Schwarzenegger Signs Pay-TV Deregulation Bill Devoid of Consumer Protections As Telecom Money Greases Bipartisan Support

To: National Desk

Contact: Jamie Court of the Foundation for Taxpayer
and Consumer Rights, 310-392-0522 ext. 327 or
jamie@consumerwatchdog.org

SANTA MONICA, Calif., Sep. 29 /U.S. Newswire/ -- The
Foundation for Taxpayer and Consumer Rights said
pay-tv deregulation signed today by Governor Arnold
Schwarzenegger threatens consumers with higher prices,
inequitable access and poorer customer service because
of the loss of local accountability under the
legislation and the failure to compensate for it with
new consumer protections. The bill was authored by
Assembly Speaker Fabian Nunez.

"This deregulation legislation is the biggest gift to
any special interest in Sacramento this year," said
FTCR president Jamie Court. "The legislature and the
governor took power from cities and from consumers to
give to the AT&Ts, the Verizons and the TimeWarners
without adding necessary consumer protections. Shame
on the Governor and the Speaker for pandering to
telecom and cable companies that have pumped up their
parties' campaign war chests with millions of dollars.
500 local franchise agreements have basically been
replaced with an application form that has few
requirements."

Governor Schwarzenegger has received $284,940 in
campaign contributed from AT&T, SBC (AT&T's parent)
and Verizon -– the main beneficiaries of the bill. The
California Cable and Telecommunications PAC
contributed $54,600 to Schwarzenegger.

The bill would grant telephone companies and current
cable television providers a statewide franchise
without statewide enforcement of consumer rights or
terms of service. Localities, lacking the power
granted by their current franchise rights, will have
no incentive or avenue of appeal to safeguard
customers from abusive service or deceptive sales of
bundles of video, internet and phone services. The
Public Utilities Commission cannot withdraw
franchises, thus has little leverage over the
companies.

"This will bring as about much competition to the
pay-tv market as Enron brought to the electricity
market," said Court. "The competition without
regulation will be over who cheat consumers the most."

AT&T, while publicly billing the deregulation as
beneficial competition in the video market, has not
promised any rate reductions or other specific
consumer benefits. It has poured nearly $18 million
into lobbying efforts over the last few months, and
$500,000 into direct political contributions during
this election cycle, noted FTCR. That does not include
contribution pledges made during legislators' mad dash
of fund- raising during the last three weeks of the
legislative session.

"The big bucks to leaders of both political parties
that wired passage of this anti-consumer legislation
is the best case for Proposition 89, which eliminates
special interest control over Sacramento," said Court.
"If private campaign contributions are removed from
California politics, this legislation would not stand
a chance of passage."

FTCR supports Proposition 89, the Clean Elections
Initiative, on the November ballot. The voter
initiative would, through broad restrictions on
campaign contributions and voluntary public funding of
candidates, suppress the power of large special
interests to influence legislation and public policy.

Learn more about Proposition 89 at:
http://www.yeson89.org

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