Broadband Cable Association of Pennsylvania

When it came to her cable TV service, Shirley Koontz said she was "not a happy camper." There were no other cable providers, so she decided to switch from Comcast to DirecTV satellite. "It was the customer service and not getting what you paid for that really had me upset," she said. "I'm extremely happy with satellite." Cable customers have plenty of choices when it comes to programming, but most local areas are served by only one cable provider. "The only option if you don't like Comcast is to unplug your cable and go with rabbit ears -- but there are only a few over-the-air channels -- or get some kind of satellite," said Joe Borrell, associate professor of communications at Shippensburg University. Embarq, the local incumbent exchange carrier, provides TV service through Dish Network, a satellite provider. However, satellite may not have been an option for Tom Neveil of Chambersburg because of possible reception issues. He said he considered switching after he became frustrated with Comcast earlier this year when he and other "expanded basic" subscribers had to get a digital converter box to view four channels. "Service-wise, I have no complaints. Service has always been reliable and prompt, but it's just the way they do business," he said. David Finch, assistant borough manager for Chambersburg, said the borough would welcome more cable competition, but in reality, it's not likely. "Someone would have to come in and essentially rewire the town," Finch said. Comcast and other cable companies operate in areas where they have franchise agreements in place with the municipality. Cable franchise agreements are nonexclusive, meaning more than one company can forge an agreement with the municipality, but competition isn't rushing in. Chambersburg borough council President Bill McLaughlin said no other companies have approached the borough about deploying a cable TV system. "One word: Cost. The cost involved in running cable in a community the size of Chambersburg prohibits anyone else from coming in and providing direct competition," McLaughlin said. "I'm a big believer in competition, but you have to look at the economic reality." Matt Jackson, associate professor of communications at Penn State University, added it is especially difficult for a second company to enter a market. "The reason you don't have new companies is if the market is very small, they just don't see a big enough profit margin to make the investment," he said. "Typically the incumbent company has a strong advantage. Once you run your wires down the street, you have to sign up as many as you can to pay for the infrastructure. Let's say on a street you have six out of 10 sign with Comcast. If Verizon comes, they can hope at best three will join, maybe take two away and add one new house." Though Comcast is the only cable provider in most areas of Franklin County, spokesman Gabriel Weissman said the company is in a competitive market. "Competition is really nothing new for us," he said. "We're competing on every level in our business and have been for years in Chambersburg." Studies by the FCC have shown that in cities where there is competition among cable providers, prices are slightly lower; in the most recent report, the difference was about $3 a month. Jackson said while the price difference is often not dramatic, in areas where there is more competition, price increases may be slower or customers may see more added services. In the Harrisburg area, the Capital Region Council of Governments recently forged a tentative agreement with Verizon to deploy Verizon cable services in 31 municipalities. Council Executive Director Perry Albert said he hopes that added competition will lower prices, but he said currently the competition between satellite and cable is already "apples to apples." In Anne Arundel County, Md., where four cable companies are competing for customers, cable administrator John Lyons said the competition did have a major impact on pricing, even after Verizon entered the cable market in 2006. Still, he said, with more competition, customers win. "The majority of the county residents have a choice," he said. "If they're not happy with one service, they can switch."

Cable companies operate in municipalities where they have franchise agreements in place. The agreement establishes the responsibilities of the cable provider, including provisions for customer service and providing service to schools and government. By federal law, municipalities are allowed to collect franchise fees in exchange for use of the streets, rights of way and easements. In Chambersburg's franchise agreement, which expires in 2010, Comcast is required to pay the borough 5 percent of gross annual revenue received from the operation of the system. In the 2008 budget, the borough budgeted $250,000 in revenue from franchise fees. Matt Jackson, associate professor of communications at Penn State University, said some states allow statewide franchise agreements. "That way, instead of going to every single municipality like Chambersburg or Lock Haven, they only need to negotiate with the state. Some states have them, Pennsylvania is not one of them." he said. "About 10 states already have the law, and 12 are currently considering them."

Brian Herrmann, director of communications for the Broadband Cable Association of Pennsylvania, said a statewide cable franchise agreement would be "unnecessary." "There's certainly no need for statewide franchising," he said. "We've been competing for years, and the system that's in place works very well for customers. The relationship between cable operators and municipalities has been a productive one. Local government entities are in the best position to negotiate agreements with video providers." While there is no statewide franchise agreement in Pennsylvania, two large metro areas are currently working on agreements. Verizon is reportedly working on a cable franchise agreement with the city of Pittsburgh. In the Harrisburg area, the Capital Region Council of Governments recently forged a tentative agreement with Verizon. Copies of the agreement are to be signed by the 31 municipalities by Oct. 31. Chambersburg Public Opinion