Qwest, CenturyLink Eye State Video Oversight, Officials Say

David Balmer, a Colorado state representative (R), said he’s aware that Qwest is searching for a bill sponsor. But Balmer, who sponsored a bill that failed in 2007 that would have allowed Qwest to seek a statewide cable-franchise agreement, won’t be pushing the bill this year, he said. Qwest might be looking at regulatory changes in other states as well, said the League of Minnesota Cities. The company is interested in this legislative change as its merger with CenturyLink moves closer to final approval, which would give Qwest broader video capabilities, the group said. But no legislation has yet been proposed in Minnesota, it said. The League noted the state legislature enacted a new law in the last session clarifying that cities are authorized to grant a competitive local video franchise to a telecom service provider to serve customers in the area where the provider currently offers local phone services within the city. There are about 600 cities in Minnesota that already franchise cable service operators.

If Qwest is going to propose a bill, the timing is right as the state legislature convened earlier January, said Ken Fellman, general counsel for the Greater Metro Telecommunications Consortium, which represents 34 communities in Colorado. Colorado’s legislative session ends in May. But Qwest has been quiet about it and it’s likely that CenturyLink itself isn’t proposing any franchising bill in the state, Fellman said. Still, local governments are preparing for any potential franchising revamp, he said. So far, nothing has been proposed, a spokesman for Colorado Department of Regulatory Agencies said.

CenturyLink is looking at various other states where statewide video franchising legislation is a possibility, a spokeswoman said. The company will work with state legislatures and municipalities to pass legislation, where needed, “to bring additional video competition to those markets,” she said. CenturyLink’s ability to offer IPTV is dependent in part on quickly securing local and statewide franchises in the operating states, she said. The company currently offers its Prism IPTV service in six markets. Three markets (La Crosse, Wis.; Columbia, and Jefferson City, Mo.) are fully deployed. Two markets (Las Vegas and southwest Florida) are scheduled for full commercial rollout this quarter, and a north Florida market is in soft launch now, she said. The company expects to launch an additional two markets in 2011, she said. The company also has a partnership with DirecTV to offer satellite video services. Qwest didn’t say if it’s in talks with state legislators, but emphasized that the video service market is quickly changing and “we continually evaluate the requirements that are necessary for providing these services to our customers,” a Qwest spokesman said.

About 28 states had some form of statewide video regulation, said a University of Minnesota report. Providers have claimed state-level oversight fosters competition because it’s easier for new entrants to secure right to offer services. Many states have also eliminated the condition that new video entrants must offer service to every home in a given municipality, a requirement placed on incumbent cable-TV providers. But Fellman questioned the need for state-level video franchising, saying there’s no evidence of market failure. The video competition system is working, he said.