Inouye Proposes Cable, City Friendly Franchise Reform
Sens. Burns (R-Mont.) and Inouye (D-Hawaii) proposed franchise reforms friendly to cable and to city desires to keep some local control over a process Verizon calls cumbersome. The “principles for video franchising reform” drew praise from the National League of Cities. Video services should be regulated similarly regardless of the provider, the Senate Commerce Committee members said. “State or local franchise authorities should retain the authority to supervise rights of way use,” a written statement said late Thurs.
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FCC’s Title 6 cable operator regulations are “deliberately structured,” said the proposal. AT&T, starting sales of IPTV service, has argued it shouldn’t come under all such rules. The proposal said obstacles to reform should be eliminated, and procedural timetables could be established to ensure a franchising authority decision by a date certain. It says responsibilities of franchisees should be similar, though not necessarily identical. “We have significant concerns that the principles released today will perpetuate the status quo,” said an AT&T spokeswoman. That could force “new entrants into negotiations with thousands of entities… resulting in thousands of different sets of rules governing broadband deployment,” she said, adding that this would delay competition.
The Burns/Inouye principles say the Title 6 rules ensure “state and local authorities have primary responsibility for administration the franchising process within certain federal limits.” Verizon had no comment immediately.
The proposal comes less than a week after NCTA and Verizon outlined similar plans for franchising reform, which the FCC is examining. Officials of the cable group and the phone firm separately discussed proposals to give new entrants a fixed time to negotiate franchises with a municipality (CD Jan 31 p3). Officials at NCTA had no immediate comment. The National League of Cities is “delighted” at the central role accorded localities, said an official. “It is an important step to open up the debate more broadly than it has been thus far,” said Cheryl Leanza, principal legislative counsel.
“At first glance this seems to be a pretty cable- friendly proposal,” said Stanford Washington Research Group’s Paul Gallant, a former FCC 8th floor staffer. “It seems to encourage franchise reform in a way that does not give telephone companies any dramatic new advantages over cable companies.”
It’s unclear if the principles would lay a foundation for future legislation or merely be a point of discussion as the Senate committee takes up telecom reform. Sen. Ensign (R-Nev.), who introduced a telecom reform bill with a video franchising component, expressed strong concern about the Burns-Inouye ideas. “Congress has the ability to streamline this video franchising process to bring consumers new choices in video, but these principles won’t do the trick,” he said. The suggestions from Burns and Inouye don’t go far enough to speed the arrival of video competition, because the approach they espouse would require “expensive and time-consuming” negotiations with thousands of cable franchise regulators across the country, said Ensign.
The Burns-Inouye move is seen as a preemptive strike in advance of a Feb. 15 hearing on video franchising, said some Senate staffers. It’s rare for Sen. Inouye to act apart from Commerce Committee Chmn. Stevens (R-Alaska). But the principles make clear that Democrats are concerned about cities’ rights in franchising. That may bolster cable’s position to make it harder on new entrants. The losers would be Bell companies and other new entrants; they would have to endure local franchising rather than enjoy the streamlined procedures Ensign’s bill and other proposed federal legislation envisions. The Burns-Inouye principles refer to “procedural timetables” if applications encounter unnecessary delays, but the bottom line is that the principles “"maintain status quo,” said a Senate aide.