Cable Industry Ads Target Phone Firms’ Push Into TV

A simmering battle between the cable TV industry and major phone companies is about to boil over.

Cable operators plan to start running ads today that accuse AT&T; Inc., Verizon Communications Inc. and other major phone carriers of lying to the public and elected officials as the companies use their networks to roll out new television services.

The ads, which will debut in Indiana, call the phone companies “fibbers” for using “phoney baloney” consumer groups to argue that carriers need a change in cable franchising rules so they can enter local markets more quickly.

“Why do they really want to change the law?” one ad asks. “To raise your phone rates and be able to pick and choose what neighborhoods to serve.”

Revisions to cable franchising laws -- particularly provisions requiring operators to serve all residents in a city -- are being considered by Congress, the Federal Communications Commission and some state legislatures, including California’s.

Phone companies eager to offer television service allege that cable operators want cumbersome local rules to remain as obstacles to potential rivals.

“Cable is just trying to protect its turf and keep competition out,” AT&T; spokeswoman Claudia Jones said.

The cable industry chose to launch its campaign in Indiana because the state is poised to pass a franchising law that would take much of the local control of pay TV providers away from local authorities. Texas passed the first such bill last year, and California lawmakers are expected to introduce bills addressing franchising issues.

At a Wednesday hearing before the Senate Commerce Committee, AT&T; Chairman Edward E. Whitacre Jr. and Verizon Chairman Ivan Seidenberg said franchising laws needed to be changed.

Getting permission from each community is “out of date with technology, out of touch with consumer demands,” Seidenberg said. He argued that carriers already had local franchises to deliver phone service and shouldn’t be required to negotiate with thousands of cities for video franchises.

Whitacre said San Antonio-based AT&T; and other new video providers faced “uncertainty, delay and prohibitive costs driven by the current cable franchising process” designed for a local monopoly.

Cable companies and many local governments say phone carriers should be subject to most of the same rules to ensure local control over pay TV service and a level playing field.

“A level playing field means that we succeed or fail based on innovation and effort, rather than because our competitor may get better rules,” Tom Rutledge, chief operating officer of Cablevision Systems Corp., told the Senate committee. He said franchise agreements served other local concerns and were not a barrier to offering services.

San Bernardino County franchise administrator Lori Panzino-Tillery told the panel that local governments needed to maintain control of the streets, sidewalks and other rights of way that pay TV providers want to dig up to lay their cables.

“Local government remains concerned that rhetoric and not facts have led members of Congress to believe that competition and innovation will flourish only if local government is removed from the equation,” said Panzino-Tillery, president of the National Assn. of Telecommunications Officers and Advisors. “We are here today to help you understand that nothing could be farther from the truth.”

Verizon has installed high-speed fiber-optic networks in 30 Southern California cities but has franchise agreements in only a few, such as Beaumont, Murrieta and Hermosa Beach.

AT&T; hopes to offer service in Anaheim this year. Small carrier SureWest Communications Inc. in Roseville offers video service in various parts of the Sacramento area.

In Beaumont, Randy and Penny Cooper said they were awed by the high-definition programming coming over their 65-inch rear-projection TV. The Coopers bought cable TV service from Adelphia Communications Corp. and connected to the Internet through Verizon’s digital subscriber line service.

After buying a high-definition television, Randy Cooper decided he didn’t want to pay Adelphia $7.70 extra a month for a high-definition set-top box.

So when Verizon offered its fiber-optic service, Randy Cooper jumped at it. “Honestly, I had no complaints with Adelphia, but for a little less a month, what a package you get with this,” Cooper said.