Franchising Requirements Would be Eased in House, Senate Bills
Companies with public right-of-way access would not need a franchise to provide video services under 2 bipartisan bills introduced Thurs. in the House and Senate. The House bill, by Reps. Blackburn (R-Tenn.) and Wynn (D-Md.) is similar to but not a companion of the Senate bill, by Sens. Rockefeller (D-West. Va.) and Smith (R--Ore.). Both would have new entrants such as telecom companies pay the same fees as incumbent cable operators and make govt. and education channels available.
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“This bill will give Americans greater choices in terms of content options and price benefits,” said Rockefeller. “We'll also benefit from next-generation networks, which will enable consumers greater access to broadband services.” Blackburn stressed the need to revamp “outdated regulations,” saying her bill would encourage local competition among video service providers. Both bills have provisions barring franchise fees from exceeding rates cable operators pay, and the Rockefeller bill says the fees may not exceed a statewide average.
Telcos cheered the bills, while cable has reservations. One committee source said that during the drafting stage cable had grave concerns about the language. “The cable folks are going crazy,” the source said, adding that the industry has failed to forge a “real strategy” for handling entry of competitors. The legislation’s thrust is to ease new entrants’ anxiety about the regulatory process while ensuring fair play for incumbents, sources said.
“These important bipartisan bills are great news for consumers who want choice in television -- and another clear indication Congress means business on an update of our telecommunications laws,” said Peter Davidson, Verizon senior vp-federal govt. relations. “Consumers want an alternative to the cable companies’ annual price hikes,” said Tim McKone, SBC senior vp-federal relations. “SBC is committed to bringing video competition to consumers, and these bills clearly reflect Congress’ intent to promote competition for consumers,” McKone said. USTelecom, formerly USTA, also praised the legislative effort.
NCTA didn’t comment on the bills but in recent talks on the issue NCTA Pres. Kyle McSlarrow has said he doesn’t think any one industry should get a competitive advantage and all industries should compete on a level playing field. Cable also favors a policy in which “like services are treated alike,” a spokesman said.
The National League of Cities (NLC) commended lawmakers for tackling the franchising issue, but the bills “haven’t quite hit the mark,” said Cheryl Leanza, NLC principal legislative counsel. “We're gratified that members of Congress recognize the importance of franchise fees and it appears they intend to protect cities’ control of rights of way, but we're concerned that the elimination of the franchising requirement is going to make it more difficult to manage the right of way,” she said. The alternative is a more lenient regulatory mechanism such as permitting or licensing rules, which might not let cities collect as much data from firms as they do under the franchising agreements, she said.
The advocacy group Consumers for Cable Choice said the bills would give consumers more control over what they watch, access to higher quality service and better pricing and options. “Elected officials will spend a good part of Independence Day weekend with their constituents. They should take that opportunity to ask the American public what it wants from its cable company,” said Robert K. Johnson, the group’s exec. dir. “I''ll bet a package of firecrackers that Americans will say they want freedom to choose their provider. They want more choices.”