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The shepherd and the dog.

A shepherd penning his sheep in the fold for the night was about to shut up a wolf with them when his dog, perceiving the wolf, said, "Master, how can you expect the sheep to be safe if you admit a wolf into the fold?"

There is a wolf lurking in the municipal and legislative halls of central Arkansas and, as Aesop's wolves do, it is disguising itself in what appears to be the clothes of "good intentions."

Under the auspices of its "best efforts," AT&T currently is lobbying Arkansas' shepherds--its municipalities, Legislature and congressional representatives--for special consideration that will give it unfair advantages over competitors, put the public interest at risk and allow AT&T to exclude ratepayers from upgrades to their publicly subsidized networks. Specifically, AT&T wants an exemption from federal and state franchise law that establishes local oversight and prohibits discrimination.

Yes, discrimination.

According to a December 2004 USA Today article, AT&T plans to target 90 percent of high-spending consumers, 70 percent of "middle-value" consumers and 5 percent of "low-value" consumers. That's called redlining. It's discriminatory and it denies lower-income residents the benefits of competitive video services.

The anti-discrimination provisions of the 1996 Telecommunications Act ensure that all customers are given access to cable television services and protected against redlining--and guarantee that all communities, regardless of income, geography, race or ethnicity would have access to television news, information and entertainment.

Not so with AT&T. In May 2005, USA Today reported that while AT&T tells municipalities it wants to bring broadband choices to everyone, to Wall Street AT&T brags that it expects high investment returns because it "plans to focus almost exclusively on affluent neighborhoods."

Cable competes every day with satellite dish providers, Internet service providers and even AT&T. Provisions in almost every cable franchise agreement stipulate that the operator serves the entire community, not just the "high-value" consumer.

Furthermore, the cable industry has worked for decades in tandem with municipalities to meet the community's needs fairly through local franchise agreements. Unlike AT&T, telephone companies such as Verizon and ArkWest are proving that the level playing field issue can be met.

AT&T asserts that allowing it into the market without a franchise agreement will provide more choice and lower rates for the consumer.

Don't be fooled by the big bad wolf.

If you are a consumer and you think allowing AT&T in to the marketplace without a franchise agreement will lower your prices, you are dead wrong. AT&T Chairman and CEO Edward E. Whitacre Jr. has stated AT&T has no intention of engaging in a "price war" for video services. In other words, this isn't about how much it will cost the customer. It is about how much AT&T stands to make for its investors.

If you are a municipal leader currently involved in contract negotiations with AT&T--and the city of Little Rock publicly takes up the issue for the first time on Tuesday, July 11--we ask that you slow down, take a closer look at who you are dealing with, and demand AT&T play by the same rules, provide the same services, and act in the best interest of each and every citizen you've been elected to represent.

Our municipal, state and national leaders should allow AT&T in to the fold. Fair competition and a level playing field are good for the consumer, good for the community and good for the economy. The franchise agreement requirements met by cable operators ensure equal access for all to technology and public, educational and government access channels. Anything short of a firm commitment from AT&T to provide these same services to all residents creates a playing field tilted in its favor and puts the public interest at risk.

True competition will come to the marketplace only if the citizens of Arkansas have choices offered fairly and only if our elected "shepherds" don't sacrifice part of the flock in their hurry to put the issue to bed.

Len Pitcock is the executive director of the Arkansas Cable Telecommunications Association. He can be reached by e-mail at
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Title Annotation:Commentary
Author:Pitcock, Len
Publication:Arkansas Business
Date:Jul 10, 2006
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