Milwaukee Making Big Mistake

Published December 22, 2006

To the Editor,

Milwaukee is being incredibly short-sighted in halting a multi-million-dollar fiber-optic upgrade in an effort to grasp for a few extra tax dollars (“City sues AT&T over Internet TV offering,” Dec. 21, 2006). As consumer advocates of all stripes point to lagging U.S. broadband deployment, the city is going to court to stop a leading company from rolling out the advanced broadband services area consumers want and need.

Milwaukee is in no way justified in demanding AT&T pay an extra “franchise fee” because data containing video programming, as opposed to e-mails or phone calls, is being transmitted over its network. In terms of its use of right-of-way and its right to upgrade its network, AT&T is abiding by all terms and agreements it has with the city. It’s the city that’s attempting to change the rules, at needless cost to consumers.

AT&T’s U-verse service is not a multichannel cable television service, but instead relies on the same technology–the Internet Protocol–that connects users to the Internet and the World Wide Web. Unlike cable, IP television programming is not received at a local satellite center and aggregated down a cable hundreds of channels at one time. Instead, like all Internet content, it downloads in the form of a data stream from a distant server, which allows for innovative pricing and packaging schemes that are not cost-effective under the conventional cable model, including “a la carte” programming. This is just one of the many service and price options Milwaukee is delaying through its ill-thought legal action.

In cities and states around the country where new providers have launched competitive video services, including AT&T’s U-verse and Verizon’s FiOS, prices drop and service improves. Milwaukee should drop its groundless lawsuit immediately and allow city residents the right to enjoy broadband services delivered from new platforms that are both innovative and cost-effective.

Steven Titch ([email protected]) is senior fellow for IT and telecom policy with the Chicago-based Heartland Institute and managing editor of its monthly publication, IT&T News.