up here, as the Federal Communications Commission (FCC) released its 12th annual report to Congress on video competition at the Keller Pointe Community Center today.

In a crowded room, the Commission entertained a plethora of views on the controversy surrounding video franchises and the documents that give a company official permission to provide video services to a specific municipality.

Even though phone company video deployments are well underway in posh neighborhoods nationwide, whether or not a federal or nationwide franchising system should be employed is a hot one as it could potentially make it easier for companies of all sorts -- phone companies, Internet companies, utilities, dress shops, etc. -- to be video service providers and compete for consumer entertainment dollars.

To do that now, a company has to meet with the city government of each location where it wants to provide service -- a process the phone companies say is "tedious and unnecessary."

Funnily enough, all the companies and parties in attendance -- including representatives of Verizon Communications Inc. (NYSE: VZ), AT&T Inc. (NYSE: T), and Charter Communications Inc. want more video competition for American consumers, though that competition invariably risks watching one's profits evaporate over time.

But what no one could agree on is: What should the FCC do first in order to encourage video competition without swinging the rules too far in favor of the incumbent video providers?

Fort Worth Mayor Michael Moncrief touted Texas Senate Bill 5 as a model the rest of the nation could use when handing out video franchises. (See Even Video Is Big in Texas.) Moncrief says Senate Bill 5 "was cussed and discussed" by all sides so as to allow for quick market entry without cheating cities of their franchise fees, rights of way revenues, and "social obligations," such as public access TV channels.

Texas was the first state to allow a state-issued video franchise, which allows video providers to cover more territory with one regulatory hurdle. But Senate Bill 5 also allows new entrants to selectively build services to just the neighborhoods they want to reach as opposed to everyone in a given city or town, and that's become a burr in some people's saddles.

Verizon's Senior Vice President, Video Solutions, Marilyn O'Connell, isn't one of those people. (See Verizon Sets TV Precedent.) She cheered a state or federal franchising system because "our experience so far has shown us that the local franchising process is a major barrier to entering the video market on a wide scale."

AT&T had the most hard-to-follow point of view in the discussion, claiming it is exempt from franchise agreements. Even so, the RBOC wants the local franchising system scrapped in favor of a national policy.

The company believes it is exempt from local franchise agreements because its proposed service is IP-based. (See SBC Eyes Alamo City for Video.) "AT&T is not building a cable system," said Lea Ann Champion, the company's senior executive VP of IP operations.

Still, "to build these networks, we have to engage with cities routinely" Champion said. During that process, Champion mentioned that AT&T has received flack from local officials who won't grant the RBOC the rights of way it needs to build out its network unless it agrees to a local video franchise.

In favor of local franchising was Lori Panzino-Tillery, the division chief of franchise programs for San Bernardino County, Calif., who blamed the phone companies for the franchising process taking so long, stating that they are asking for too many exceptions to the rules. "Providing certain potential franchisers with advantages that their competitors don't enjoy is not competition; it's favoritism," she said.

The cable side of the discussion was represented ably by Daniel Brenner, senior VP for law and regulatory policy for the National Cable & Telecommunications Association (NCTA) and Joi Philpott, corporate VP of government affairs and franchising relations for Charter.

Brenner offered the view that the local franchising system was working in that it could allow video competition while making sure local communities weren't getting the shaft. He pointed to Keller, Verizon's first FiOS city, as a prime example. "This is a community that managed to introduce a video competitor without any changes to federal or state law," Brenner said.

Philpott took a shot at Verizon saying that it was direct broadcast satellite (DBS) companies' market entry that forced Charter to lower prices -- not Verizon's FiOS. "DBS has a 26 percent penentration into Charter's national footprint."

Brenner thought the FCC should pay more attention to pre-existing phone monopolies and not focus so intently on who's dominating the video landscape: "The future of video competition will be all about the bundle. And in examining competition there I urge a focus on the one part of the bundle that is still dominated by an incumbent provider -- wireline phone service."

Chairman Martin, however, backed Brenner down when he pointed out through questioning that a CLEC doesn't have to provide phone service to every home just the incumbent phone company.

"So, do you think that's a fair approach, or an arbitrary and unfair approach that they don't have to serve everyone?" Martin asked. His point: Just because phone companies are big corporations with deep pockets, they're still the video services equivalent of CLECs and shouldn't be forced to build services to every home.

