State-Issued
Cable Franchises
Florida once again has the
opportunity to deliver cable
competition and all of its
benefits to Florida consumers
and businesses. |
Why Does it Matter? |
According to a 2005 Phoenix
Center Study, this proposed
legislation could save Floridians
and business owners an estimated
$400 to $600 million a year in lower
cable prices. Streamlining the
competitive entry process would
give consumers the power to
choose the video provider they
want and create market competition
that would drive pricing,
innovation and choice.
Creating a level playing field in
any sector of the economy is always
a sound business policy. Stifling the
free market by allowing certain
cable providers to benefit from
long-term franchise agreements is
counterproductive to ensuring that
Florida continues to benefit from its
healthy business climate; increased
competition will result in increased
investment in Florida’s telecommunications
infrastructure.
|
In 1984, Congress passed the
Cable Communications Policy
Act. This law established policies
for cable TV franchise provisions
and renewals as well as subscriber
rates. The law prohibited
cable operators from providing service
without obtaining a franchise
from local governments or municipalities.
Currently, most cities and towns in Florida have established longterm
franchises with a single cable provider while there exists no wireline
cable competition. In fact, 98% of markets in Florida do not offer multiple
choices for cable providers.
Nationally, there has been a recent movement towards opening up cable
competition. 16 states are already enjoying the benefits of cable competition.
According to a 2006 report from the Federal Communications Commission
(FCC), “cable prices decrease substantially when a second wireline
cable operator enters the marketplace.” Without wireline cable competition,
cable rates in Florida have increased by 86% since 1995. In a recent poll, 81%
of surveyed Florida voters supported legislation that would allow other
providers to offer cable service.
In 2006, legislation was introduced that would have changed the way cable
franchises are obtained. Unfortunately, the bill was not passed, leaving consumers
once again without choice in this market. Known as the Consumer
Cable Choice Act, this legislation would have transferred the authority to
grant cable franchises from local governments or municipalities to a unified
statewide entity; in this case the Department of State. The bill would have
also established a number of provisions for the operation of statewide cable
franchises, such as customer service standards, franchise fees, and right-ofway
use. These provisions were aimed at improving the level of service to
customers, a common complaint under the current system.
Florida once again has the opportunity to deliver cable competition and
all of its benefits to Florida consumers and businesses. Legislation has been
filed this session to open up competition in the cable marketplace, giving
consumers a welcomed choice of cable providers. This legislation will streamline
the cable franchising process, create a level playing field, and empower
consumers to choose the provider whose service and pricing best meet their
needs. Local governments are also protected under this legislation by assuring
that these entities continue to have oversight over the use of public
right-of-ways, access to revenue streams and local content channels for public
use. Existing cable franchise holders can also benefit from this legislation by being allowed to qualify for state-issued certificates. |
