Official takes stand against cable proposal Federal bill would take cable negotiations out of towns’ hands BY SETH MANDEL Staff Writer JAMESBURG –– A change in the cable television landscape may not be for the better, some local officials believe. A congressional bill, dubbed the Video Choice Act of 2005, would end the current system that allows cable television providers to strike franchise agreements with individual municipalities. This, according to an aide from the office of U.S. Rep. Marsha Blackburn, who sponsored the bill in June, would force cable providers to offer service to individual customers, thus creating more competition in the industry. Jamesburg officials are wondering if the consumer would really be the winner in the end, or if it would be the new cable companies, now able to break into the market, that would benefit. Councilman Chris Maloney said the bill would eliminate municipal negotiations with cable companies, but would offer towns the same amount of revenue they receive now. “So, from a municipality’s point of view, what that means is, we’re losing our right to bargain, and we’re not getting anything in exchange, like a higher cut of the revenues,” Maloney said. Currently, cable service providers must have a franchise agreement with a municipality in order to serve that town’s residents. This gives a town leverage in negotiations, which often results in benefits such as a local cable access channel. In return for the ability to provide cable service to the entire town, the provider will give the municipality a percentage of its annual revenue from that town. The Video Choice Act would not guarantee fringe benefits, nor would it require new providers to provide the town with an increase in revenue. “My personal opinion is I oppose that, because we’re giving up a lot, and we’re getting nothing to make up for it,” Maloney said, adding that it is unlikely the bill would create new customers. “So it ends up being a bad deal for the towns when all is said and done.” In a letter to colleagues asking for support for the bill, Blackburn called the laws governing the delivery of television programming “outdated,” claiming those laws are responsible for the stifling of competition. Blackburn’s aide said that a provider, under the proposed legislation, would have to pay the same franchising fees cable companies provide now, and would be required to provide a local access channel wherever one currently exists. The difference, he said, would be that providers would not have to negotiate with thousands of franchising authorities, just the individual customers. When the cellular phone industry was being formed, he said, the federal government did not tell the cellular carriers whom to serve; the companies simply went where the market was. However, cable companies, under current laws, can be the only game in town — which is both unfair to service providers and their customers. There is another piece of proposed legislation, however, that Maloney said could be more beneficial to consumers. That bill would allow cable companies to negotiate a statewide franchise agreement, and in return, that company would pay as much as double the current franchise fee. “So, there’s some trade-off being made there,” Maloney said. “And for the municipalities, what it means is that they’re exchanging their right to bargain and getting things like public access channels, and instead what they’re doing is they’re getting more revenue.” Jamesburg currently has a municipal franchise with Comcast. Verizon is pushing for the legislation that would allow for state franchises, and is offering to double the revenue percentage that towns now receive in New Jersey. Maloney believes the Video Choice Act, on principle, is a good idea, but it just doesn’t offer the benefits that a statewide franchise agreement would. “My personal take is, because Jamesburg does not really have a lot in our franchise agreement — we’re just not big enough to go ahead and get things like a dedicated public access channel –– there’s not much of a disadvantage to us to a statewide agreement that gives a higher cut of the revenues,” Maloney said. Both bills have faced some opposition for a loophole that would allow for red-lining — the possibility that service providers would pursue franchises with the most affluent communities first, leaving customers in other areas without the market competition that the Video Choice Act aims to provide. While the danger of red-lining is there, Blackburn’s aide said, the Video Choice Act ensures eventual competition, which would lead to lower rates and better service for customers. Unless something changes, he said, customers may never be offered such competition. Blackburn’s letter warned that current laws would crush competition. “All of our constituents deserve more options,” the letter said. Maloney said that until he can be sure the borough’s residents will benefit from the legislation, the borough should stand opposed to the bill. A state franchise, such as the one Verizon would like to negotiate, would leave consumers with the same service but with more money in their pockets, an offer the Video Choice Act just cannot make.