While Martin ran the meeting with an iron fist in a velvet glove, it was Commissioner Michael Copps who stated the obvious more plainly than any of the assembled dignitaries, save Mayor Moncrief. As he noted that cable prices continue to rise -- and there aren't that many alternatives for most consumers to turn to, Copps groused: "I know two things. First, consumers are feeling the pain and paying the cost and not liking it. And, secondly, we need to better understand what’s going on here."

When noting the many conflicting reports about whether local franchising is a barrier to video competition, Copps said the panel, in the months to come, needs to prove their respective cases. "I want to know what the specifics are and where the problems have been," he said.

The scary thing about Copps' request is that the phone companies -- so eager to prove that considering a national video franchise system is valid -- might actually ante up. (See FCC Brings Video Debate to Texas.) As those in attendance cleared the room, an observer chimed in, "...and I'll bet his email box'll be full tomorrow."

— Phil Harvey, News Editor, Light Reading

konafella 12/5/2012 | 4:05:49 AM
re: FCC Brings Video Debate to Texas I don't think the "video vonages" will take off until such a time as quality SD or HD video is compressed to a rate that is less than the typical internet bandwidth of a High Speed Internet service. And guess who controls the rates of the consumer internet pipes ... of course the ILECs and the MSOs.

Today, such a parasitical video provider can't get me a quality singlecast to my HD TV over my DSL line that is capped to 1.5 Mb/s (although it trains to > 7 Mb/s). If I upgrade to 5Mb DSL service, then the ILEC doesn't feel so bad about me jumping to "video vonage" because he's giving me 5 Mb/s (which, of course, is not guaranteed beyond by local CO) and he's upping my bill from $24 to about $50.

There will always be early adopters who make sacrifices to try the cool new Internet video services, but it will be years before such a service will appeal to the non-techy masses.

Watch those who control the pipes to keep a keen eye on video compression rates, and they will be very loathe to increase the standard Internet bandwidth beyond that rate.

QoS fees would clearly be the enabler to unlock more bandwidth.

kf
DCITDave 12/5/2012 | 4:05:49 AM
re: FCC Brings Video Debate to Texas re: "QoS fees would clearly be the enabler to unlock more bandwidth."

I think I agree.

Also, so will download and watch later kinds of services.

That MovieBeam thing sounded cool. Soon as my wife takes her eye off the checkbook I'll sign up.

ph

DCITDave 12/5/2012 | 4:05:53 AM
re: FCC Brings Video Debate to Texas re: "Have you calculated how much bandwidth this might be?"

Might these "video Vonage" plays take off right about the time network QOS fees start becoming a reality?
paolo.franzoi 12/5/2012 | 4:05:56 AM
re: FCC Brings Video Debate to Texas Remember, in the US 100K subscribers is a city of 400K people.

And vonage will not be doing multicast. That is the point.

seven
schlettie 12/5/2012 | 4:05:56 AM
re: FCC Brings Video Debate to Texas "10% - 19.2 Gb/s
20% - 38.4 Gb/s
40% - 76.8 Gb/s"

150 Gbps for 100K subscribers is exactly what European and Asian operators are asking for in 2008 (this figure assumes that most video traffic is multicast, not unicast).
rjmcmahon 12/5/2012 | 4:05:56 AM
re: FCC Brings Video Debate to Texas re: "Given enough time, this, and the metro capabilities, will be solved."

I don't understand how time passing solves these problems. It seems like an incentive problem to me, i.e. treating bw as a scarce resource and milking the existing infrastructure gives the incumbents the most revenue. Time passing doesn't really change that unless I'm missing something.

PS. You need a middleman because some organization has to maintain, upgrade and operate the networks. Also some see the progress in IP technology as part of the challenge because it introduces churn and shortens the lifespan of the equipment, meaning ROIs have to be accellerated.
paolo.franzoi 12/5/2012 | 4:05:57 AM
re: FCC Brings Video Debate to Texas
ip,

Not in a town of 100,000 people I don't. Let me give you the same chart for NYC.

10% - 19.2 Tb/s
20% - 38.4 Tb/s
30% - 76.8 Tb/s

Numbers that are bigger than the entire global network. That would be the Metro network for NYC. So, now the global backbone would need to be about 1,000x that size to cover the entire world with such a service.

All to get another $50/month. Verizon will probably have it dealt with in 2 - 3 years just continuing to do what they are doing. I think on their call they said they were negotiating for 1M lines of Franchising. AT&T says it doesn't need franchising. As to Microsoft...about the time I lose the BSoD.

seven
OldPOTS 12/5/2012 | 4:05:57 AM
re: FCC Brings Video Debate to Texas If you go to CSPAN WEB site you can find two hour streaming video of hearings under;

Senate Commerce Cmte. Hearing on Video Franchise

My city's hearing on franchise renewal was primarily about guaranteeing 'customer service' contacts. The council gets tired of all those calls when the 800 number is not answered. My personal experience supports that is a priority.

