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Verizon and other phone companies support the bill -- claiming the cable companies virtually have a monopoly in many municipalities. Comcast, RCN and other cable firms staunchly oppose the bill.
One key provision of the bill would establish a single state-administered uniform agreement for companies that offer a video product. Now, cable providers must negotiate and enter into separate franchise agreements with a municipality in which they wish to operate.
State Sen. Connie Williams, D-17, of Haverford and Montgomery County, Pileggi and Williams were on a panel of several officials chaired by Sen. Rob Wonderling, chairman of the Senate Communications and Technology Committee. The day-long hearing was held at Penn State’s Delco campus.
Tinicum Commissioner Thomas J. Giancristoforo Jr., president of the State Association of Township Commissioners, questioned placing oversight at the state level in the Corporations Bureau with the Department of State.
"Our coalition questions whether the agency has the knowledge or staff to handle customer complaints regarding cable service," he said.
Giancristoforo said, "enforcement should remain at the local level if state-level enforcement cannot be enhanced."
Connie Williams, in addressing the phone companies, said, "We do want the competition, but I think that a concern is ..that we’re not sure the way you’re proposing it is fair, the fair way to do it."
David Freet, Pennsylvania Telephone Association president, replied there are 35 other companies. "This is about giving them the opportunity, not just Verizon."
Williams asked why can’t those companies go into their service areas right now and negotiate.
"Some of my members have; some have been successful; some have been partially successful," Freet said.
"I think we need to be able to help them so that they’re all successful," Williams said.
Verizon Pennsylvania President William Petersen told the Senate panel the state needs cable choice and competition.
"There are few things more certain in life than higher cable rates, which increase regularly and rapidly," he said.
Since 2001, cable prices have increased four times faster than the rate of the Consumer Price Index, Petersen said.
"Earlier this year, Comcast raised its Pennsylvania cable rates again and raised them significantly -- 6 percent -- unless you live in parts of Pittsburgh, in which case the rate increase was 9 percent.
"The cable industry in general has traditionally had the lowest level of customer satisfaction of any industry tracked" by the University of Michigan American Customer Satisfaction Index, "..nd Comcast has ranked among the worst-rated businesses in the history of the index," Petersen said.
David Breidinger, a vice president for Comcast Cable Communications’ Eastern Division, countered that telephone companies have had a decade to enter the video market and chose not to do so.
A decade after Congress lifted the ban on telephone entry into the video business, "having made little effort to enter the video business, the phone companies are back claiming that they need special rules that would allow them to enter the video marketplace in a manner that would give them a regulatory advantage over their competitors as S.B. 1247 does," Breidinger said.
Samantha Reiner, Edgmont manager, said she has been involved in two cable franchise negotiations in recent years, with Comcast and Verizon as part of multi-municipal groups.
"Verizon has told us that they will not start providing service until 2007 in certain select locations in the county" and will not roll out service to the entire county for years, said Reiner, a member of the steering committee of the Delaware County Consortium.
She said it is "a complete overstatement" that Verizon will need to negotiate 2,600 franchise agreements in the state. Of the 1,600 municipalities in Verizon’s footprint, many don’t require a franchise either of the incumbent operator or of Verizon.
"My guess is that Verizon will need closer to 500 agreements rather than the 2,600 it is touting," she said, asking the committee to reconsider the legislation because the current system works.
