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AT&T cable deal to be unveiled

By: Andy Sher
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Gerald McCormick

NASHVILLE — Months of bare-knuckled, behind-the-scenes negotiations are expected to end Monday as top legislative leaders roll out a compromise that lets AT&T offer television services statewide.

“That bill will be before the Commerce Committee next week,” vowed House Speaker Jimmy Naifeh, D-Covington, who more than three months ago forced the warring parties — AT&T, the cable industry and local governments — to come together and start negotiations.

The deal is expected to let San Antonio, Texas-based AT&T jump-start its entry into the cable business and bypass current requirements that put control of franchise agreements in the hands of hundreds of city and county governments.

AT&T, which last year whisked through similar statewide franchising legislation in states such as Georgia, plans to offer its U-verse technology and provide cablelike television programming and special features to Tennesseans.

“We’re in the final stages,” declared House Commerce Committee Chairman Charles Curtiss, D-Sparta, who credited Rep. Naifeh’s role for movement on an issue that virtually paralyzed Rep. Curtiss’ committee last year.

“There’s not any question in my mind (on) Monday we’re going to have an amendment worked out and ready to present,” Rep. Curtiss said.

A news conference has been scheduled for 2 p.m. CDT.

AT&T’s effort stalled in Tennessee last year amid a huge battle involving dozens of the state’s most influential lobbyists and public relations firms. AT&T squared off against the cable industry, which accused AT&T of seeking to avoid fair competition by changing the rules of the game, and local governments, eager to protect local control and revenue.

Lobbying, public relations and television advertising expenses through September were as high as $11 million, according to disclosures filed with the Tennessee Ethics Commission. The television bombardment has continued unabated into April.

Negotiators over the weekend, meanwhile, continued to race to meet Monday’s deadline and nail down the last unresolved issue concerning the public, educational and governmental channels contained in cable franchise agreements struck by some cities such as Nashville and Murfreesboro.

“I’m not comfortable about talking about something that’s not resolved,” said Chad Jenkins, deputy director of the Tennessee Municipal League when asked about negotiations.

Rep. Gerald McCormick, R-Chattanooga, is a co-sponsor of the bill but has not been involved in the negotiations.

“I’d prefer to do it more in the open and just have the Utilities and Banking Subcommittee and Commerce Committee make these decisions,” Rep. McCormick said.

But he said he looks forward to examining the agreement and believes it will foster new technology investments in Tennessee. The competition also should prove good for consumers, he said.

While AT&T at times has argued its entry will lower prices for consumers, Rep. McCormick said, “I doubt it’ll lead to lower prices. I believe it will lead to a lot of pressure not to raise prices like they (cable operators) have raised in the last seven or eight years.”

Chattanooga’s EPB has its own plans to enter the cable television services market locally. The public power distributor’s local plans do not hinge on passage of the AT&T bill. But EPB is being sued by the Tennessee Cable Telecommunications Association.

Previously resolved issues on the AT&T bill include requiring AT&T and other new entrants to pay a 5 percent franchise fee on gross receipts to the local municipality or county where they operate, according Sen. Bill Ketron, R-Murfreesboro, the Senate sponsor of the bill.

Matt Lea, a special assistant to Chattanooga Mayor Ron Littlefield, said the city is still “not exactly sure” what the agreement entails.

Mr. Lea said the city is “particularly interested in the definition of gross receipts.” Chattanooga “probably has the best definition,” he said.

Chattanooga’s chief financial officer, Daisy Madison, said the city currently receives $1.4 million from the 5 percent franchise levied on cable provider Comcast and was projecting to receive $1.8 million under a new contract.

It is unclear what effect the legislation, if any, would have on an existing contract.

Also resolved through negotiations is what lawmakers call one of the biggest stumbling blocks — whether to make AT&T offer its services to a set geographic area within a specific period of time.

Local governments often have these so-called “build out” requirements to prevent companies from “cherry picking” customers and ignoring low-income or less population-rich neighborhoods.

Sen. Ketron said the deal is 30 percent build out within 2 1/2 years. Others knowledgeable about the situation, however, said it is actually 3 1/2 years.

Sen. Ketron said another compromise provides AT&T with credit on the build-out provisions by offering broadband Internet services to rural areas. Providing fast Internet service is crucial to rural communities, according to Sen. Ketron and House Democratic Caucus Chairman Randy Rinks, D-Savannah.

Sen. Ketron said he initially was skeptical of Rep. Naifeh’s methods.

“It appears to have worked,” Sen. Ketron said. “He actually sat people down and walked out of the room and let them start going through, piece by piece.

Participants avoided discussing details of the proposal, apparently in fear of incurring the speaker’s wrath.

“It’s been a good process, not easy but good, and Speaker Naifeh should get the credit for managing a complex policy,” said Stacey Briggs, president and executive director of the Tennessee Cable Telecommunications Association, in an e-mail.

Bob Corney, a former Bredesen communications director who is handling public relations for AT&T on the issue, said the process has “helped focus on producing a good bill that will bring competition for video services in the state.”

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