OldPOTS

PS Learn the new principles of Telecom!
iponthebrain 12/5/2012 | 4:05:58 AM
re: FCC Brings Video Debate to Texas Seven,

"10% - 19.2 Gb/s
20% - 38.4 Gb/s
40% - 76.8 Gb/s"

Good analysis - yes this is a lot of bandwidth. And, at the current rate of metro backbone growth and data demand, you don't see us being at these speeds in 5-10 years? Lets hope for equipment vendors that I am right. The big question here is this - how long will it take RBOCs to tackle the national franchising problem - whether federalized or local? 5-10 years? Not to mention - how long will it take MSFT to deliver real scalable instant channel change? ;)
iponthebrain 12/5/2012 | 4:05:59 AM
re: FCC Brings Video Debate to Texas "It's not in the incumbants interests to enable video vonages. They probably won't ever build access networks that provide sufficient "open access" bandwidth for such a model."

Given enough time, this, and the metro capabilities, will be solved. At some point, with the arch of progress in IP technology, why do you need a middleman, MSO, IPTV, in the video content distribution loop.
paolo.franzoi 12/5/2012 | 4:05:59 AM
re: FCC Brings Video Debate to Texas
ip,

Have you calculated how much bandwidth this might be? Let me give you thinking about numbers...

So, since everybody is watching their own shows they require uni-cast streams for video.

Now let's say that 20% of these streams are high def and 80% are standard def, with 8 Mb/s and 2 Mb/s per type respectively. This give us an average bandwidth per stream of 3.2Mb/s per TV.

Now let's do a small city of 100,000 people. Today this represents about 75,000 screens (4 people per home average, 3 TVs per home average).

One added factor. The Internet reversed the old 80% local rule to being 80% remote. So, lets use 80% of the total bandwidth required to be at that metro network....

So for (Forumla - 3.2 Mb/s TV * Number TVs * .8)
Simultaneous Viewing % - Bandwidth

10% - 19.2 Gb/s
20% - 38.4 Gb/s
40% - 76.8 Gb/s

That is for video only on a tiny city. Feel free to adjust those numbers any way you want.

seven
rjmcmahon 12/5/2012 | 4:06:00 AM
re: FCC Brings Video Debate to Texas It's not in the incumbants interests to enable video vonages. They probably won't ever build access networks that provide sufficient "open access" bandwidth for such a model.
iponthebrain 12/5/2012 | 4:06:00 AM
re: FCC Brings Video Debate to Texas "The problem with the Video Vonage model is that HBO, MovieBeam, Showtime -- all these channels and dozens more would want to do this. Won't that be a bit of a mess?"

Sure it will. Isn't VoIP a mess today? Just look at the degree of vendors working CPE angles for this very purpose - MSFT, Intel Viiv, and Google. Google wants to clean up the mess and be the new EPG - the portal for direct unicasts to the home.
paolo.franzoi 12/5/2012 | 4:06:00 AM
re: FCC Brings Video Debate to Texas
rj,

I think you can expand that to say that nobody is building such networks. The last mile is not the issue, it is the connection to the metro.

seven
rjmcmahon 12/5/2012 | 4:06:01 AM
re: FCC Brings Video Debate to Texas I'll give the industry more credit than that... if shipping via post were more attractive than using the Internet, the movie companies would be building mailstops, not investing in new technology.

What investments into new technology are you referring to? Have the movie studios signed up to subsidize new distribution infrastructures? Maybe I missed something.

PS. Mailstops exist already so no investment is required for that.
rjmcmahon 12/5/2012 | 4:06:01 AM
re: FCC Brings Video Debate to Texas seven,

I think the point the Moviebeam exec is making is that it's cheaper to datacast over broadcast spectrum than it is to use the internet for distribution of movies. I don't know if it's correct or not but that's the argument.

The point I was trying to make is that the phone companies aren't likely to be cost competitive when it comes to distribtution of quality video such as popular movies.
mrbhagav 12/5/2012 | 4:06:03 AM
re: FCC Brings Video Debate to Texas
Does anyone think that RBOCs do better in getting local franchises in communities where there are more wealthy folks (Southlake, Keller, Plano, etc.)? Or is that just coincidental to where their best fiber assets were already placed?

