"Video competition" is all about broadband access

The failure of AT&T state "video franchise" legislation in Tennessee last week shows a major discrepancy between AT&T spin and perception. While Ma Bell may claim she wants to bring competition for television programming by offering a cable TV alternative called U-Verse using Internet Protocol over Television (IPTV) technology, local governments and consumer advocates correctly see the real issue isn't about a mere cable TV alternative, but more broadly -- pun intended -- broadband access itself since IPTV by definition requires broadband.

Since U-Verse is deployed only in selected areas, large areas will not only go without IPTV but broadband access altogether since these gaping broadband black holes remain on early 1990s dial up technology or a satellite, a costly, crippled poor broadband substitute. Those living in areas fortunate enough to have broadband by today's standards using Digital Subscriber Line (DSL) service may not in as little as 3-5 years as broadband applications and their bandwidth demand continue to grow.

AT&T says that the bill would have increased competition in the pay-TV sector, by presenting viewers with another option aside from cable and satellite providers.

Opponents of the legislation, however, claim that it would have allowed AT&T to cherry-pick high-income neighborhoods for the service, potentially widening the so called “digital divide” between rich and poor.

Broadband franchise legislation or not, AT&T not expected to deploy broadband to Tennessee small towns

AT&T is threatening Tennessee lawmakers that it will not invest in deployment of broadband in smaller towns if the state legislature doesn't pass a state video franchise bill backed by the telco.

A lobbyist for local governments opposing the measure however says even if it were enacted, AT&T would continue to concentrate on large metro areas of the state and leave smaller towns on the dark side of the digital divide.

Which is likely true because similar statewide franchise bills such as California's Digital Infrastructure and Video Competition Act of 2006 (AB 2987) -- which was also sought by AT&T -- requires big providers to deploy broadband to just half of their service areas by 2012, leaving non-urban areas out in the cold.