Picture Fuzzy for Video Franchise Bills

The “Video Choice Act of 2005” already appears doomed in the House of Representatives and possibly in the Senate as well, Light Reading has learned (see Cable Shrugs at Video Franchise Bill). The Video Choice Act, of which there is a House and a Senate version, exempts telephone companies from having to get local video franchises before they offer TV service. The bills were introduced June 30, and both are awaiting hearings.

A source in the House Committee on Energy and Commerce says the committee chairman, Rep. Joe Barton (R-Texas), believes broader legislation amending the Telecommunications Act of 1996 is needed to address the many telecom issues now before Congress. As such, the Video Choice Act has not been scheduled for discussion and mark-up in Barton's committee.

The Senate version of the bill may be heading toward the same fate. The bill has been assigned to the Senate Committee on Commerce, Science, and Transportation and also has not been scheduled for a hearing.

A Senate committee spokesman tells Light Reading the committee chairman, Ted Stevens (R-Alaska), is still wavering on whether to hold hearings on the Video Choice Act, or to roll it into a broader telecom bill.

The Senate committee has already received a long list of issues the industry hopes it will address this session, the spokesman says.

The big phone companies are responding to competitive pressures to bring their video services to market in order to compete against cable and satellite triple-play bundles. The removal of the local franchising burden would make it much easier for them to offer video services quickly.

Should the video franchising legislation become part of a larger bill, the bill will take longer to make its way through Congress -- which won't help telco TV players such as SBC Communications Inc. (NYSE: SBC) and Verizon Communications Inc. (NYSE: VZ).

Meanwhile, the RBOCs are moving forward with plans to bring their video offerings to market. Verizon has already begun obtaining local franchises, while SBC has maintained publicly it is exempt from the franchises, while, at the same time, working hard to bring about a legislative solution (see Verizon Sets TV Precedent and SBC on TV Franchise Regs: We're Immune).

— Mark Sullivan, Reporter, Light Reading