Its a bit of both. Wealthy communities obviously provide the best markets for "bundled packages", ie, being able to afford $100+/month for voice, video and data. In addition, because of lower price sensitivity and higher quality-conciousness of the demographics, VZ would have higher incentive to spend greater resources to obtain the franchise.

As importantly, wealthy communities have the incumbent MSO and telco by the proverbial cahones in most cases, so for them to disturb the delicate relationship balance with the local providers to the town's advantage would not be terribly distruptive; the market is too good to be ignored by any reasonable competitor. So VZ may have built some fiber already to win over the community and also lock-in the market, making it more difficult for a new overbuilder to justify an additional FTTC/H type network. Their Fios TV service may simply be an enhancement of their existing data/voice services, so franchising may be a formality.

In addition, VZ may be more willing to satisfy the more onerous conditions of the franchise and compete on a level playing field with the MSO...build out to 99.x% of the town including those three McMansions down the 2-mile stretch of rural road (the town council chairman may live in one of them), shell out $$$s in franchise fees to the town, carry local programming including high-school football games, townhall meetings, local events, etc. etc. VZ may also be throwing in free service to the town government, high school and libararies to sweeten the deal.

I don't have empirical evidence to support this, but the marketing costs of new services may actually be lower in wealthy communities. Local supermarkets and retail outlets could be used as marketing and distribution channels (Staples or Whole Foods selling Fios TV!) The costs of telemarketing could be justifiable as well if market pricing is sustainable.

Bottom line, VZ may have little to lose putting on its best front to win these wealthy towns.





DCITDave 12/5/2012 | 4:06:03 AM
re: FCC Brings Video Debate to Texas re: "Mr. Izzard said that with MovieBeam's broadcast system, the cost of delivering a movie was negligible. In contrast, industry executives say sending a movie over the Internet typically costs 50 to 75 cents for a transmission."

I'll give the industry more credit than that... if shipping via post were more attractive than using the Internet, the movie companies would be building mailstops, not investing in new technology.
DCITDave 12/5/2012 | 4:06:04 AM
re: FCC Brings Video Debate to Texas The problem with the Video Vonage model is that HBO, MovieBeam, Showtime -- all these channels and dozens more would want to do this.

Won't that be a bit of a mess?

ph
DCITDave 12/5/2012 | 4:06:04 AM
re: FCC Brings Video Debate to Texas re: "Cable rates are way too high; cable companies are raping people with the costs."

Word choice... Can we just agree that they're charging higher prices and not actually doing that other thing you said?
paolo.franzoi 12/5/2012 | 4:06:07 AM
re: FCC Brings Video Debate to Texas From the Reuters article on Moviebeam: "MovieBeam uses a technology called "datacasting," which broadcasts up to 10 new movies a week to subscribers using an exclusive transmission deal to send data signals over the Public Broadcasting System network."

Sure, does seem odd that it costs more to run it over the phone...err wait they are not using the phone network. If you look at their site, they are using a digital broadcast technology and the box comes with an antenna. Unfortunately, it also requires a phone interface for the return path (i.e. billing).

seven

chip_mate 12/5/2012 | 4:06:07 AM
re: FCC Brings Video Debate to Texas rjmcmahon.
you listen to the New York Times, you are going to hear lies like this:

"Mr. Izzard said that with MovieBeam's broadcast system, the cost of delivering a movie was negligible. In contrast, industry executives say sending a movie over the Internet typically costs 50 to 75 cents for a transmission."

Doesn't it seem strange that it costs more to move bits over wires than it does to physically ship a DVD? Also, if the phone companies want to charge content providers than what will the transmission costs go up to?


Mr. McMahon,
Please grab a dose of reality. Nobody is suggesting you read the Wall St. Journal, but try to find something other than the Communist Expresso as a valid data point reference.

How about a nice Memphis newspaper for balance? Or how about a newspaper from Houston?
rjmcmahon 12/5/2012 | 4:06:07 AM
re: FCC Brings Video Debate to Texas OldPOTs,

No fiber construction going on in my neck of the woods. Though maybe when it finally comes through it will be of the 100Mbs or 1Gbs full duplex variety. I don't really need another TV provider so I probably wouldn't switch even if the phone companies did obtain a national video franchise ;-)

I read an article in the NY Times about Moviebeam and their datacasting of movies. I found the following interesting.

Mr. Izzard said that with MovieBeam's broadcast system, the cost of delivering a movie was negligible. In contrast, industry executives say sending a movie over the Internet typically costs 50 to 75 cents for a transmission.

