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Cable companies no longer will need St. Petersburg's approval

ST. PETERSBURG — City rules that require companies to make cable, high-speed Internet and wireless services accessible to all households will be scrubbed for good in coming weeks.

On Thursday, the St. Petersburg City Council will take a preliminary vote on deleting local regulatory rules, including one that prohibited companies like Verizon, Bright House Networks and Knology from catering exclusively to affluent neighborhoods while bypassing less wealthy areas.

"It's a grave mistake," said former City Council member Rene Flowers. "We need to provide access even for those communities that are economically stressed. Schools now have students doing homework on the Internet. If your neighborhood isn't afforded that service, then your neighborhood, and your child, will be left behind."

The council has no choice but to eliminate the rules because a 2007 state law no longer requires companies to get permission from cities and counties to use roads and other rights-of-way. Instead, the new law requires companies to register with the state.

Industry lobbyists and legislators said the change would foster competition and lower rates by reducing administrative costs associated with more oversight and reporting requirements.

The new law prohibits companies from excluding neighborhoods, but consumer advocates and some local officials worry the state won't have the resources to enforce it.

"For the state to regulate the companies, they'd have to oversee, what, hundreds of jurisdictions?" said City Council Vice Chair Herb Polson. "That's quite a chore."

The practice of skipping over less affluent neighborhoods — or "cherry picking" — has a legacy in St. Petersburg.

In 1988, the St. Petersburg Housing Authority sued Paragon Cable, alleging the company stole space on publicly owned poles by hanging its cables on them. At the same time, the suit charged, the company refused to serve the Jordan Park housing project, even though the poles were right next to it. The suit was settled in 1990 when the company agreed to provide service to the Jordan Park at a deep discount.

After that lawsuit, Polson said the city outlined in cable franchise agreements where and when companies would extend service, making sure areas like Midtown wouldn't be built last. That won't be possible anymore.

"What's to stop them (from cherry picking)?" Polson said. "Nothing. There's not a whole lot we can do."

At first glance, rules prohibiting cherry picking wouldn't seem to matter now. Most, if not all, city households have some type of access to cable.

"We're already built out," said Tony Palermo, spokesman for Knology. "So I'm not sure it's an issue."

"We serve the entire area," said Joe Durkin, spokesman for Bright House. "It doesn't affect us in that sense."

Both companies have registered with the state and are now exempt from local regulation.

Meanwhile, Verizon FiOS is still making inroads. Five years ago Verizon debuted its FiOS system, the first major U.S. carrier to bring fiber optic cable to homes. The fiber optic cable streams more data than regular cable, so it carries a package of services, including broadband and wireless Internet, television, and telephone communications. Since 2007, its been operating under state rules and today serves 1.1 million in Hillsborough, Manatee, Pasco, Pinellas, Polk and Sarasota counties, said Verizon Communications spokesman Harry Mitchell.

"These aren't 'new rules,' " Mitchell said in a statement. "We've been operating under the state franchise, with its non-discrimination provisions, since 2007. We've made FiOS service available to a diverse range of customers."

Some neighborhoods, such as Shore Acres, have had FiOS lines in their neighborhoods for three years, but still have no service.

Asked about the delay, Mitchell said more sales need to be made to homes "before we make any large-scale decisions on additional network deployment." He said the company plans on offering FiOS to more city residents in the coming weeks.

Just to subscribe to FiOS, customers must sign contracts and pay deposits, which might be out of reach for some households, said Bill Newton, executive director of Florida Consumer Action Network.

"These can be barriers," Newton said.

Verizon started offering bundled services with no contract in May, said Mitchell.

"Making FiOS available to a customer is a significant technology investment that we cover up front, and a security deposit is common practice to help protect that investment," he said.

And while St. Petersburg has a competitive cable market that keeps rates low, that may not always be the case Newton said.

"It's not a problem now," he said. "But there should be something that will protect us from a monopoly."

Michael Van Sickler can be reached at (727) 893-8037 or [email protected]

Cable companies no longer will need St. Petersburg's approval 10/19/10 [Last modified: Tuesday, October 19, 2010 11:05pm]
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