Franchise Reform Is Pro-Consumer

Franchise Reform Is Pro-Consumer
March 28, 2006

Joseph Bast

Joseph L. Bast c.v. Joseph Bast is president and CEO of The Heartland Institute, a 29-year-old... (read full bio)

Dear Editor:

Joe Kollin's story on cable TV reform ["Cable bill under fire in Pines," March 26] was filled with quotes from local government officials complaining the Consumer Choice Act of 2006 would take away their power to tax and regulate. But the article barely mentioned the positive effects the bill would have for consumers.

The Consumer Choice Act would replace local franchises with a streamlined state process. This is necessary for telephone companies to quickly roll-out their new Internet TV services to compete with cable and satellite companies.

Since competition now exists in the video marketplace (or could exist if local governments got out of the way), the original rationale for local franchises has been destroyed. Use of the public rights of way can be regulated without offering monopolies to a single cable or phone company. Communities that have two or more competing video providers typically see lower prices.

Local franchises are one reason why broadband isn't spreading faster in the U.S. Texas, the first state to pass franchise reform legislation (in August 2005), is already seeing new competitors and consumer benefits. AT&T is offering video services in San Antonio. Verizon is already offering its FiOS fiber-to-the-home in suburban Dallas-Fort Worth and says its new fiber-to-the-home network will pass more than 400,000 homes in Dallas-Fort Worth by 2006. TXU has chosen North Texas as the first area to roll-out broadband over power lines.

Telecommunications regulation is complicated, and the Consumer Choice Act contains many details that may be worth discussing and changing. But there's no question the idea of replacing local franchises with a statewide authority is a move in the right direction ... despite the protests of power-hungry local officials.

Joseph L. Bast

Chicago, IL


Joseph Bast (jbast@heartland.org) is president of The Heartland Institute, a 22-year-old nonprofit research organization based in Chicago. His latest policy study on municipal broadband is available online at http://www.heartland.org/PublicationIssue.cfm?pblId=3&pisId=579.

Joseph Bast

Joseph L. Bast c.v. Joseph Bast is president and CEO of The Heartland Institute, a 29-year-old... (read full bio)