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Reality Check: Who's Behind TV Ads About Cable Prices

Published On: Jul 10 2006 08:42:47 AM CDT   Updated On: Jul 11 2006 12:24:57 PM CDT

A multi-million dollar television advertising campaign is aiming to sway the public and lawmakers to change telecommunications policy.

The 32-member TV4US coalition has few household names except AT&T, formally SBC. But is has big bucks based on how many TV and newspaper ads are scattered across America.

A coalition spokesperson wouldn't tell WISC-TV how much money was being spent on the campaign. It aims to open up cable video service to phone companies like AT&T and Verizon.

In one ad, viewers see a red line slowly rising diagonally across the screen while the narrator talks about how the price of everything is rising. "If it seems like the things you pay for keep going up, you're right," said the narrator in the ad.

TV4US coalition spokesperson Kelley Gannon said the ads are designed to "educate the public." They're running across the county, and in Madison, to put pressure on Congress to pass the COPE (Communications Opportunity, Promotion and Enhancement Act) Act.

It would drastically change how the cable industry works. The bill allows phone companies, like AT&T, to get a national cable franchise and offer video to any customer in America. Currently, cable companies, like Comcast and Charter Communications, negotiate with local municipalities valid only in that community.

UW telecommunication professor Barry Orton is critical of the campaign, "Here's a phony ad," says Orton. "Here's a group that is a puppet of AT&T."

"What's driving all of this is the desire by AT&T and Verizon, the two big phone companies to get into the cable business and offer video. And they want to do it without local licenses," said Orton.

In the industry, the concept of offering a variety of services, like phone, Internet, video and mobile phone, is called "bundling." Telecommunications outfits think it's the key to future profit. AT&T is already bundling services like home and mobile phone and high speed Internet.

WISC-TV's Reality Check found the claim promising lower rates is misleading.

The ad said: "One thing (cable rates) is certain to come down, by up to 25 percent. That's up to $23 billion in savings nationwide."

Orton disagreed, "They're saying that publicly in the ads but if you read what their president is saying, they're going to price their service about the same."

AT&T's Chairman Edward Whitacre told Wall Street investors last month his company probably won't price below cable competitors. "I don't think there's going to be a price war," said Whitacre in early June, "I think it's going to be a war of value and of services."

TV4US spokesperson Kelley Gannon said it would bring down prices because if consumers aren't happy, they're going to switch to a competitor.

The Cope Act passed out of the U.S. Senate commerce committee in late June. The bill passed the full House of Representatives in early June.

Here's a breakdown of how Wisconsin's eight House members voted:

  • Rep. Mark Green, R-Oneida
  • Rep. Tom Petri, R-Fond du Lac
  • Rep. Paul Ryan, R-Janesville
  • Rep. Ron Kind, D-La Crosse
  • Rep. Tammy Baldwin, D-Madison
  • Rep. Dave Obey, D-Wausau
  • Rep. Gwen Moore, D-Milwaukee
  • Rep. Jim Sensenbrenner, R-Menomenee Falls
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