Monday, April 07, 2008

AT&T, cablecos poised to close Tennessee franchise deal that will leave gaping broadband black holes

AT&T and the cable companies are about to screw over much of Tennessee that has been waiting to come into the modern telecommunications age and obtain broadband Internet access.

They are set to announce a deal today in which the cable industry will drop its opposition to legislation that would preempt local government regulatory authority over Internet-protocol based TV (IPTV) service AT&T wants to offer in selected areas of the state. The same thing happened in California in 2006, leaving about 2,000 communities still without broadband access according to a report by Gov. Arnold Schwarzenegger's Broadband Task Force issued in late January.

Tennessee's cable companies, which earlier this year criticized AT&T's initiative because it provided for only limited infrastructure build out requirements that would leave large areas mired in broadband black holes, have reportedly dropped their opposition.
The Tennessean reports today that under draft legislation that was still being negotiated over the weekend, AT&T would have to cover just 30 percent of its territory within 3½ years after it begins offering IPTV, citing sources involved in negotiations.

According to the report, the draft legislation would apply credit toward AT&T's minimal build out requirement if it offers DSL service of at least 1.5mbs to homes that don't now have access to broadband. It's a meaningless provision. Even if enacted, AT&T is likely to ignore it since it has effectively halted new DSL deployments and is concentrating exclusively on its IPTV-based U-Verse offering. Those without broadband will simply be left twisting in the wind. Why would AT&T need the credit anyway with with legislation's already minimal buildout benchmark?

Bottom line is neither AT&T nor the cable companies have lost any skin in the deal and have sacrificed Tennesseans instead by relegating them to dial up and satellite Internet access. That leaves it to Tennessee Gov. Phil Bredesen to look out for the interests of his constituents as he indicated he would do in early February. Rather than endorse this lousy deal for consumers like Schwarzenegger did in California two years ago, he should reject it.

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