House Passes Video Franchise Reform

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House Energy & Commerce Committee Chairman Joe Barton Thursday delivered on his half of a promise to pass video franchise reform in this session of Congress.

By a vote of 321 to 101, including a majority of both Republicans (215-8) and Democrats (106-92), the House Thursday night passed a bill that will make it easier for telcos to get into video by establishing a national franchising scheme that potentially deeds more oversight of video franchising to the FCC and federal courts.

In a big victory for the phone companies, a strong network neutrality amendment introduced by Senator Ed Markey (D-Mass.) was defeated 269 to 152, with all but 11 Republicans voting against and 58 Democrats joining them.

Instead a vast majority--353 to 58--opted for an amendment introduced by Barton's fellow Texan, Republican Lamar Smith, that simply said that nothing in the bill's granting of the FCC authority to adjudicate network neutrality complaints affects applicable antitrust laws.

Opponents of that amendment called it an "empty shell" that appeared to address network neutrality but instead did nothing, since they argued antitrust law would apply anyway.

Zoe Lofgren (D-Calif.), said during the debate that: "The dome is going to collapse with the uproar," if there is not strong network neutrality language in the bill.

Nonetheless, two thirds of Democrats voted for the Smith amendment, as well as all but one Republican. One disappointed Democrat suggested it was a way to appear to have supported net neutrality without having to do so.

Among the amendments adopted were ones on network neutrality, though not the version Democrats had pushed for, as well as one putting a shot clock on resolving franchise fee disputes, giving localities a little more muscle in resolving consumer protection complaints, one boosting to $750,000 per day the FCC penalty for denial of access to service because of income (it had been $500,000), and one preserving the FCC's ability to add cable phone service (VoIP) to those who must pay into a fund (the Universal Service Fund) to help underwrite communications services for rural and underserved areas.

Barton also amended the bill to clarify 1) what constitutes a franchise area; 2) that national franchisees must comply with FCC requirements on consumer protection and customer service; and 3) that franchees must comply with existing cable regs save those excepted in the new bill.

Telcos were quick to praise passage: "“Today’s overwhelming vote brings our nation one critical step closer to TV freedom, where consumers enjoy the benefits of real choice and competition for their video service," said US Telecom Association President Walter McCormick, "Consumers win when companies are free to invest and compete head-to-head by offering innovative products at attractive prices. "

Peter Davidson, Verizon senior VP, government relations, echoed that enthusiasm: "Consumers won a major victory with tonight’s passage of the videochoice bill. The size of the bipartisan vote increases the momentum for a similar Senate bill. The benefits of competition – more choice, better services and lower prices – are now within reach this year."

Then there was the telco-backed Consumer For Cable Choice, one of seemingly dozens of "grassroots" groups that popped up on one side or the other of the bill: "Consumers across the country celebrate the bipartisan passage of the COPE Act and thank the congressional leaders who stood up for them today."
On the other side, net nNeutrality backers, the It's Our Internet Coalition, said it would look to the Senate for help: While today's vote was a disappointment, we’re not surprised, nor are we discouraged," they said in a statement.  "Net Neutrality now moves to the Senate, where Senators Olympia Snowe (R-ME) and Byron Dorgan (D-ND) have already introduced a bi-partisan, pro net neutrality bill that we strongly support."

In addition, they said, "we are confident that as more Americans learn what is at stake, Congress will act to protect Net Neutrality in a meaningful way."

Then, there was the Hands Off The Internet coalition.

"With today's vote, bipartisan common sense won out over the bottom lines of a few big online companies,"said co-chairman Mike McCurry, "The Google-eBay-Microsoft lobbying effort failed because of the inherent and obvious flaw of 'neutrality' regulations: They would dramatically shift the cost of building tomorrow's Internet onto the backs of consumers."

The Senate plans to hold a hearing--June 13-- and a markup--June 20--on its version of video franchise reform. Senate Commerce Committee Chairman Ted Stevens (R-Alaska) has said he may amend his latest draft after seeing what the House did.

If it ultimately passes in that body, and it is currently a very different bill with many additional elements including the broadcast flag and wireless spectrum provisions, the Senate bill must be reconciled in conference.
Congress has until the end of July to get a bill to the President's desk, though it could also pass in a likely lame duck session after the November elections.

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