Tuesday, December 19, 2006

FCC Votes 3-2 to Ease Video Franchising Process

The FCC voted 3-to-2 to approve new rules that prohibit local franchising authorities from unreasonably refusing to award competitive franchises for the provision of cable services. The vote is a victory for A&T, Verizon and other telephone providers seeking to enter the market for video services.

The majority of FCC commissioners concluded that the current franchising process required by local municipalities constitutes an unreasonable barrier to entry that impedes the achievement of the interrelated federal goals of enhanced cable competition and accelerated broadband deployment.

The new rules would prohibit towns or cities from engaging new market entrants in drawn-out local negotiations with no time limits; unreasonable build-out requirements; unreasonable requests for "in-kind" payments that attempt to subvert the five percent cap on franchise fees; and unreasonable demands with respect to public, educational and government access.

FCC Chairman Kevin J. Martin wrote "Telephone companies are investing billions of dollars to upgrade their networks to provide video. As new providers began actively seeking entry into video markets, we began to hear that some local authorities were making the process of getting franchises unreasonably difficult, despite clear statutory language. The record collected by the Commission in this proceeding cited instances where LFAs sat on applications for more than a year or required extraordinary in kind contributions such as the building of public swimming pools and recreation centers. Such unreasonable requirements are especially troubling because competition is desperately needed in the video market."

In a statement, FCC Commissioner Michael J. Copps, who voted against the measure, wrote: "I have been troubled at the lack of a granular record that would demonstrate that the present franchising system is irretrievably broken and that traditional federal-state-local relationships have to be so thoroughly upended." He also noted that the ruling might exceed the FCC's mandate and therefore draw legal challenges which would further delay network rollouts.