Do you think Memphis and the Internet should be in the hands of some tycoons in cahoots with the people who bring you cable TV or some other tycoons in cahoots with the people who bring you tap water and electricity?
A simplification for sure, but not an unfair one, I think, of the debate over Memphis Networx, the fledgling company that wants to horn into the big business of telecommunications.
Offhand, I can’t think of a more interesting, important news story that has been presented in such a boring, overly technical, legalistic fashion. I suspect this is part of the strategy of Time Warner and other opponents of Memphis Networx. If so, it’s working.
Last Sunday, Dean Deyo, president of the Mid-South Division of Time Warner Communications, wrote in The Commercial Appeal that “Memphis Networx is a poorly conceived plan with an underprepared business partner and too much risk for the public to assume.”
Good old Time Warner, always watching out for the public’s interest, whether it’s limiting our “risk” or shoving Howard Stern down our throats.
The recent coverage of Memphis Networx has focused on hearings before the Tennessee Regulatory Authority (TRA) in Nashville. If you want to make a Memphis news editor squirm, propose a juicy story set in the hearing chamber of a regulatory agency 200 miles away. Hold the hearings over a span of several weeks. Let the lawyers run on for hours. Make it difficult for local reporters to cover the story, although, to its credit, The Commercial Appealdid just that.
If it’s all right with Time Warner, let’s review the players.
Memphis Networx is a partnership of Memphis Light Gas and Water and an Oklahoma-based company called A&L Construction. The letters refer to founder Alex Lowe. He wears a cowboy hat and sometimes makes blunt, folksy statements. A&L Construction is a “hole-digging” company that does pipelines and the like. MLGW you already know. The utility company has gobs of real estate and right-of-way, which is a handy thing to have if you’re talking about bringing the Internet to Everyman.
Time Warner Communications is our friendly cable company. If you have a television, you probably send them a check each month for anywhere from $12 to $35 or more for cable. It is the operating philosophy of Time Warner that a customer who wants to watch, say, the Atlanta Braves on TBS should also have to pay for a couple of stations that broadcast church services, black-and-white sitcom reruns, public access programs where people sit in front of potted plants and talk to each other, and Howard Stern, the famous talk-show host who asks his female “guests” to take off their clothes (they usually do). This is the minimally enhanced “basic” cable package.
If you want CNN and ESPN, you’ll have to upgrade to another package that costs more. And of course you will get even more channels you don’t want but Time Warner, in its wisdom, thinks you should have in the bargain.
One way or another, you get what is on Time Warner’s menu, and you pay what Time Warner says you should pay.
Time Warner’s partner — sorry, I almost said partner in crime — is America On Line. AOL also gives its customers a fixed-price menu of channels. You want e-mail, stock quotes, and sports scores. You get recipes, child-raising tips, and vacation destinations for 21bucks a month. And you get AOL tech support for all those troublesome crashes. That is if you can get through to a live person (in Utah). After you do, or while you’re on hold, AOL tells you about some exciting commercial opportunities, usually under the guise of saving money on your AOL bill.
Last year the chairman of AOL, Steve Case, made $326.7 million. The president of AOL, Robert Pittman, earned $134.3 million. Maybe this is what Deyo had in mind when he warned us about “risky ventures” that “duplicate services that are already competitively provided by the private sector.”
Memphis Networx wants to build a fiber-optic telecommunications network. Experts say fiber-optic networks will eventually make using the internet as simple as using a telephone or a television. Those of us old enough to remember black-and-white televisions, rabbit-ears antennas, and shaky pictures can appreciate this even if we don’t understand the technical side.
We have already seen how Time Warner and AOL dole out programming and services to maximize profits. If these guys ran MLGW, “basic” customers would probably have to get Jungle Juice in addition to water, while “premium” service would also include Jack Daniels. Want electricity? Sure, would that be 110, 220, or the special 24-hour movie package?
Is there risk and uncertainty in Memphis Networx? Of course there is. There was risk in The Pyramid, Nonconnah Parkway, and the interstate highway system. Deyo warns that a residential fiber-optic network in Memphis could cost more than $300 million. Gee, that would be $26 million less than Steve Case earned in one year.
But there’s upside too. The participation of MLGW in Memphis Networx brings with it the possibility of universal access, local ownership, the economies of a public utility’s infrastructure, and profit tempered by public interest. Understandably, unions are concerned about who will do the hole-digging and make the connections. But that is a secondary issue, like who pours the concrete for the interstate highways and airport runways.
The bigger issue is whether Time Warner and AOL should tell the public what is too “risky.” Let’s hope the TRA takes that advice with a huge dose of salt.
(You can write John Branston at branston @memphismagazine.com)
