As this site has written about for many years, one of the biggest abuses found in the telecom industry continues to be the way that incumbent cable companies go about threatening lawsuits against cash-strapped cities if the cities allow for another cable company to enter the incumbent’s area.
The cable companies like to reference language found in most franchise agreements called the most-favored-nation provisions. Essentially, these provisions say that new cable companies can’t have franchise agreements that are “more favorable or less burdensome when taken as a whole” compared to the agreement that the incumbent provider has with the city.
Notice that nowhere in these provision does it say that the terms must be equal.
Our latest example of this abuse comes from Lincoln, Nebraska, where Time Warner Cable is objecting to the city giving Windstream a franchise agreement, as Windstream pushes selectively into the TV business. According to Time Warner Cable, it is "entitled to a level playing field" and Windstream is getting a “better deal” than the cable company.
But as the city attorney noted at a recent public hearing, many of Time Warner Cable’s complaints about the Windstream deal do not even make sense.
Time Warner Cable says it is unfair that Windstream will be obligated to provide four public education and government channels while they must provider five channels. What TWC leaves out is that the fifth channel by TWC is about to removed with the cities approval.
Time Warner Cable says it is unfair that Windstream would be required to pay $4 per subscriber every five years to public access capital needs while TWC must provide $200,000 in every five years. What TWC leaves out is that they refuse to provider the number of its subscribers to the city so the city is left to come up with an overall number to charge TWC. Windstream is telling the city how many subscribers that is has in the city area.
Basically, Time Warner Cable is hoping to bog down the city in legal lawsuits that would in turn cause local leaders to not issue the second franchise agreement. We have seen Time Warner Cable do this
time and time again.