Seidenberg, Whitacre Pledge To Match Cable Fees


Verizon CEO Ivan Seidenberg and AT&T CEO Edward Whitacre pledged to the Senate Commerce Committee Wednesday that their companies were prepared to pay “the same franchise fees cable pays" if the government streamlines the franchise process.

At a hearing on video franchising, Seidenberg promised that his company would "carry public, educational and government (PEG) channels" and said it "supports preserving local governments’ authority over rights-of-way and expects to be subject to federal redlining rules that apply to cable" for its FiOS video service.

The committee is rewriting the 1996 Communications Act to reflect the advent of broadband. A number of bills have been introduced to create a state or national video franchise process to speed telco and other competition to cable.

Whitacre argued that without state or national franchising, AT&T will have to strike 1,600 local franchising deals to roll out its video service. "If we completed one deal a week," he said, "that would take 30 years."

Cablevision COO Tom Rutledge countered that the issue wasn't that telcos couldn't get the franchises but instead that they hadn't tried:
"In the last three years we, a company with 409 franchises, have renewed and renegotiated about 100 franchises. In the same time, if you are building one of these networks, you actually have to plan ahead.You have to plan where you are going to put your facilities, your wires, you have to get permits, open the streets, cross interstate highways, cross inter-coastal waterways, you’ve got a lot of planning before you can build one of these networks.
"Verizon has been building these networks and planning them for over three years, and yet didn’t ask for the franchises.
"Now they have 3 million passings built and didn’t get, or hardly got, any franchises in that period of time. In the same period of time we, a much smaller company, were able to get 100 of them. So I think the problem is that you have people who are not participating in the franchise process."
The committee appeared to be unanimous in its commitment to do something to ease entry so that neither new entrants nor incumbents are competitively disadvantaged, but also to protect the interests of municipalities and consumers, which Senator John Kerry (D- Mass.) called a vital but difficult balancing act.