Commerce Minds Meeting on National Franchise

House Commerce Committee Chairman Joe Barton (R-Tex.) has reportedly come to a meeting of the minds with key Republicans and Democratic committee members over a national video franchising scheme.

The committee press staff would not confirm the agreement, but according to a cable industry source, the bill would establish a national franchise for telcos and other new multichannel video entrants, give incumbents a similar franchise once the new entrant had penetrated 15% of households in a market, and institute price controls by mandating that any price cuts must be extended across the entire system.

It is also said to include a "net neutrality" provision preventing discrimination in the provision of Internet access service and one setting a 6% national franchise fee, 1% more than the traditional 5% cable pays.

 Barton said last week that he would try to hammer out the video franchising language as part of the Committee's rewrite of the 1996 Telecommunications Act, which he wants to mark up this month. Among those he met with were ranking Democrats John Dingell (D-Mich.) and Ed Markey (D-Mass.).

There has been increasing pressure from the administration, at the FCC, and in Congress, to boost the roll-out of broadband service and increase the price and service competition to cable, though the FCC in its latest video competition report suggested their is already video competition from two satellite services and analog broadcasting, as well as IPTV and a growing telco presence.

If the bill shapes up as this compromise suggests, there is little to please cable. Getting a national franchise is not much consolation since it has already spent $100 billion building out its plant and striking sometimes protracted franchising deals.

National Cable & Telecommunications Association President Kyle McSlarrow said he does not normally comment on legislation that he does not yet have language on, but said he had enough conversations with people on the Hill to want to express cable's position on the bill's reported provisions.

He called the national franchise proposal as currently constituted a "huge step backwards in the wrong direction." McSlarrow said NCTA supported taking a "fresh look" at telecommunications regulation as a chance to get it right, which he said was a pro-competitive rewrite that would treat like services alike.

Missing from the bill is opening up voice competition to the telephone companies, he said, which he called the elephant in the room. He appealed to members of Congress to "reconsider the direction they are going."

McSlarrow said that he saw no similar meeting of the minds on the Senate side, saying he expected Senate Commerce Committee Chairman Ted Stevens to hold hearings on the various proposed franchising bills.

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.