Sachs: Cable Must Be Vigilant About RBOCs’ TV Plans

Dec 14, 2004  •  Post A Comment

The cable TV industry should fight efforts by Regional Bell Operating Companies to get into the television business by side-stepping the local franchising obligations that apply to cable. Robert Sachs, president and CEO of the National Cable & Telecommunications Association, made that pitch in a speech Tuesday to the Washington Metropolitan Cable Club.

“Cable operators must be vigilant about plans by phone companies to circumvent the local franchising process to gain unfair competitive advantage,” Mr. Sachs said. Of particular concern to the NCTA chief is a plan by SBC that Mr. Sachs alleged would target the wealthiest customers in the areas that SBC serves.

Cable operators are explicitly barred from that sort of “cherry-picking” or “redlining” by the local franchising provisions in federal law, Mr. Sachs said. “Serving only high- and middle-income neighborhoods is both discriminatory and anti-competitive,” Mr. Sachs said. “If, on the other hand, a phone company wants to obtain a local cable franchise, as Verizon recently did in Beaumont, Calif., and compete on the same terms as the local cable operator, they are welcome to do so,” Mr. Sachs said.

In response, an SBC spokesman said the phone company is planning an initial rollout of a package of integrated voice, data and video services to 18 million subscribers — more than half of its customer base. After three years, the offering is expected to expand to include other company customers.

“It’s not surprising that the NCTA, whose members must face this potent competition, would argue that the new entrants must be saddled with legacy franchise regulations,” the spokesman said.