CenturyTel, city tangle over TV

CenturyTel is poised to begin competing with the cable and satellite companies by offering digital television service through its existing telephone wires in Columbia, and some of CenturyTel’s employees are already testing the technology in their homes.

“Consumers are looking to get the triple play—voice, telephone, internet and TV—all from one provider,” said Don Neely, CenturyTel’s public relations manager. “It’s going to be competitive, so it will come down to consumer choice of who is putting out the better product.”

But CenturyTel’s plan to use Columbia as a test market for its local television service is being complicated by uncertainty among existing franchise fee laws, and negotiations with city officials have stalled.
City Manager Bill Watkins said that the city has met with officials from CenturyTel to work out the details of its plan to launch digital television but that negotiations are far from being mutually acceptable.

“What we want to do is create a level playing field with all current and future providers,” Watkins said. “We’ve been meeting with CenturyTel and want to sit down and meet with them [again, to finalize terms], but they have refused.”

George Carney, CenturyTel’s general manager, expressed surprise with Watkins’s characterization. “We’ve always had a great commitment to the city,” Carney said. “We have commitments to Bill that we will talk through this whole process.”

According to Carney, the newness of the technology to offer television through telephone wires, coupled with vague laws, is impeding the negotiation process. Watkins counters that CenturyTel’s reluctance to commit to certain provisions, such as offering public access channels for the city and the school district, is a sticking point.

“If current cable companies provide support and public access channels, all video providers should provide that,” Watkins said.

Adding to the pressure to provide a level playing field for all fee-television providers is the fact that the city is currently renegotiating franchise fee agreements with Columbia’s two current cable companies, MediaCom and Charter.

“We’re finishing up franchise agreements with MediaCom and Charter,” Watkins said, adding that these existing companies want assurances that new players in the game are held to the same standards. “Everybody is sitting back, waiting to see what happens,” he said.

Vague interpretations of existing laws are also frustrating the process, according to both sides of the issue. City ordinances, state laws and federal laws all have an impact on television providers. Nationally, the Federal Communications Commission (FCC) passed a ruling in December that forces municipalities to make a decision on a franchise agreement within 90 days.

Consumers, wanting more competition in the cable television industry, applaud the move. At the state level, Missouri lawmakers anticipate that a bill addressing the issue is imminent. If that happens, telephone companies wishing to offer video services may be able to circumvent municipalities and apply for statewide franchises.

“The laws are all in flux, nationally and statewide,” Watkins said. When asked whether CenturyTel is required by law to have a television franchise agreement in addition to its existing telephone franchise agreement with the city, Watkins said, “They (CenturyTel) would say no. That’s crazy, though. The telephone tax is higher than the cable tax. We have a fairly sizable difference we need to get worked out.”

Watkins was quick to add, however, that he strongly supports CenturyTel offering video service. “We’re very supportive of having additional competition,” he said.

Carney said, “It’s competitive, so it’s slow moving. This is a first for CenturyTel, so it’s truly a trial at this time.”

Despite sluggish negotiations with the city, CenturyTel has its massive technology in place to launch video television by the second quarter of 2007.

“Right now a few of our employees are testing the product,” Neely said.
CenturyTel unveiled a similar product in the LaCrosse, Wis., market last year, but the Columbia market offers enhanced products and services. “Columbia is CenturyTel’s largest market and good place to locate the technology. Columbia could be the ‘headend,” originating service of other markets,” Neely said.

According to industry publications, the headend facility in Columbia has been completed and, when officially launched, will have the capability to provide similar video products to other areas of the country.