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Regulation

Cable Shrugs at Video Franchise Bill

Pending federal legislation exempting “competitive video providers” from obtaining local franchises would considerably ease the entry of the telcos into the TV business, and the cable industry, at least publicly, is saying it is open to the idea (see SBC Sees IPTV Interference and Verizon Attacks Video's 'Biggest Barrier').

Very similar Senate and House versions of a bill known as the “Video Choice Act of 2005” were introduced June 30 and have each been assigned to committee for further discussion and mark-up. The bills stipulate that the franchise exemption is reserved for providers that already have access to public “rights of way” (see Martin: FCC to Classify IP Video).

Similar legislation came to the floor of the Texas State Legislature in May, precipitating an all-out battle for influence among the legions of cable and telecom industry lobbyists on the ground in Austin (see Cable MSOs Call for 'Fair' Franchising and SBC on TV Franchise Regs: We're Immune). But the legislation failed, leaving many on the telco side calling for a “national solution.” Well, that’s what they got -- and now the ball is in cable’s court.

And, if the legislation becomes law, cable operators too would be exempt from local franchising, a welcome relief.

“I don’t think the cable industry has the preconceived notion that anything we could do at the federal, state, or local level could prevent a competitor from entering the business,” says National Cable & Telecommunications Association (NCTA) spokesman Brian Dietz. “It’s already a competitive business in that BBS [broadband service] providers have obtained 25 million subscribers in less than 10 years.

“Cable has responded to its competition by investing in advanced services for its customers,” Dietz says, asserting that the cable industry has invested $10 billion in infrastructure to deliver such things as HDTV, video on demand, and digital video recorders (see Vendors: Cable Clouds Are Clearing).

Maybe cable has changed its tune, but the industry certainly has attemped to block phone company video efforts in the past (see Verizon Sets TV Precedent).

The language in the Video Choice Act appears to anticipate many of the objections voiced (loudly) by municipalities to new laws that would strip them of their franchising power. The bill states that the authority of a state or local government to manage public rights-of-way or to enforce consumer protection laws would not be affected. The legislation “explicitly prohibits” the competitive video provider from “redlining,” or choosing to offer services only to high-income neighborhoods.

The bill also mandates that “competitive video providers” (telcos) pay the same fees to local governments that the cable companies pay now, and that they carry the same local public, educational, and government use channels that cable must.

Verizon Communications Inc. (NYSE: VZ) and SBC Communications Inc. (NYSE: SBC) promptly issued appreciative statements on the day the bills were introduced (see Verizon Sets TV Precedent). “Consumers want an alternative to the cable companies' annual price hikes,” says SBC VP of government relations Tim McKone.

The legislation is sponsored by Sen. Gordon Smith (R-OR) and Sen. John Rockefeller (D-WV), while the House bill is sponsored by Rep. Marsha Blackburn (R-TN) and Rep. Al Wynn (D-MD).

Judging by campaign financing data provided by the Center for Responsive Politics, various elements of the telecommunications lobby have had the ear of all four legislators.

During the last election cycle, the National Association of Broadcasters (NAB) and Qwest Communications International Inc. (NYSE: Q) each gave $15,000 to Senator Smith; Time Warner Inc. (NYSE: TWX) and Viacom Inc. (NYSE: VIA) each gave $12,000; while Microsoft Corp. (Nasdaq: MSFT) was Senator Smith’s third largest donor at $19,000. Senator Rockefeller received $10,000 apiece from the NCTA and the Communications Workers of America.

On the House side, NAB was the top giver to Rep. Blackburn’s campaign at just over $6,000, while BellSouth Corp. (NYSE: BLS) gave $2,000. Rep. Wynn’s No. 1 contributor was radio equipment maker Thales Communications Inc., whose cousin company in Europe sells broadcasting infrastructure gear to cable, satellite, and, more recently, telcos.

Regardless of the fate of the Video Choice Act, the battle in Texas and the impending battle in Washington have caused many to revisit the original thinking behind local franchising. “We believe that the battle for the consumer will be won and lost in the marketplace and not in the regulatory arena,” says the NCTA's Dietz (see Cable Braces for Services Rush).

— Mark Sullivan, Reporter, Light Reading

OldPOTS 12/5/2012 | 3:08:25 AM
re: Cable Shrugs at Video Franchise Bill "But the (Texas) legislation failed, leaving many on the telco side calling for a Gǣnational solution.Gǥ Well, thatGs what they got -- and now the ball is in cableGs court.

And, if the legislation (Video Choice Act of 2005) becomes law, cable operators too would be exempt from local franchising, a welcome relief.

The bills stipulate that the franchise exemption is reserved for providers that already have access to public Gǣrights of wayGǥ

Hum, as rjm predicted (5).
What only two groups qualify for that? And they had to argue that they are not a monopoly, even with a franchise. Duopoly???

OldPOTS
OldPOTS 12/5/2012 | 3:08:24 AM
re: Cable Shrugs at Video Franchise Bill ideologues & cabelcos -

Telcos just checked them to 2P (Internet & Video).
Telcos slow roll 3P? Probably! MS is the excuse!
Tele is regulated! Checkmate by end of the year.
Universaly, everyone must have one tele.

My bet is on satellite!

OldPOTS
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