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Greensboro News Record

By MICHELLE JARBOE Staff Writer

When it comes to cable, Jean Crow is what you might call a high roller.

The 68-year-old Greensboro retiree pays Time Warner Cable about $180 a month so she can surf the Web, make calls on a digital phone and watch baseball, crime shows and films.

A necessity? No, she said. Something I really want? Yes. Nothing is a necessity if you cant afford it.

For Crow and other cable consumers, a major change is on the horizon, promising a shift in consumer options, access __ and possibly cost.

Phone companies including BellSouth are aiming to offer video service, claiming they can lower costs through competing for cable customers like Crow.

Mimicking more than a dozen other states, North Carolina lawmakers are considering a bill that could allow phone companies easier entry into the video market. Under the bill __ up for revision by House and Senate committees today __ local governments would lose their power to negotiate contracts with cable providers.

Instead, the state would assume authority over video services. Telephone companies would avoid the costly, lengthy process of negotiating with each town, city or county where they want to sell video.

BellSouth, a major proponent of the legislation, claims that giving power to the state will boost competition and cut rates. The company also sees its forays into video as only fair __ Time Warner has taken a slash at BellSouths local landline market with its launch of digital phone in some areas.

Consumer advocates say the bill could sow seeds of discrimination, allowing phone companies to cherry-pick service areas with well-off neighborhoods and bypass lower-income or rural customers.

Cable subscribers like Crow, however, just want choice and lower costs.

And cities, including Greensboro, which received nearly $2.4 million in the past fiscal year in Time Warner franchise revenues, are afraid of losing that money and the control that comes with local regulation.

The city claims phone companies are too lazy to compete on rigorous local terms and are unconcerned about consumer protection. If the phone companies wanted to compete, the city says, they could do so at any time.

Legislators in Raleigh say state control is likely.

This bills time has come, said Sen. David Hoyle, D-Gaston, who is cosponsoring his chambers version of the bill. It needs to be done.

The cost of competition

The American Consumer Institute says each U.S. household could save $19 a month on cable if competition spread across the country.

Thats a figure local BellSouth spokesman Clifton Metcalf likes to tout. But Metcalf wont put a number on N.C. consumer savings in a more competitive video climate.

Hes just certain that competition will drive prices down.

Consider Davidson County, where Lexcom is a rare second player in the video market. Time Warners basic service, a tier of local programming, costs $7.50 there, compared with $9.18 in Guilford County.

Across the Time Warner menu, cable packages cost up to $10 less in Davidson than in Guilford. Lexcoms rates tend to be slightly higher.

Anyone who comes into the market will be a fierce competitor, said Time Warner spokesman D.K. McLaughlin. What some people dont understand is that we are also fierce competitors.

Skeptics of the state legislation admit that there could be some savings if it passes. But they scoff at the $19 figure.

That cannot happen, said Connie Ledoux Book , an associate professor at Elon University and a franchising consultant. That absolutely cannot happen, and its because the cable television bill is not generated by itself, by the cable company or the television company. It is dependent on the charges of the cable networks.

Video providers like Time Warner pay different rates to secure channels. These charges are then wrapped into the bill passed to subscribers.

Who gets left behind?

Consumer advocates say that any cost savings could be limited by income and geography __ with wealthy, urban customers benefitting most.

Lower-income, more rural communities are likely to be left behind, said Jeannine Kenney , a senior policy analyst for Consumers Union.

The state legislation seeks to guard against that, but there is no clause to mandate service for everyone.

I am concerned that the language prohibiting income and race discrimination in provision of services is probably or maybe impossible to enforce, said Rep. Paul Luebke, D-Durham, a House bill sponsor.

BellSouth says discrimination shouldnt be a concern.

Telephone networks already go everywhere, Metcalf said. We dont stop at a street corner just because the income level of a neighborhood changes. Thats the network that we want to use to provide video.

BellSouths broadband network connects to more than 80 percent of customers in the companys N.C. service area, Metcalf said. But the rollout of video services will require additional investments in that network.

And it will take time.

It could be a gradual rollout that just might take a little while, Metcalf said.

Hoyle also dismisses the discrimination argument. He sees a state franchise as a boon to consumers where competition pops up. And he doesnt foresee a negative impact where choice is slow to emerge.

Many of us believe, and Im one of them, that the right to cable television is not a necessity, he said.

If the state legislation is approved, it will kick in Jan. 1. Metcalf thinks consumers will see competition within six months to a year after that.

That might be good news for consumers like Crow, who loves bundling her services but wishes Time Warner left a little more change in her pocket.

I think their prices are high, she said. But theres really not much I can do about it.

Contact Michelle Jarboe at 373-7075, or mjarboe@news-record.com

(c) 2006 Greensboro News Record. Provided by ProQuest Information and Learning. All rights Reserved.