Full-Court Press on Franchising

Legislators and witnesses generally agreed that some video-franchise reform was needed to spur new video services and the rollout out of high-speed Internet service.

But that was where the meeting of the minds ended Wednesday at a marathon House Commerce Committee Hearing on national video franchising legislation spearheaded by House Commerce Committee Chairman Joe Barton (R-Tex.).

The bill is meant as an update to the 1996 Telecommunications Act, which allowed the telcos to enter the video market.

The bill, in its fourth draft, would grant both new entrants, like telcos, and incumbent cable operators, a 10-year, automatically renewing national franchise to deliver video and bundled services, subject to conditions, like franchise fees and public access channel requirements. The goal is to make it easier for new video competitors to launch service than it is under the locality-by-locality franchise process under which cable was required to build its systems.

The cable industry, not surprisingly, does not favor giving the competition an advantage or reducing cable's ability to get a return on $100 billion in capital expenditures on its networks.

Calling the Barton bill a "significant step forward," National Cable & Telecommunications Association President Kyle McSlarrow said his organization still preferred streamlining the existing local franchising process. NCTA has problems with provisions in the bill that allow municipal broadband networks to compete with private companies, as well as with giving the FCC specific authority to adjudicate complaints about discrimination in the provision of Internet service.

There were others who argued that the FCC had little authority to enforce so-called "network neutrality," which the FCC broadly supports in guidelines issued earlier this year, but has no specific enforcement powers over.

A drumbeat among Senators and witnesses pushing for mandated "network neutrality" was that without it, the "garage entrepreneurs" who built companies like Google and Netscape might never have made it out of the garage.

Barton said that the complaint adjudication authority in the bill was sufficient.

He pointed out that the eight trade association heads who had testified had all provided different definitions of network neutrality, and asked each to submit a written definition to the committee. He argued that the bill properly left it to the FCC to judge violations of network neutrality, "whatever it is," rather than give it rulemaking authority to establish something that no one could even define.

Rep. Ed Markey (D-Mass.) said that relying on an imprecisely worded FCC policy statement rather than enforceable enforceble rules," was unacceptable. Rules insuring network neutrality are indispensableindespensible," he said.

An earlier version of the bill that did have support from ranking Telecom subcommittee member Markey and senior Commerce Democrat John Dingell of Michigan, morphed into a more cable-friendly version last week with the excision of provisions that would have set universal pricing obligations on cable and kept it from gaining a national franchise until the competition had established a foothold.

Dingell Thursday said the bill would create "the broadband eqivalent equivalent gated communities. We should not wirte write at the expense of free Internet," he said. Dingell conceded that some parts of the country would see faster broadband and lower prices, but not the remote or less desirable areas. "The bill violates the fundamental principle of 'first do no harm,' " he said.

Barton has said he has the votes to pass a bill and that the president will sign a version of video franchise reform this legislative session.

Senate Commerce Commitee Committee Ted Stevens is working on a similar bill that will be considered after the Easter break.

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.