If all goes according to plan, an amended version of SB 117 will be voted out of the Ohio Senate Energy and Public Utilities Committee this afternoon. The vote to approve will be lopsided, possibly unanimous. There will be much praise for Senator Jeff Jacobson, the sponsor, for listening to the legitimate concerns of cities and public access providers and
tweaking the bill in response. (Which is BS, but that’s another post… see
Pho.) And there will be promises of wondrous benefits to Ohio consumers from the unleashing of “cable competition” throughout the state.
Of course the room will be packed with lobbyists. But there’s one important player who won’t be represented — or whose representative will be very, very quiet. And nobody will notice.
No one will ask: Where’s Verizon?
The single purpose of SB 117, Ohio’s “state video franchising reform” bill, is to clear the way for major telephone companies (”incumbent local exchange carriers”, or ILECs) to sell video and “triple play” services over fiber-enhanced versions of their existing infrastructures, without getting approval from the local governments that own the rights of way where those enhancements will take place. Versions of this bill have been moving through legislatures across the country. Early iterations, as in New Jersey and Texas, encountered serious lobbying opposition from the cable industry, which saw them correctly as an attempt to grab a big competitive edge in markets where phone companies are losing customers to cable VOIP. To blunt this inconvenient opposition, the telcos cut a deal last year in the Michigan legislature which was then imported to Ohio and other states:
No more local video franchises for anyone! Thus, we got SB 117.
In this national march through the statehouses, state video franchise legislation has had two major backers: AT&T and Verizon. (In some states like Massachusetts, it’s
known to opponents as “the Verizon bill”.) The nation’s two giant telcos are both banking on big-bandwidth converged services, video-VOIP-Internet, to recover and grow their shrinking telephone markets. And they’re both pushing “video competition” as their selling point to policy-makers.
In the national arena, Verizon is actually pretty far out in front of AT&T. Its “FiOS” product — optical fiber all the way to the premises — is simpler and faster than AT&T’s beefed-up DSL service (”U-Verse”), though more expensive to install. Verizon reported over 300,000 FiOS video subscribers at the end of the first quarter of 2007, compared to fewer than 20,000 for U-Verse.
But here in Ohio, Verizon’s contribution to the video franchising debate has been deathly silence.
Verizon hasn’t offered testimony on SB 117. Its name doesn’t appear with AT&T’s as a sponsor of
www.ohiotvchoice.com. Its spokespeople have been completely absent from news coverage of the bill.
The whole SB 117 narrative is about AT&T. It’s all about AT&T competition, AT&T jobs, AT&T’s political clout. All the red Communications Workers t-shirts at the hearings are worn by AT&T workers.
Most important, the “buildout requirements” in SB 117
apply only to AT&T. That is, they apply only to telecommunications companies with more than a million access lines in Ohio. As you’ll see below, that’s one company.
Hmmm. Is AT&T the only phone company in Ohio? Or the only company that’s able to deploy modern network technology?
Are cable rates and “competition” a concern only to consumers who have AT&T phone service?
Will cities and villages lose their cable franchising authority under SB 117 only in AT&T’s service territory?
No. No. No. And
noooo.
Yes, AT&T
is Ohio’s biggest ILEC by far. In 2005, it served about 53% of the state’s 5.1 million reported access lines, and 51% of residential lines. It dominates all of the urban/suburban areas except Cincinnati, where Cincinnati Bell rules; and it has a pretty fair share of more rural markets as well.
But AT&T’s local exchanges still cover less than a third of the state. Here’s the map, courtesy of the PUCO:
Who’s minding the phone in all those other counties and fractions of counties? There are
more than forty other ILECs reporting to the PUCO. Some are tiny; fifteen of them served fewer than a thousand home access lines in 2005. The big guys are:
Verizon, with over 800,000 access lines in 80 counties;
Cincinnati Bell, with almost 700,000 access lines in six counties;
Embarq (fm Sprint/United), with about 550,000 access lines in 45 counties;
Windstream Western Reserve, with 170,000 access lines; and
Windstream Ohio (fm Alltel), with 120,000.
With the exception of Verizon, these are “second tier” players in the national telecom pecking order. But Verizon, with annual revenue in excess of $80 billion, is definitely first-tier.
Unfortunately, in Verizon’s pecking order, Ohio appears to be very near the bottom.
I've written before about
Verizon’s reported desire to sell off its Ohio access lines, as it recently did with its operations in Maine, New Hampshire and Vermont. Given this desire, it’s not surprising that this state is not to be found in Verizon’s announced plans for FiOS deployment. In fact, Verizon only got around to making regular ADSL Internet service available to most of the communities in its Ohio territory
five months ago — and only because it was required to by PUCO rules for “alternative regulation” of its basic phone service.
I recommend that you scroll down to the bottom of that last link and take a look at some of the Verizon communities that didn’t have normal ADSL access six months ago. Brunswick. Wadsworth. Oberlin. New Philadelphia. Norwalk. Portsmouth.
So what do you think are their chances of getting “cable competition”, via Verizon fiber to the premises, if SB 117 becomes law and Ohio gets state video franchising?
If you said “slim to none”, go to the head of the class. But under SB 117, all those cities are going to lose their cable franchising authority, just like those in AT&T territory, just like every other municipality in Ohio. And all their Senators and Representatives are being told that their voters will get “cable competition” in return.
It’s a lie.
Take another look at
that map of Verizon’s Ohio service territory. Very few if any of the communities and consumers in that blue territory are going to get what they’re being promised by the sponsors of SB 117. No fiber to their homes. No video competition. No new broadband access. No jobs. Not… gonna… happen.
No wonder Verizon is keeping its head down and its mouth shut.
Any halfway responsible Senator or Representative who represents Verizon households, and who’s thinking about voting for SB 117, has a duty to make a simple phone call to the president of Verizon North, Todd Colquitt. (He also happens to be chairman of the board of the
Ohio Telecom Association, which is pushing SB 117 — I’m sure they can provide his phone number). The phone call should consist of a single question: “Mr. Colquitt, if SB 117 becomes law, when can households in my district expect to have Verizon FiOS video service available?”
