Proposed video-franchise reform legislation now before the General Assembly is not likely to invite lawsuits from cities, counties and cable operators who might hope to argue that statewide franchises illegally impair existing cable contracts, given an opinion handed down this week by Attorney General Bob Cooper.
The opinion was requested by Rep. Curt Cobb (D-Shelbyville), chairman of House Commerce's utilities, banking and small business subscommittee, in anticipation of arguments from foes of proposed statewide video franchising, which AT&T Tennessee is aggressively seeking.
Cobb's office shared the opinion in response to a request by NashvillePost.com this morning.
Cobb posed questions regarding whether Tennessee local governments would have standing to challenge the proposed "Competitive Cable and Video Services" bill on grounds the legislation would violate Contracts clauses of the U.S. and Tennessee Constitutions.
Cobb also asked whether a statewide franchise law that could leave cable companies locked into existing contracts would violate cable companies' contract rights.
In both cases, Cooper's office responded essentially, "No." The opinion, dated April 16, noted that local governments that serve as franchising authorities are creatures of the state and have no right to issue exclusive franchises. Thus, they have no grounds to sue on such issues. Further, the opinion explained cable contractors have no reason to expect that state laws would be immutable and the bill, itself, produces no impairment of their current contracts.
The rulings are likely to embolden legislators who have declared they want to pave the way for competition and consumer savings on video services, while ensuring that cable companies are not unfairly disadvantaged by AT&T's entry to the market.
De facto negotiations of key provisions of franchise reform continued yesterday in Cobb's subcommittee, which voted yesterday to send the measure to the full House Commerce Committee heavily freighted with amendments intended to cure major complaints from cities and counties.
The legislation now before House and Senate would allow new entrants to obtain a single statewide cable franchise certificate, rather than be forced to negotiate with hundreds of Tennessee cities and counties for permission to operate.
AT&T representatives have consistently argued that any business-burdening regulations are likely to deter it from investing to install the new electronics required for its network to provide video services. AT&T argues that only market demand and prudent corporate management should determine the pace and extent of its deployments of technologies.