Doesn't it seem strange that it costs more to move bits over wires than it does to physically ship a DVD? Also, if the phone companies want to charge content providers than what will the transmission costs go up to?
iponthebrain 12/5/2012 | 4:06:08 AM
re: FCC Brings Video Debate to Texas "Does anyone think that RBOCs do better in getting local franchises in communities where there are more wealthy folks (Southlake, Keller, Plano, etc.)?"

In Dallas, the old GTE territory only covers hte more affluent communities (Southlake, Keller, Plano, and parts of Irving).
iponthebrain 12/5/2012 | 4:06:08 AM
re: FCC Brings Video Debate to Texas While all the politcs play out over local vs. state franchises, MSO and RBOCs continue to overbuild data to eventually enable "over-the-top" video Vonage. Akimbo and KyLinTV are time-shifted today but when bandwidth reaches a critical threshold, HBO will just create a new distribution channel and unicast directly to an "over-the-top" STB. So much for worrying about franchises and the billions spent on IPTV buildout.
roybean 12/5/2012 | 4:06:09 AM
re: FCC Brings Video Debate to Texas Me, I am a consumer. Cable rates are way too high; cable companies are raping people with the costs. Quicker deployment from the Bells, the better.

Cell phones, land lines, internet has choices.
TV does not in reality. Allow the Bells to roll out video quicker.

Satellite offers TV; they can not package phone / data. Best that could happen would be the Bell's to continue to support satelite in the rural areas; push Fiber in the towns; have common channels across all services; lower costs.

Thinking the lower costs which is good for the consumer would be "bad" for the local townships is the worst argument / excuse for supporting the current franchise process.

Roll me out my Fios TV !!!
OldPOTS 12/5/2012 | 4:06:09 AM
re: FCC Brings Video Debate to Texas Well I don't like those making money by destroying my services in the 'right of way'. The city does protect that, as it cost them money too when they save money and destroy something. @ least .5 cents per customer.

rjm It has taken 3 months for them to finally splice fibers in front of my house. But lots more subs running around diging more trenches. No service yet!

OldPOTS
paolo.franzoi 12/5/2012 | 4:06:10 AM
re: FCC Brings Video Debate to Texas
Hi, Roybean...I am a satellite company....have a nice day.

seven
roybean 12/5/2012 | 4:06:10 AM
re: FCC Brings Video Debate to Texas Please, just the opposite. Say a city of 100,000 cable subscriber; just received a 25% drop in their monthly cable bill, say averge bill of $60 a month. So for a year that is ($60 * .25) * 12 months * 100,000 people = $18,000,000 not going to the cable company. Of that $18 million, how much is sent to the city / how much is keeped by the cable company ? (sure more by the cable company).

Now, with $18 million in savings, that is $18 million that can be spent on other services and business's in that city. The city could also raise property taxes since thier population has $18 million more in their pockets.

With the extra $18 million, people will just respend it anyway on something else. Why rape / overcharge people for the benefit of a monolopy for stinking TV.

Let them compete for our money.
DCITDave 12/5/2012 | 4:06:12 AM
re: FCC Brings Video Debate to Texas Does anyone think that RBOCs do better in getting local franchises in communities where there are more wealthy folks (Southlake, Keller, Plano, etc.)?

Or is that just coincidental to where their best fiber assets were already placed?

ph
spelurker 12/5/2012 | 4:06:13 AM
re: FCC Brings Video Debate to Texas > Consumers will win big on this, no question. Cities, however, will lose some
> revenues that, for better or worse, they've been counting on for decades.

Also, there's a basic separation of powers question here. The Cities will lose leverage with the RBOCs. When a compny wants to bring a service into a city, the city gets the opportunity to lean on them to fix other problems with existing services.
RBOC: "Hey, I want to run FTTH with IP Video to your citizens!"
City Council: "Not until you get rid of those too-short utility poles you've saddled us with."

The winners: people in high-revenue areas (yuppie apartment dwellers) who will save 5 cents/month on service
The losers: people in low density, low rent areas who will not get service at all, because the RBOCs will "cherry-pick" high-revenue service areas and avoid their neighborhood.

The perks of local oversight are 'nice-to-haves'. Looking out for the interests of the *entire* community is a 'public good' which regional franchises are unable to support.
DCITDave 12/5/2012 | 4:06:15 AM
re: FCC Brings Video Debate to Texas re: "The real question is will the average consumer win or lose?"

