Economy & Budget

Congress Could Bust Cable TV Monopolies

Advocates of competition and freedom of choice in cable-television service hailed the Video Choice Act, recently introduced by Senators Gordon Smith (R.-Ore.) and John D. Rockefeller (D.-W.Va.) and Representatives Marsha Blackburn (R.-Tenn.) and Albert Wynn (D.-Md.).

The bill would streamline the complicated cable-franchising process and allow Internet and telephone companies to provide video and television programming.

Currently, consumers can only purchase cable television service from a company that has acquired an exclusive franchise at the municipal level. These cable providers pay a fee to municipal governments in return for monopoly access to municipal territory.

Former House Majority Leader Dick Armey (R.-Tex.), now co-chairman of FreedomWorks, supports the Video Choice Act and has launched a “Choose Your Cable” campaign to promote telecommunications policy reform. “Rather than imposing ever-stricter limits on media content, lawmakers concerned about the quality of programming should instead promote policies that would expand the choices available to consumers,” he said.

If the Video Choice Act passes, cable-choice advocates believe consumers will be able to pick from a wider range of options, including those that offer more local or special-interest programming, more advanced parental supervision options, more interactive educational programs and cheaper prices.

“I am a big believer in the free enterprise system,” Blackburn said. “This is about making new technologies available to more American families. As we have a knowledge-based economy, having a steady stream of information available helps parents educate children and small business owners gather information.”

The National League of Cities (NLC), not surprisingly, is discouraging members of Congress from supporting the bill. “Without a local franchise agreement, many of the important mechanisms that cities use to collect franchise fees, manage their rights of way, and ensure that public interest requirements are met and eliminated,” said Cheryl Leanza, the NLC’s principle legislative council.

But FreedomWorks Vice President of Research Wayne Brough disputes this. “Competitive providers,” he said, “are required to pay the same franchise fees currently paid by exclusive territory cable providers, preserve the rights of state and local governments to manage public rights of way, and require competitive cable providers to provide the same amount of public, educational and governmental channels as currently required.”

Brough points to the hidden tax that cable franchising allows municipalities to impose on their citizens. “Cable franchises offer an easy means for politicians to collect cash without directly taxing constituents,” he said. “It’s not just the franchise agreement either, it’s ‘What have you done for City Hall lately?’ And all these other things they throw into the bid to sweeten the pot for the city.”

“Congress is in a position to act now to update outdated franchising laws,” said Chris Kinnan, director of public affairs at FreedomWorks. “People understand that when you put consumers in the driver’s seat, good things happen.”


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