Backlash from Cox Communications is slowing down Google Fiber’s march on Arizona. Phoenix and surrounding towns are considered by Google to be “potential” fiber cities, and although no final decision has been made the company is taking the necessary steps to get permission to operate. Not just the standard deal, though. Everywhere it’s gone, Google has asked for particular terms regarding things like master leases for public property, permit processing and, in Arizona, local licenses, similar to cable television franchises in California.
The City of Tempe created a whole new type of license for Google, giving it particular privileges as a video services provider, instead of reckoning it as a garden variety cable company. Cox filed a complaint in federal court, saying it was being treated unfairly by a “discriminatory regulatory framework”…
The City’s regulatory framework imposes substantial statutory and regulatory obligations on providers of video services that the City deems to be cable operators (such as Cox). The City exempts from such rules and obligations providers of video services that the City deems not to be cable operators (such as Google Fiber). Legally, however, Google Fiber’s proposed video offering is indistinguishable from Cox’s cable service offering. The City therefore has no authority or discretion under federal law to exempt Google from franchising and other obligations applicable to cable operators.
The threat of being sued has slowed down the City of Scottsdale, which is delaying a vote on a similar deal. Cox didn’t sue Phoenix when it approved special license terms for Google. One difference might be that Phoenix, like San Antonio, made a point of saying it would consider similar accommodations for incumbents.