Consumers will win big on this, no question. Cities, however, will lose some revenues that, for better or worse, they've been counting on for decades.

ph
chip_mate 12/5/2012 | 4:06:16 AM
re: FCC Brings Video Debate to Texas Fios TV would be nice if it were priced lower than satellite or cable.
Problem is monthly 'rental fee' for the dvr's. Satellite charges around $4/month for the dvr. For a dual disk dvr, Verizon is asking $13/month.
13 x 2 = $26/month in dvr fees alone! That pushes Verizon Fios TV about $5 over satellite and cable.
Too bad they don't understand pricing.
Verizon did the same thing with Voicewing VoIP. They priced it $10 more/month than vonage, etc.

What is my incentive to pay $5 more/month for Fios TV?

Any answers?

Bueller?
stephencooke 12/5/2012 | 4:06:16 AM
re: FCC Brings Video Debate to Texas So, franchising fees on a per town basis or state-wide...?

Put yourself in the RBOC's position. Do I want to pay a bunch of lawyers to tour the state, visiting every little hamlet to present to town councils or would I rather send those lawyers to make much fewer presentations to the state government? Is it worth it for the RBOCs to crack the town monopolies via the state government(s)? From the RBOC side these are no brainers. As has been mentioned the MSO's will fight this tooth & nail.

This sounds so familiar...an MSO equivalent of CLECs perhaps. Throw in VoIP-over-cable and we have two flavours of corporate titans fighting over the same combined marketshare with various rules applying to one side and not necessarily the other. It doesn't matter how you slice it this is, and will continue to be, a very ugly fight.

The real question is will the average consumer win or lose?

Steve.
roybean 12/5/2012 | 4:06:17 AM
re: FCC Brings Video Debate to Texas I live in NH. Multiple townships have Fios data, no video currently offered by Verizon. If there was a state wide franchising license, I am guessing Verizon would love to sell me video also for the install.

State of Mass. has many townships with data, few with video.

I have Fios into my home, I should be able have choice of getting everything I want via that pipe. I am sure alot of people are not switching since Video is not offered; this cuts into Verizon profits, cuts into their ability to deploy faster / return on their investment.

MSO's do not want to see faster deployment is simple to see. They are getting a free ride into voice; Bell's should get the free ride into video.
roybean 12/5/2012 | 4:06:17 AM
re: FCC Brings Video Debate to Texas One, all the local 'perks' from the cable company that local townships receive are basically tax on the cable consumer rates in that township. Cable companies are not giving back profits that they would otherwise keep. Perks are being paid for by your monthly cable bills. I rather see 'less' perks, lower rates.

Second, if a TV video franchise is awarded state wide, the state would have more bargaining power, power in numbers, that would get an overall better deal.

Third, the people that are 'profiting' from the franchise dealings are the lawyers and politicans. This interface between all the local townships could be better handle at the state level, lower costs, fairer to the smaller townships, lower costs in the end. Look at health care; cheaper in quanity.

I want to see quicker competition, more choices, lower prices. MSO's do not.

MSO's needed to go throught the agreements beause they basically entered a monolopy agreement. Townships were basically giving a monopoly license to the MSO's. What % of consumers / townships have choices of multiple MSO's / cable companies. Close to zero. 20-30 years later, technology changes, Satellite, MSO's, possibly ASDL, Fiber, high speed internet, IPTV. Agreement procedures should change also with the times.

OldPOTS 12/5/2012 | 4:06:17 AM
re: FCC Brings Video Debate to Texas "Second, if a TV video franchise is awarded state wide, the state would have more bargaining power, power in numbers, that would get an overall better deal."

We'll in Texas, with a whole lot of subscribers (& markets), the franchises have been granted to cherry pickers and the state has NOT leveraged their numbers to get consessions. All you get is a State limited subsidized service as compared to MSOs. The politicians get the money, campaign funds. But I don't like my bill going up regularly with MSOs & satelite.

OldPOTS
OldPOTS 12/5/2012 | 4:06:18 AM
re: FCC Brings Video Debate to Texas rjm
I forgot to mention that the city sees franchising all comers as a way to get REVENUE without choosing the winner. They attempted to provide VZ an equal franchise agreement, to which Comcast had some initial 'concerns' admist Texas state franchising.

OldPOTS
OldPOTS 12/5/2012 | 4:06:18 AM
re: FCC Brings Video Debate to Texas Here is a contrarian view;

The cities have an investment in providing citizens of assurances of 'right of way' restoration and minimal impact.
VZ got my water and sprinklers. VZ wanted my assurance that I wouldn't go to the city right away.

Besides REVENUE from 'right of way' access the city also gets a lot of public service support. The city relies heavily on city council, planning commission and other televised hearings to satisfy state public notice and education.

They believe they have a citizen's interest in these services from MSOs. And they have a staff to manage and produce the access to two channels.

