Phone companies get a break with FCC vote

Cable industry slams video franchise decision

After contentious debate, the Federal Communications Commission voted along party lines Wednesday to impose a 90-day time limit on local video franchising negotiations and also limit build-out requirements on phone companies trying to compete with cablers.

The time limit would require local authorities to give a yes or no answer within 90 days to an applicant who wants to provide video services. The build-out limit would let phone companies start providing video services without wiring every residence in a community.

The overall effect of the two measures is to make it easier for phone companies to compete with cablers in providing television service.

Response has been swift and strong, including a threatened lawsuit by the National Cable & Telecommunications Assn.

FCC chairman Kevin J. Martin was joined by GOP colleagues and commissioners Robert McDowell and Deborah Taylor Tate in voting to promote what they claim will be increased competition in video delivery services that would benefit consumers.

But Democratic commissioner Jonathan Adelstein blasted the decision, the goals of which he said are “laudable. But while I support these goals, today’s item goes out on a limb in asserting federal authority to preempt local governments, and then saws the limb off with a highly dubious legal and policy scheme that substitutes our judgment as to what is reasonable for that of local officials — all in violation of the franchising framework established in the Communications Act.”

Martin said the decision was a necessary remedy because of reports he’d received that many local authorities were “unreasonably” withholding franchise grants from phone companies attempting to gain market entry.

In a conference call with reporters after the vote, NCTA prexy Kyle McSlarrow would not rule out a court challenge of the limits and even said that such a challenge was likely.

Don Borut, exec director of the National League of Cities, said in a statement, “We are confounded by today’s decision that would systematically block the ability of local governments to protect their citizens, local assets and revenues. It is not in the best interest of America’s taxpaying public; it is not in the best interest of our citizens who own the public rights of way; it is not in the best interest of the widest number of consumers, who, depending on where they live or how much they are willing to spend, may be shut out from the most up-to-date technology by companies seeking to service only the most well-to-do neighborhoods.”

Gary Lytle, senior VP for Qwest, said, “On the eve of yet another rate increase by the cable industry, today’s video franchising order by the FCC is an important first step in bringing competition for video services to local communities and providing consumers with better choices and lower prices.”

According to the Associated Press, the incoming chairman of the House Energy & Commerce Committee, Rep. John Dingell (D-Mich.), is questioning whether the FCC has the legal authority to impose the franchising time limits.

Dingell has written Martin, asking him to provide “statutory and legal citations” for imposing the limits.

The vote came on the same day that Martin released a report showing that from 1995 to 2005, cable subscription rates increased an average of 93%.