Arguably Different Regulatory Treatment of Video Providers Now an Issue in Tempe, Scottsdale, Ariz.

One characterisitc of newly-competitive markets is the entry of suppliers not historically in the deregulated industry. That also tends to mean that legacy regulations, applied differently to companies in different industries, become new issues.

The unfairness is most obvious when companies selling the same services, to the same customers, are treated differently.

It is not immediately clear which clauses of a video services license Scottsdale, Ariz. wants to grant Google Fiber are objectionable to Cox Communications, which has sued to block the awarding of a license because it violates state and federal law.

Presumably, the objection is that the new license imposes fewer requirements than Cox and other licensees must comply with.

Google Fiber already had gotten a video franchise from Tempe, Ariz. that includes waivers of some fees or city codes, but Cox Communications has challenged that award as well.

The lawsuit against the city of Tempe claims the city has enacted regulations specifically to benefit Google Fiber high-speed internet.firms

“As set forth below, the City has violated Federal law in a manner that directly harms Cox by establishing a discriminatory regulatory framework,” the lawsuit says. “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),” the lawsuit argues. “Legally, however, Google Fiber’s proposed video offering is indistinguishable from Cox’s cable service offering.”

Disparate treatment of fundamentally similar from historically-different industries that now actually offer the same services has been an issue for decades.

How much that is the case in Scottsdale and Tempe, Ariz. is not clear. Irrespective of the particulars of those cases, the issue of like treatment of like firms competing in the same markets is an issue.

At a basic level, that is a factor in disputes over the lawfulness of municipal broadband, regulation of voice services, video franchise rules and other obligations levied on “carriers of last resort.”

The rules increasingly are nonsensical, to the extent such rules are applied differently to companies selling the same products, to the same customers.