OldPOTS

BTW I watch the replays when TV gets boring.
rickaty 12/5/2012 | 4:06:19 AM
re: FCC Brings Video Debate to Texas On a related subject, my father lives in a mobile home community (55 or older requirement) in California and Verizon spent months putting in fiber. I guess this kind of location is considered desirable - mobile homes are dense and the elderly watch a lot of TV. But do they have a lot of money ?

Maybe Verizon should have asked some more questions before fibering out the whole community, Everybody in the park gets their cable subsidized as part of the rent fee and only pay $10 month for cable TV. I don't see my father switching.

mrbhagav 12/5/2012 | 4:06:19 AM
re: FCC Brings Video Debate to Texas
"All Politics is Local"

Amen. This is the absolute thruth and the bane of a competitive video provider's existence. The video franchise issue is anything but a red herring. It is in fact one of the most difficult problem that a service provider encounters when it is in an overbuild situation trying to offer triple-play. Notwithstanding the fact that the local MSO may be fleecing the town customers, there is a sense of apprehension at the local government level and Town Council about a new entrant coming in and offering all these funky new services. "Oh my god, what are we exposing our town citizens to?!!"

Remember that the Cable Committee of every town has been dealing with the MSO for decades. It is a love-hate relationship, but a relationship nevertheless. For someone to come in and threaten the balance of that relationship is fairly tricky.

The overbuilder always uses the argument with the Town elders that his service will be better and more diverse. Sure, its a competitive argument. But it comes with a price. The town now expects the overbuilder to reach those areas within the town that the MSO has ignored (for very good reason), and to provide services at a price point that has a "cap", not set by the market and competition. Talk about these and other unreasnable demands from the town that goes against the benefits of having a second or third choice for a video provider in an area. These constraints make the economics of deployment and service difficult and infeasible. The New Kid in Town soon becomes the Brat, or even worse, the Outcast.

To make matters worse, the sources of video content from whom service providers obtain programming frequently ask for a franchise, and even in "standard format" (i.e., looks like a cable TV franchise). This is true even of private video aggregators who sell packages of content to smaller competitive operators. I won't name names, but anyone in this business knows who I am talking about.

It is amazing that Verizon has obtained over 300 video franchises, if it is true. Unless there is a way to obtain state-wide or region-wide franchising, the overbuild model loses scale and steam pretty quickly. This is the death knell of a competitive video business that has national ambitions. Life is too short to deal with franchising on a town-by-town basis; local politics will kill you long before you reach break even.






alchemy 12/5/2012 | 4:06:20 AM
re: FCC Brings Video Debate to Texas Phil Harvey writes:
Or to put it bluntly, they're politicians. Still, I'm curious to see evidence that these local yokels really are slowing up a big company that comes to town promising TV choices and jobs and all the other good stuff that comes with RBOC domination.

Is there someone I should be calling to get a good yarn going about that?


There's another way of looking at this....

The local monopoly cable franchise contract is Santa Claus for every local community. The MSOs give away all kinds of goodies to local schools, police, fire, and town/city administration. Usually, it's a Wayne's World public access channel and small TV studio, they'll often fund staff to broadcast various city and town meetings, free internet and TV to the schools, free internet and TV to police & fire, and free internet to town/city offices. It can also include other goodies like funding parks or recreation.

If a state starts awarding statewide video francises to telcos, the MSOs are going to cry foul and pull the plug on all those goodies they give away to cities and towns. Every state rep will be getting irate calls from local government that will kill off the state granting video licenses. As Tip O'Neil said, "All politics is local."
DCITDave 12/5/2012 | 4:06:24 AM
re: FCC Brings Video Debate to Texas re: "Most of people who sit on these bodies are power craving control freaks who think it is their duty to make life as difficult as possible for those folks unlucky enough to come before them."

Or to put it bluntly, they're politicians. Still, I'm curious to see evidence that these local yokels really are slowing up a big company that comes to town promising TV choices and jobs and all the other good stuff that comes with RBOC domination.

Is there someone I should be calling to get a good yarn going about that?

ph
optiplayer 12/5/2012 | 4:06:26 AM
re: FCC Brings Video Debate to Texas "The franchising issue looks like a red herring to me."

I am guessing that you have never had to interact with your local bureaucrats to make an assertion like this. I will further assert that anyone who has ever had to interact with town government (building commision, conservation commission, historical commision, etc.) will sharply disagree with you. Most of people who sit on these bodies are power craving control freaks who think it is their duty to make life as difficult as possible for those folks unlucky enough to come before them.

