06 November 2006

Municipal franchising

The subject of municipal franchising has been becoming a "hot button" issue -- one that is likely to be addressed in any legislation reforming telecommunications regulation in the forthcoming years. In some cases, it has been addressed by state law.

Like any issue, it has (at least) two sides. Verizon and AT&T, who seek relief from having to seek permission on a one-by-one basis, cite high costs. This article, appearing in Forbes, describes the case of one town. Here we see interests of the public as well as active lobbying against the franchise by their (CATV) competitor. A recent editorial in the Pittsburgh Post-Gazette articulates some of the "public interest" arguments that emerge.

Do you think that it is unreasonable to ask new entrants (such as Verizon and AT&T) to get franchises individually for each of the municipalities they wish to serve? Do the (CATV-based) incumbents have a competitive advantage due to the power of their incumbency? Are the "public interest" arguments valid in your view? Why or why not?

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