CenturyLink is getting closer to entering the Minneapolis cable market, though the company may still face a tough challenge in convincing the City Council that its plan will pass legal muster.
The council’s Ways and Means Committee voted Monday to allow the city to enter into negotiations with CenturyLink, which wants to introduce its Prism TV cable service into a market that’s currently served by a single provider: Comcast. The committee’s recommendation will be forwarded to the full council for a vote.
CenturyLink’s plan to roll out its cable service over time, rather than providing it to the entire city right away, has stirred criticism from Comcast and a handful of residents who wrote letters and spoke at a February public hearing. It’s also being scrutinized by Council Member Elizabeth Glidden, who said Monday that she’s concerned because CenturyLink has yet to provide a detailed timeline for its new offerings or a map of which neighborhoods it would serve.
“I can’t imagine a scenario where I, at least, would vote to approve a franchise agreement that included only the information that is presented today in the application,” she said.
Glidden said the city needs more information to figure out if CenturyLink’s proposal meets the requirements of both state and federal laws that govern franchise services.
That determination will be a complicated one. Minnesota law prohibits cities from issuing new franchises with conditions that are “more favorable or less burdensome” than those issued to other franchise holders, including in the area they serve. In addition, there is a section of state law with specific rules for how quickly franchise holders must build out their systems.
But a ruling by the Federal Communications Commission concluded that build-out requirements have a negative impact on competition and that “new entrants” into a market shouldn’t be forced to begin with a fully constructed system. CenturyLink officials argue that the federal ruling should take precedence over the state regulations.
While a report by city officials recommended that the city enter into negotiations with CenturyLink, it also concedes that the city is “left with a difficult choice.”
If the city is too cautious and requires a tight build-out timeline, it may risk losing an opportunity to encourage competition and potentially bring additional jobs to Minneapolis. On the other hand, the report suggests that the city could risk an “error on the side of competition.”
“Litigation may be inevitable with either choice,” the report concludes.