Seattle drafts new cable TV rules in CenturyLink's favor [telecom]

[Bill Horne]

by Brier Dudley

Once again, the city of Seattle (Washington) is letting CenturyLink
decide how and where digital services will be upgraded on public
property.

At least that's what it looks like is happening at City Hall, which
last week floated a plan to basically give CenturyLink carte blanche
to roll out a new TV service where it sees fit.

http://blogs.seattletimes.com/brierdudley/2015/02/09/seattle-drafts-new-cable-tv-rules-in-centurylinks-favor/
-or-
http://goo.gl/gmffzx

--
Bill Horne
(Remove QRM from my address to write to me directly)

When the men on the chessboard
Get up and tell you where to go
And you've just had some kind of mushroom
And your mind is moving low
- Jefferson Airplane

[Neal McLain]

On Thursday, February 12, 2015 at 11:41:35 AM UTC-6, Bill Horne wrote:

> Seattle drafts new cable TV rules in CenturyLink's favor [telecom]

> by Brier Dudley

> Once again, the city of Seattle (Washington) is letting CenturyLink
> decide how and where digital services will be upgraded on public
> property.

> At least that's what it looks like is happening at City Hall, which
> last week floated a plan to basically give < CenturyLink carte
> blanche to roll out a new TV service where it sees fit.

http://goo.gl/gmffzx

And then:

On Sunday, February 8, 2015 at 11:22:46 AM UTC-6, Bob Goudreau wrote:

> Separately, another valued contributor to the Digest, Neal McLain,
> has wondered about the economics of wired broadband service,
> specifically whether it qualifies as a natural monopoly. My area was
> not a monopoly even before the Google announcement, as TWC competes
> with AT&T (formerly BellSouth, nee Southern Bell) and their U-verse
> service. But I will note that between the time that Google announced
> about a year ago that our area was a candidate for Google Fiber and
> the time they announced we would indeed be getting it, both TWC and
> AT&T started promising significant upgrades to their local
> offerings. In TWC's case, this included upping broadband rates in
> existing service tiers without increasing prices. AT&T has started
> rolling out "U-verse with GigaPower", with speeds an order of
> magnitude faster than plain old U-verse. It seems that there's
> nothing like a little competition, or even the mere threat of it, to
> spur the incumbents to offer better products and prices.

http://tinyurl.com/kujaww7

Wow ... "valued contributor" ... thanks, Bob!

Yes, there are indeed situations where a second -- or third --
overlapping network can be financially viable. Especially if the
local governing body changes the rules to make it easier for the new
entrant.

In the CenturyLink case cited on Bill's original post, the City of
Seattle changed the rules: it removed the requirement that CenturyLink
provide service to the entire city. As Dudley's article notes:

> So instead of requiring cable companies to offer service to everyone
> in their service area, the city would only require them to provide a
> map showing where they opted to build out their service.

I suspect that CenturyLink essentially gave the city two choices:
remove the buildout requirement or "forget it -- we're walking away."
Faced with this choice, the city agreed to CenturyLink's demands.

I also suspect that the city may have relaxed other obstacles,
particularly pole attachment fees, street-opening fees, street-level
equipment cabinet rules, and permitting requirements.

Of course these are just guesses on my part: I have no inside
information about these negotiations. But an article about Google
Fiber, written by the city's former Chief Technology Officer, bolsters
my suspicion:

http://tinyurl.com/ozppm28

And speaking of Google I have a further suspicion: the city may be
laying the groundwork for Google to enter the market with Google
Fiber. The city no doubt understands that if Google ever applies for
a franchise, it will expect the same deal that CenturyLink got.

As Google makes clear in its "Google Fiber City Checklist," it expects
the city create a smooth process for such things as pole attachment
permits ands street-opening permits. Although the checklist doesn't
say anything about buildout requirements, that issue would certainly
come up if Google ever applied for a franchise.

http://tinyurl.com/q2zzxeo

So why don't the incumbent cable TV franchisees sue the city if it
changes the rules to make it easier for new competitors? Even if the
city were to extend the same concessions to the incumbents, the
incumbents would still have a case: their huge sunk costs resulting
from compliance with the original franchise requirements.

Stay tuned. We haven't seen the end of this story yet.

Neal McLain