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Cable-Pricing Relief for Va. Could Be on the Way / House to Vote Today on a Bill Identical to One That the Senate Passed Yesterday

Posted on: Thursday, 9 March 2006, 18:00 CST

By JEFFREY KELLEY

Sharon Holman has nothing bad to say about her cable television service, except ...

"I can't afford it, to be honest with you," said Holman, a Richmond resident who pays "half here, half there" on her cable bills. Still, she wants the digital channels and Internet connection of cable.

Prices for Holman and thousands of other tube-watching Virginians could drop and service could improve with a bill meant to spawn cable competition. Today, the House will vote on a bill identical to the one the Senate passed yesterday.

The bills come as Verizon Communications Inc. lays a fiber-optic network throughout parts of the state. The system will allow the telecommunications company to provide video services and compete directly with cable firms such as Comcast Corp.

Verizon backed a bill last year to help it provide video faster than state regulations allow, a move opposed by the cable industry in Virginia. The two sides met for a year and attempted to hammer out an agreed-upon bill.

That didn't happen, and lawmakers settled the differences with compromise legislation that neither side fully embraces nor abhors. Local governments then said the bill needed more municipal and consumer protections, and a few changes were made.

The latest compromise comes at the expense of some control from local governments, fairness among all providers of cable TV and the need for a larger investment from a company wanting to provide TV, such as Verizon.

Verizon's main gripe with the legislation is that it must build out its network to cover at least 65 percent of a locality within seven years. Over time, a city or county can ask the company to serve up to 80 percent of residents.

Verizon Virginia preferred to build its network at a pace it preferred. Company President Robert W. Woltz Jr. yesterday called the build-out commitment a "competitive barrier to entry" - however, he is quick not to complain about the compromise.

Without being required to serve most of the residents in a municipality, as the cable industry has been for years, many argued that Verizon could skip over poor areas. Verizon denied the claim, and the new bills would prohibit the already illegal practice known as redlining.

Verizon has complained that the traditional practice of gaining franchise agreements from every locality it wants to plug into video takes too long at six to 18 months. The bills would allow Verizon and others to strike deals with localities in as little as 75 days.

That prospect worries Del. A. Donald McEachin, D-Henrico, who said yesterday that local governments could lose negotiating power to new cable companies.

Local governments also wanted more public-, educational- and government-access channels, because unknown future needs might require additional stations, said Linda Robinson, Henrico County's legislative liaison. The bills would give localities up to three more channels, with a cap at seven stations.

Cable operators can shut off underused public channels, but the bills would ensure that older stations can't get removed.

Under the bill, if a Virginia locality has at least two cable contracts created a year before July 1, the deals remain.

For instance, in September, Verizon gained a video contract in Fairfax County, where the existing TV provider is Cox Communications Inc. Under the deal, Verizon must serve 85 percent of the county within seven years, and Fairfax - as well as four other Virginia localities with which the company has garnered deals - would be unaffected by the legislation until the contract expires.

Verizon is building its network in Richmond and the counties of Henrico and Chesterfield, as well as areas in Hampton Roads and Northern Virginia.

Virginia Cable Telecommunications Association President Ray LaMura said yesterday that the legislation would make for "a level playing field [that] will enable customers to make the choices, and we look forward to competing."

Contact staff writer Jeffrey Kelley at jkelley@timesdispatch.com or (804) 649-6348.

ILLUSTRATION: Photo

MEMO: GENERAL ASSEMBLY 2006

Source: Richmond Times - Dispatch

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