AT&T bill begins moving in House

NASHVILLE — After five hours of explanation, some questions and a little debate, House Commerce Committee members approved Tuesday a newly unveiled 69-page bill that would let AT&T provide television services across Tennessee.

Panel chairman Charles Curtiss, D-Sparta, told colleagues the Competitive Cable and Video Services Act was “complex” and he did not want the panel to be a “rubber stamp.”

But panel members, who fought over the bill all last year, put their faith in state Comptroller John Morgan, who helped hammer out a backroom compromise among AT&T, cable interests and local governments. The compromise was unveiled Monday afternoon and, 26 hours later, a bill that proponents say will inject competition into the cable industry was passed on a voice vote and moved to the Finance Committee.

“I’m very comfortable with this bill,” Rep. Gerald McCormick, R-Chattanooga, a bill co-sponsor, told committee members. He noted he had reservations last year about what he characterized as a “one-sided” AT&T bill.

Gov. Phil Bredesen, who earlier this year voiced skepticism about the probable success of House Speaker Jimmy Naifeh’s strategy to pull warring sides into a back room and force an agreement, was more favorable in comments to reporters.

The bill is “equally distasteful to all parties, which is always a good sign,” the governor declared.

“To the extent to which it can really help to improve competitiveness and reduce cable TV rates, I think it will be a very good thing for the state,” he said. “I hope it passes.”

Some of what little debate there was in the House Commerce Committee centered on AT&T’s repeated claims last year that its bill, which the telecommunications giant rushed through several states, would reduce cable prices.

“Last year, every other word out of AT&T’s mouth was ‘it’s going to lower your rates,’” complained Rep. Steve McManus, R-Cordova, noting that no one in news coverage of the compromise is willing to say that now.

Chairman Curtiss said he was among those quoted.

“I think there’s going to be instances where it lowers rates,” the chairman said. “But to look the public in the eye and say this is going to lower rates, I’m not willing to do that.”

He said what the bill should do is lead to quicker deployment of new technology and, proponents hope, increased deployment of fast-service broadband Internet connections in underserved rural areas.

Left unresolved was a controversy over controlling prices for pole attachments charged by public electric cooperatives and public municipal electric companies. The bill includes a provision using Federal Communications Commission language on rates that the public power companies don’t like.

The bill approved by the House Commerce Committee lets AT&T jump-start its entry into providing cable-like video services across the state. AT&T now can seek a state franchise agreement and avoid having to reach franchise agreements with several hundred municipalities and counties across Tennessee.

Language in the bill also requires AT&T and other new companies seeking a state license to pay a 5 percent franchise fee on gross receipts to the local city or county in which they operate.

The bill also lets local cable companies opt out of their agreements and seek a state franchise. Chattanooga now charges a 5 percent fee. It was unclear if the state’s definition of gross receipts might encourage Comcast, which has a franchise in Chattanooga, to convert its licensing to the state.

Meanwhile, Chattanooga’s EPB and fellow municipal electric companies and rural co-ops fought in the Senate Commerce Committee for another bill that would let them offer cable, Internet and telephone services outside their current service areas.

EPB President Harold DePriest said the city-owned power distributor would like to offer some of its services, including the ability to use its telephone exchange, to other public power providers in the area.

The bill, which is opposed by the cable industry, was delayed until next week by the Senate panel.