Barry Orton, a telecommunications professor with the University of Wisconsin, has long been an advocate and consultant to cities and cable franchising authorities on broadband policy and regulation. Orton is also a founder of the National Association of Telecommunications Officers and Advisors, the professional organization of local telecommunications regulators. Orton spoke with Focus on Customer Care about the pending national legislation that would eliminate local franchising authority of cable television services. An edited transcript follows:
Q: What happens if and when the final version of a federal franchise law takes effect?
A: We will have a great video: “Wild, Wild West.” I think the cable industry actually owes the cities of this country a great debt when [the cities] forced cable systems to upgrade their properties and provide quality customer service. The cable industry has definitely benefited from those requirements. They certainly went kicking and screaming, but they are better prepared for competition now. By offering better customer service, cable operators were also able to get into new profitable businesses like high-speed data that consumers wouldn’t have trusted them to offer before.
Now the telephone companies want to play catch-up but they don’t want to have to jump through all the hoops that cable had to jump through.
Q: Will cities have any regulatory authority after the federal bill passes?
A: That’s unclear at this point. They will probably have to have rights-of-way control and there will likely be some kind of indemnification, insurance, and auditing oversight of some sort. I assume the FCC’s consumer protection agency will oversee complaints. But those complaints will come in by the thousands, and that’s just from the folks who are tenacious enough to keep trying. The FCC has no capability of handling that volume. Cities and franchising authorities lose the power and ability to solve those problems quickly and the FCC will take over. But they have no enforcement power and so all those complaints will likely go unresolved.
Q: Can the Feds give oversight to the states to help offset the load of complaints you expect the FCC to receive?
A: Possibly. But the states will have to gear up for that, and that takes time and money. Most states don’t have any of this oversight in place. When it comes to complaints, most states have consumer protection laws. Once there are enough complaints, they can sue companies. But that’s not going to solve the every day problems customers have.
Q: Are there benefits for consumers with the passage of a federal franchise bill?
A: It will certainly be a wild ride. Prices might go down a bit, but no one wants to turn the competition into a price war, so I don’t expect prices to go down that much. Service could go up. It could end up being a service war. If I were a cable operator, that’s what I would like to compete against. If cable companies are smart, and many of them are, they’ll raise their standards. Every month that the phone companies do it incorrectly, it gives the cable companies a leg up on the competition.
Q: What are the phone companies doing incorrectly?
A: What happens when the AT&T version of video service is a disaster — and I think it will be. The AT&T system won’t be as good or robust as cable and they have all those huge boxes all over people’s yards. What happens when they have to reboot their system and reset all those boxes? They don’t have high-definition [TV] yet and their [digital video recorder] will only record what you’re watching at the time. It’s just not ready for primetime yet. They are putting lipstick on a technological pig. Now Verizon seems to doing it the right way with fiber to the home. But that’s expensive and it’s difficult to see how they’ll be able to charge less than cable for very long.
Q: What’s more important to consumers — price or service?
A: People will bitch about price, but they’ll pay it. AT&T Broadband showed how badly a company can be run and how consumers will react. They left in droves when they had to deal with bad service. People finally got fed up when they had to mow around the drops to their house or when they mowed over them and cut them after AT&T left them on the ground for a year. People will pay for good service, even if it continues to go up. But they’ll leave for something else if the service is better there.
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