NXTComm Told It’s Too Soon to Judge Video Franchise Order Impact
CHICAGO -- It’s still too soon to gauge the effects of an FCC order easing local franchising for phone companies, said panelists at a sparsely attended NXTcomm panel Monday. “The order has only been in effect since April, and part of it is still under review by the Office of Management and Budget, so we haven’t received a lot of feedback yet,” said Media Bureau Chief Monica Desai. The order has been helpful in “setting some boundaries” for municipal governments in franchise talks, but state franchise laws have exerted more noticeable change on the process, said David Young, Verizon vice president of regulatory affairs. Cable officials wait eagerly to see how their industry will fare under the new regime, said Cox Regulatory Affairs Vice President Alexandra Wilson.
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Together, the FCC order and state rules like it have done much to lower the bar for competitive entry into multichannel video programming distribution (MVPD) markets, said USTelecom Policy Vice President Glenn Reynolds. The industry group will focus its video policy efforts on programming issues, he said: “The next big battleground is going to be content. We're going to spend a lot of time arguing about access to content.” One venue in which USTelecom will be active is a freshly-issued U.S. Copyright Office notice of inquiry on compulsory video licenses, he said. The group wants to make sure the copyright rules are “technology-neutral,” he said.
Access to sports programming is another issue on which telcos will be vocal, Young said: “If there was going to be a blowup, I think that’s where it would be.” A ban on exclusive programming contracts for networks owned by cable operators expires in October, but Verizon and others want the FCC to extend and broaden those rules. As they stand, the rules only apply to programming delivered via satellite. “More and more, you're seeing programming distributed terrestrially over high bandwidth fiber lines,” said Young.
As they succeed as MVPDs, phone companies probably will fund programming, Reynolds said: “I think it’s safe to say the larger companies are going to start wanting to develop content. I think there’s a pretty good chance that in some way… they'll do it.” FCC Chairman Kevin Martin’s goal of mandating an a la carte pricing regime among MVPDs is largely out of telcos’ hands, Reynolds said. Programmers won’t allow it because they believe it spells financial ruin for them, he said: “Our members don’t control the rights to the content. If the programmers don’t allow us to offer a la carte, we can’t offer a la carte.”