The history of the cable world.........................
First, the cable companies requested utility status in 1974 so they could gain access to easements and have access to subsidies just like the telcos. As a mater of fact the Bells were positioned to enter the cable tv business if this happened. This was rejected and the cable co's went to the cities with what became the current franchise process so they could access public property (easements) to place cable. Cable was regulated to a business and not a utility and the bells moved on. TV was not considered a lifeline service.
Second, the cable companies then built into areas with no competition that had a 50% to 70% penetration potential (TCI had an overall penetration of 56%). 30% was needed for payback. They were forced to build in lower density areas through the franchise agreements but were granted the right to recover the installation costs through an added hardship fee charged to the customer.
Third, now the market has an incumbent provider in the cable company so the prospect of a competitor gaining the %30 penetration needed for payback is much harder to justify. The franchises granted back in the beginning doesn't reflect market reality that exists today. That means its time to change them and that is what all this maneuvering is all about.
Fourth, why would an potential competitor consider service in boogerville usa when he could do a solo franchise for industrialgrowthville usa. Industrialgrowthville isn't going to protect or provide services to any city outside their own and with good reason. A state franchise could be used to insure that boogerville is covered at some point down the road if handled right.
Food for thought
marigoldsGainfully employed, finallyPremium,MVM
Saint Louis, MO
said by wstwrdho:That is one of the major problems. Not the state level franchise concept itself, but how the state level franchises are being handled.
A state franchise could be used to insure that boogerville is covered at some point down the road if handled right.
Look at the Iowa law: mandatory buildout only for unserved incorporated areas with no other provider with 250 households per 4000 fiber feet within 4000 feet of existing facilities, and the rules only apply to providers with 500,000 or more access lines (there are 1.2 million households in the state) and 50%+ penetration in the incorporated area.
And the state board has no enforcement powers. The law explicitly states that the buildout clause can only be enforced by the courts.
(This is better than Missouri which has no mandatory buildout at all and forbids any state or municipal entity from creating a mandatory buildout requirement of any level.)
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