I suspect the RBOCs would face the same or worse in each town in which they seek to provide service.
DCITDave 12/5/2012 | 4:06:27 AM
re: FCC Brings Video Debate to Texas re: "The phone companies have to continue to come up with reasons that they can give to the FCC about why they aren't investing in infrastructure."

That's why I was asking. I have spoken with a lot of people who feel that way and it seems the phone companies are giving themselves a PR black eye each time they stall for some regulatory gripe.

The only one that appears to be going full speed ahead is Verizon, but they have been one of the loudest voices in this franchise debate.

Does anyone think Verizon would deploy any quicker if the franchising issue were suddenly a federal issue?

ph
DCITDave 12/5/2012 | 4:06:27 AM
re: FCC Brings Video Debate to Texas re: " I work for a small service provider and the town we wanted to provide IP TV demanded a franchise election, which we had to campaign for and did win, quite handily, I might add. That delayed deployment by several months b/c of town council delays, and we spent some time deliberating and negotiating, trying to avoid the cost (and risk) of an election."

Frank, I'm doing more reporting on this issue -- looking at what problems both sides are having with franchises.

Can you contact me with your story?

ph
frnkblk 12/5/2012 | 4:06:29 AM
re: FCC Brings Video Debate to Texas Yes, it is. I work for a small service provider and the town we wanted to provide IP TV demanded a franchise election, which we had to campaign for and did win, quite handily, I might add. That delayed deployment by several months b/c of town council delays, and we spent some time deliberating and negotiating, trying to avoid the cost (and risk) of an election.

The challenge was that the incumbent CATV provider was the city, and so there was a strong play of 'support local' against us 'outsiders', even though we have provided dialtone for over 50 years.

Frank
paolo.franzoi 12/5/2012 | 4:06:34 AM
re: FCC Brings Video Debate to Texas
rj,

I think it is and it isn't. Cell Phone companies have to get permits to put up towers. Phone companies need right of ways to put in equipment. There are rules around granting them through zoning and planning processes. But Cell Phone companies buy spectrum from the FCC not the cities. Franchising is more like buying spectrum.

On the other hand (and I thought you would notice this), the RBOCs fight for Video over IP to be an unfranchiseable service and that regulations need not apply. They take the opposite stance on Voice over IP. Imagine that.

seven
rjmcmahon 12/5/2012 | 4:06:34 AM
re: FCC Brings Video Debate to Texas The franchising issue looks like a red herring to me. The phone companies have to continue to come up with reasons that they can give to the FCC about why they aren't investing in infrastructure. It was originally the unbundling. So the FCC acquiesed on that. Now it looks like they're making up another excuse with this franchising issue. It's worth noting the same companies were able to work with local governments and deploy cellular networks.
paolo.franzoi 12/5/2012 | 4:06:36 AM
re: FCC Brings Video Debate to Texas
It takes time money and more importantly the potential to require the telco to roll video to neighborhoods that they don't want to upgrade (for example South Dallas).

I know even in the IOCs getting a franchise is an issue. I remember a Next Level Customer called Paul Bunyon Tel not being able to get a franchise a few years back.

seven
paolo.franzoi 12/5/2012 | 4:06:36 AM
re: FCC Brings Video Debate to Texas
Phil,

Just to help clarify this for the readers. The basic position is something like this.

We are delivering an IP data service. That data service does not require a franchise. In fact, that IP data service carries video like that wonderful LRTV that so many customers rave about.

We are also making a content aggregation company. This company will sell bundles of video programming to customers. Content aggregation does not require franchising.

This is a similar debate to the whole Voice over IP thing. But AT&T is hedging its bets. It has seen the FCC impose PSTN-like regulations onto VoIP carriers. It is concerned that the FCC might impose Cable-like regulations on its service.

So, its position: "We don't have to franchise, but franchises should go away" makes some sort of Orwellian sense.

seven
DCITDave 12/5/2012 | 4:06:36 AM
re: FCC Brings Video Debate to Texas Here's what i really want to know...

Is this video franchise thing really an issue -- is it really slowing down network deployments in some places, as suggested in today's meeting?

ph

DCITDave 12/5/2012 | 4:06:36 AM
re: FCC Brings Video Debate to Texas Got it.

And it does make sense.

It's just an odd position to be in at the moment, that of saying you're exempt from franchises, then getting a state-wide franchise in Texas (just in case).

But the meeting did help clear up why they're doing what they're doing.

For gosh sakes, the lady's last name is Champion -- why would I argue with her?

ph
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