Rep. Ed Markey (D-Mass.) and a bipartisan group of lawmakers on Monday offered legislation permitting telephone entry into the cable TV business and allowing cablers to become local telephone service providers.
Markey, who heads the House telecommunications subcommittee, called the bill the “roadmap for building the information superhighway” and he predicted passage of the complex measure by late 1994. Joining Markey at the press conference were Rep. Jack Fields (R-Texas), the ranking Republican on the Markey panel, and Reps. Rick Boucher (D-Va.), Mike Oxley (R-Ohio) and Paul Gillmor (R-Ohio).
Highlights of the legislation include:
o Elimination of a 1984 congressional law barring telephone companies from providing video programming in local phone areas. Under the bill, telcos would be required to establish a “video platform” guaranteeing access toall programmers. Telcos could own up to 25% of the programming on the platform.
o Lingo allowing cable operators and other telecommunications providers to offer local telephone service.
o A provision pledging universal access to local telephone service at affordable rates.
o A directive ordering the Federal Communications Commission to study the feasibility of digital compression technology for all local phone subscribers.
For Hollywood, the telco-into-cable provision is clearly the most important. Tom Tauke, head of government relations for Gotham-based Nynex, said the bill is “good news for Hollywood because it increases the number of routes for programming.”
Similar telco-into-cable legislation is pending in the Senate.
Under the bill, telcos would be barred from buying cable systems within their service regions, except in rural areas or where a cabler might be facing bankruptcy. Telcos would be required to form a separate video programming subsidiary to protect phone customers from cross-subsidization.
Further, telcos would be required to pay franchise fees to local governments to provide cable service, although a franchise itself would not be required.
The cable TV industry is likely to oppose the Markey bill.