Both Sides Swinging as Congress Considers New Competition Laws

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WASHINGTON ( -- An increasingly nasty fight is being waged in advertising over the future of cable as telecommunications companies jockey to compete with cable providers.

’Meet the Phoneys’
A coalition that includes the two major cable associations -- the National Cable Television Association and the American Cable Television Association -- under the name came out swinging with “Meet the Phoneys,” a local TV, cable and print campaign from Strategic Perception, Los Angeles, that launched this week in Washington and may expand to other markets.

Click to see entire ad.

“The Phoneys say they will bring broadband to every neighborhood, while they brag to Wall Street it’s going primarily to the rich,” the spot says. “Now they say that without more sweetheart deals, they won’t be delivering new services. Tell the phoneys no more sweetheart deals.”

Some individual cable companies are also airing some of their own ads.

Telecoms fire back
Telecoms, meanwhile, are spewing their own accusations in ads shown nationally on CNN and Fox News Channel, along with broadcast buys in Washington. “The average cable TV bill has gone up 86% in the past 10 years. How high will it go?” asks one spot that features TVs shooting up like rockets through the roofs of houses. “Today’s technology can bring competition to cable, choice in TV services and lower prices. But cable companies are fighting competition and choice.”

National Media, Alexandria, Va., and the Glover Park Group, Washington, handle the campaign, which comes from the U.S. Telecom Association. The ads refer viewers to a Web site,

The ads come as the House and Senate this week start debating legislation that could spur local competition for cable. The new legislation would relax laws that currently require telephone companies to get franchised city-by-city to provide services. In seeking the legislation, telecoms tout the prospective benefits on cable rate savings and technology changes. Cable providers, on the other hand, say local regulation ensures service to all residents of a city, not just the rich. Cable companies also charge that by pushing for legislative changes, telecoms are simply asking for a handout.

Effects on other media
The debate over franchising could touch other Federal Communications Commission regulations concerning the Internet, TV and even media ownership. Consumer groups worry that legislation could let broadband providers choose among content, giving favored media companies better service at the expense of others.

In a petition to FCC this week, Robert W. Quinn Jr., senior VP-federal relations of AT&T, and James W. Olson, VP-general counsel of U.S. Telecom, complained that some cable companies are refusing to run telecom companies’ ads on local breaks. The two executives called the action “a blatant attempt to stifle competition and hide the uncomfortable truth that cable prices have increased substantially.”

“It’s bad enough that cable companies continue to abuse their video dominance through excessive rates, poor service and few choices in programming packages. Now the cable industry is using its video distribution chokehold to suppress speech,” said the letter, which lists Washington-area cable provider Comcast Spotlight as an offender.

In a statement, Comcast said it would “not run advertisements which contain unsubstantiated, false and misleading claims. This policy is consistent with long-standing and generally-accepted industry practices. These ads are demonstrably false and misleading, and are part of a larger lobbying effort intended to secure preferential legislative treatment for them at the expense of consumers.”

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