"One Ringy-Dingy…!"
Do you remember Lily Tomlin playing the telephone operator who told her disgruntled caller, "We don't have to care we're the phone company!" This was followed by her sarcastic, snorting laughter. Well, the phone companies are about to demonstrate their disrespect for local communities again as they rush to enter the lucrative digital video program delivery business formerly known as cable TV. And nobody's laughing!
As the Friday, November 19, 2004 Boston Globe reported, "Large U.S. phone companies such as SBC and Verizon Communications Inc have several efforts underway to break into the $54 billion U.S. market for video services, as cable companies such as Comcast Corp. move into Internet and telephone services."
Why should you care about this? Won't it mean more competition for the cable operators, and, therefore, lower prices? And how will it harm local communities? These are not easy questions to answer. Permit me to oversimplify!
One Ringy-Dingy:
The "Plain-old-telephone-service" (POTS) companies are regulated under federal law at the state and federal level.
Two Ringy-Dingies:
Cities like Newton have not exercised regulatory control over POTS companies as they have over cable TV operators like Comcast and RCN, also under Federal law.
Three Ringy-Dingies:
If POTS companies can now sell you HBO and CSPAN without paying "rent" for their use of Newton's public right of way; the way cable companies do guess what? Cable operators will want to stop paying the local fees as well. These would-be competitors will suddenly be full of the milk of corporate kindness for each other as they explain to Congress that such "burdensome local fees" discourage the deployment of new technologies.
Before the fans of "less government" chime in with the refrain that, indeed, local regulation should not be allowed to hamper the march of technological progress, let's examine the basis upon which local cable license fees are collected from cable operators such as Comcast and RCN.
First, know that cable license fees are capped at 5% of a company's total annual gross revenues locally. Your local cable operators will likely gross over fifteen million dollars in Newton alone this year. As they say, that's a nice piece of change! And they use Newton's public right of ways over and under its streets and other public property – to earn that revenue from Newton cable subscribers. Just as you would expect a luncheonette in City Hall to pay rent for the space to the City, is it so "burdensome" to expect a private cable company to reimburse the City something for the use of public property?
Congress, long ago, relieved the public utility POTS companies of local regulation in order to assure this vital lifeline telephone service be readily available to everyone. But cable TV is not a vital lifeline service, nor is digital video programming when delivered over a phone line.
Newton has a City ordinance requiring any company delivering video programs by means of a cable or fiber placed over or under the public right of way to pay a fee for this privilege to the City. For decades now, cable operators have paid their fair share for the use of Newton's byways to earn a profit. Telecommunications giants should not expect to gain this privilege for free when delivering identical or similar video services over their "phone lines."
Like cities and towns throughout the country, Newton has not simply collected cable license fees and let these funds lie fallow. It has used these resources to develop the state-of-the-art facility and organization that is NewTV. For every dollar of these funds provided by the City, NewTV has never returned less than $1.25 in free services and facilities for all Newton residents, and in many years a great deal more.
As to the question of what this all means to you, the NewTV member reading this, if the POTS companies are allowed to sell you video services without paying a fair rent to the City of Newton for use of the public right of way, it may eventually mean only one thing for NewTV: Game Over!
If you believe NewTV provides a valuable community service, why not share your opinion on this topic with our representatives in Washington, and let them know you don't think the phone companies should be allowed not to care. Give them a call!
One Ringy-Dingy…