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Burns, Inouye Team on Video Franchise Principles - Broadcasting & Cable

Burns, Inouye Team on Video Franchise Principles

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Ranking Senate Commerce Committee member Conrad Burns (R-Mont.) and Co-Chairman Daniel Inouye (D-Hawaii) have released a "series of principles" they say are "essential" to any video-franchising reform legislation.

Essentially, they are backing streamlining the process, with the caveat that state and localities must not be stripped of their authority; that terms for new entrants, like cable video, should be essentially the same as for incumbents; and that the playing field should be technologically neutral, or as they put it: "Definitional arbitrage on the basis of a particular technology should not be permitted."

Telephone companies like Verizon and SBC are pushing hard for changes to state and federal law that will free them from the time-consuming local-franchise negotiating process, arguing that the government has a compelling interest in doing so in order to speed the rollout of broadband and price and service competition to cable.

The legislators' three main principles:

Recognize and Reaffirm the Role of States and Localities in the Video Franchising Process. 

"The regulation of video services under Title VI relies upon a type of  'deliberately structured dualism' where state and local authorities have primary responsibility for administration of the franchising process within certain federal limits.  Because each community may be unique, this framework recognizes that the local franchising authority is uniquely positioned to ensure that video providers meet each community’s needs and interests in a fair and equitable manner, and are most effective in seeing that provider obligations are enforced.  The Federal government has neither the resources nor the expertise to address such issues. 

"Consistent with existing law, state or local franchise authorities should retain the authority to supervise rights-of-way use and recover the associated costs, to require the payment of a reasonable franchise fee, and to require sufficient outlets for local expression and appropriate institutional network obligations."

Promote Competition by Facilitating Speedy Entry on Fair Terms.

"Video Franchise Reform should promote competition in video services.  Obstacles to reform that result in unnecessary procedural delay should be eliminated.  If the current process results in unnecessary delay, procedural timetables could be established to ensure a decision by the relevant franchising authority by a date certain. 

"Nevertheless, the desire for a process facilitating swift entry should not result in a blank check for would-be competitors.  Instead, franchising authorities must ensure that similar (though not necessarily identical) responsibilities attend to any would-be franchisee, so that consumers throughout the franchise area can enjoy the benefits of such services on a non-discriminatory basis." 

Promote Competitive Neutrality and a Level Playing Field.

"The regulatory regime should be the same for providers of video services where the operator, and not the consumer, controls the video content offering.  Definitional arbitrage on the basis of a particular technology should not be permitted.

"The franchising process should be designed to promote fairness for consumers in local communities and to promote a level playing field for providers.  If a competitive entrant negotiates better terms and conditions for a franchise, other providers in that community should be entitled to adopt those same terms and conditions."

The Committee had planned to hold a hearing on the franchising issue Jan. 31, but had to postpone it to Feb. 15 so committee members could participate in the vote on the nomination of Samuel Alito, and because Senator John Ensign (R-Nev.) couldn't make the hearing after he was in an auto accident in his home state.

Ensign last July introduced sweeping and controversial legislation that would eliminate the need for cable, telephone company, or any other pay-TV provider to obtain local or state franchises.

Existing cable franchises also would be eliminated under his bill, which is to be a big topic of conversation at the hearing.

Ensign said Thursday he thought the principles did not go far enough:

"“While I appreciate my colleagues recognize that there are problems with the current video franchising process, these principles do not go far enough to speed arrival of video competition for consumers.

“These principles would say that new entrants into the video market would have to go conduct expensive and time consuming negotiations with the thousands of cable franchise regulators across the country. 

“Consumers are denied new choices in video programming, and price competition every day that these unnecessary negotiations drag on across the country.

“Congress has the ability to streamline this video franchising process to bring consumers new choices in video, but these principles won’t do the trick.”

Missing from the statement of guiding principles was the name of Committee Chairman Ted Stevens (R-Alaska), but according to Andy Davis, communications director for the minority, Stevens had been briefed and given a heads-up that it was being circulated among the members.

Majority Communications Director Melanie Alvord concurred, saying Stevens is "supportive of Senator Burns and Co-Chairman Inouye sharing their principles on video franchising, as he has been supportive of other Committee Members who have done the same in recent weeks and months on a variety of communications issues."

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