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Time Warner Wins Ohio-Wide Cable Franchise
An anonymous reader writes "Time Warner Cable has received a state-wide franchise agreement in Ohio. Time Warner's agreement covers 260 communities in 60 of Ohio's 88 counties, for 10 years. AT&T was the first to earn a state-wide franchise contract, after a law was passed in September that allowed operators to negotiate a single state-wide agreement. In the past operators negotiated franchise agreements at the local level."
It's called "removing control at the local level, and moving it to people easier to reach to bribe". Traditionally, cable franchises (the right to do business in a market) are granted at a local municipality level. Cable operators are required to list on their bills the contact information for the market's franchising authority. This is so consumers can complain to them about service from the provider.
Because this office (which is usually connected to the local government) is the one who decides whether a cable company gets to stay in business in an area, as well as grant additional licenses to new providers, they are an important enemy to cable companies in individual areas. If a cableco was providing very poor services, the franchising office could grant a second company to provide services on their own overbuilt cable network to provide competition, or could simply pull/not renew the license of the original operator, forcing them to sell the market to another provider (this is more likely in small towns were more people may be on satellite or there are multiple cablecos located nearby).
With a statewide license, this sort of stuff isn't going to happen. Because obviously the state government is not going to kick a cableco out of all Ohio over problems in Tinytown, OH. Whereas before, the licensing board for Tinytown (the mayor, treasurer, and postmaster) might have done something about it.
The TFA (which is really just a state press release) says this is being done to promote penetration of broadband service in the state. Unless there are actual terms in the agreement that Time-Warner will service areas of __ population density or greater that's not going to happen. Time Warner will continue to push access in large cities, and let older rural cable networks degrade, confident they can still hold the market for 10 years at least.
From the article:
"On June 25, 2007, Governor Ted Strickland signed Senate Bill 117, which created the one-stop, statewide video-service authorization process. Previously, cable or wire video-service companies had to negotiate local franchises with each municipality or township."
This isn't a state sanctioned monopoly, it is authorization to operate within the state. Previously, there was no mechanism for video services to operate at the state level since the were no real laws dictating any boundaries for them to operate in so they had to get authorization from and make contracts with individual municipalities so that they could actually operate their business. The state, decided that working with hundreds/thousands of townships/cities was asinine so they created a statewide authorization with some of the more strict rules that many municipalities imposed on the companies.