Wednesday, April 20, 2005

Congress Considers IP-Enabled Video Services

As part of an on-going series of public hearings about how to update the Telecommunications Act of 1996, the U.S. House Energy and Commerce Committee's Subcommittee on Telecommunications heard testimony on how IP-enabled video services could transform the market. Some highlights of the testimony.

Verizon Communications

Verizon could be delayed in bringing FiOS TV to market by outmoded laws and a cumbersome, redundant local franchising process, said Verizon Retail Markets President Robert Ingalls. He argued in favor of a national broadband policy to "promote broadband deployment, new technologies and increased investment."

"As a local telephone company, Verizon has a franchise to operate networks," Ingalls said. "Yet we're being asked to obtain a second franchise to use that same network to offer consumers a choice in video. We believe this redundant franchise process is unnecessary and will delay effective video competition for years unless a federal solution is enacted soon."

Ingalls also said Verizon would be sensitive to the needs and concerns of local communities regarding such matters as franchise fees, local access and public interest content.

SBC Communications

Lea Ann Champion, senior executive vice president of IP Operations and Services for SBC urged legislators and regulators to take a "light-touch" approach to regulating new IP-based services.

"The FCC and Congress have so far employed a light-touch approach to regulating the Internet and IP-based services. We need to extend this minimal regulation approach that has been applied to VoIP -- only now the "V" stands for video," said Champion. "Only then will consumers benefit from the innovation and choice that is just around the corner."

"In short, we are not building a cable network, nor do we have any interest in being a cable company offering traditional cable service. Instead, we intend to offer customers a new total communications experience, one that they can customize to suit their families' needs and tastes," said Champion.

Champion also showcased an upcoming service called HomeZone, which integrates satellite TV programming with high-speed Internet access to provide digital video recording, video on demand, and Internet content including photos and music via a new set-top box. The offering will be available later this year to customers who have access to both SBC | DISH Network and SBC Yahoo! DSL services.


"What matters to consumers, and what should matter to this Congress, is not the technology used to provide the services, but the services themselves. If the consumer views the video service provided by a phone company to be essentially the same as what they got from a cable company, there is no basis for the law to treat them differently based on whether they use a lot of IP, a little IP, or no IP. Like services should be treated alike, and everyone should play by the same rules...

"Instead of having a debate about IP technology, we believe Congress should consider how all multichannel video services should be regulated in the future. Congress should consider the current state of competition and the additional competition that IP video could bring -- and, if the rules are to be changed, they should be changed for all providers", testified David Cohen, Executive VP of Comcast.


"Internet services, that is, those services and products that ride atop or connect to the underlying broadband transport services, should remain largely unregulated and not be subject to the Communications Act. The success of the Internet as a tool for consumers and business has been remarkable, and Congress should proceed carefully so as to inadvertently disturb this accomplishment.

"Consumers should be able to access any site and use any lawful application or device with a broadband connection -- just as they have been able to do in the narrowband world.

"If policy makers act, they should maintain a 'light touch' and act only with respect to those services that give rise to present day policy questions."

"Where subject to regulation, Internet services should be subject exclusive to Federal jurisdiction and Congress should protect IP services from conflicting and overlapping State regulation, testified Paul Mitchell, Senior Director and General Manager of Microsoft's TV Division.

National Association of Broadcasters

"If new technologies can override program exclusivity rights of local (TV) stations by offering the same programs on stations imported from other markets, or effectively block their subscribers access to local signals, the viability of local TV stations -- and their ability to serve their communities with the highest-quality programming -- is put at risk. To preserve this public access to free-over-the-air television, policy-makers must continue to support the principles of localism and local station program exclusivity," testified Gregory Schmidt, speaking on behalf of the National Association of Broadcasters.

American Cable Association

"As you analyze what rules should be in place in an IP-based market place, I believe you must review whether the current analog rules are really providing consumers with the 'best television money can buy.' Now is the time to discard the rules that 1) force consumers to take programming they do not want; 2) allow media consortiums to raise prices with no regard to what consumers value; 3) hide the reasons for higher rates from the Congress, the FCC, the local franchising authorities and consumers alike; and 4) fail to harness the greatest of American tools, a free market to spur diverse and new programming," testified James M. Gleason, Chairman of the American Cable Association

An archived webcast of the hearing is online.

See also