CA City fines Time Warner

When Time Warner acquired Adelphia, many localities found themselves with a new cable provider. Moorpark, CA was one of them.

The problem in Moorkpark is that the cable franchise—the contract signed between a cable provider and the municipality—had service requirements that the new provider wasn't meeting. More specifically, the franchise requires that customer service phone calls are answered within 30 seconds and they weren't.

Local cable franchises typically contain service requirements—and enforcement provisions that can be invoked when the provider fails to meet them. The Moorpark City Council chose on a unanimous 4-0 vote to penalize the provider with a $25,000 fine.

This is interesting, because there is a national movement away from municipal franchises for video. Texas, has already done that. SB 5, passed two years ago, allows new video providers (basically AT&T and Verizon, the entitites that purchased this legislation) to skip local franchises.

The big problem with legislation such as SB 5 is that it does away with the build-out and service requirments typically found in a local franchise. The supporters claim that competitive markets will fix those problems, but, as this case shows, the video market must not be competitive because the problems still exist. Frankly, I'm not sure that a market where the customer choice is basically just between Brand A and Brand T can ever be competitive.

You can read more about the Moorpark, CA situation here.