Senate Commerce Passes Franchise Bill

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The Senate Commerce Committee Wednesday approved a large communications/video franchising reform bill after a long and heated debate on the issue of network neutrality.

The bill passed by a vote of 15-7, but there was an 11-11 tie on the network neutrality portion of the bill, so that amendment was defeated. (A tie is a defeat.) One Republican, Sen. Olympia Snow (R-Maine), a co-sponsor of the bill, crossed over to vote with the Democrats.

Senate Commerce Committee Chairman Ted Stevens said that, if network neutrality had passed, the overall bill would not have made it all the way through Congress, because the issue is so divisive.

Sen. John Kerry (D-Mass.), on the other side, countered that the bill may not have the 60 votes it needs to pass the Senate (to overcome a filibuster) because it doesn't mandate network neutrality.

Wednesday additions to the bill that were approved included an amendment making room for as many as 2,000 new low power FM stations, but with a carve-out for New Jersey that could possibly apply elsewhere.

The committee also approved requiring the FCC to put out a notice of proposed rulemaking on any new ownership rules it comes up with in its just-launched reg review, as well as one essentially declaring the FCC's  remanded deregulatory rules null and void and officially declaring the old rules restored.

The court had already found the 2003 deregulatory rule rewrite wanting and the FCC was operating under the old rules, but this puts Congress' imprimatur on that current state of affairs.

Another addition was the creation of an FCC office of consumer affairs to help it deal with the new oversight responsibilities per the streamlined video franchising process the bill establishes. The FCC will be one busy agency. It is also charged with collecting "more helpful" statistics on the broadband rollout the bill is meant to spur.

Then there was the requirement that the FCC study  an ad-supported school bus radio service--the legislators did not like the idea, particluarly since it came from a company that had attempted to put ads on school book covers.

In addition to the net-neutrality amendment, also going down to defeat was an amendment that would have essentially mandated cable a la carte, one that would have imposed a phased-in build-out requirement on new video franchises, and one that Stevens called a back-door build-out requirement that would not have lifted basic tier rate regs on cable until a new entrant had built out a third of the market.

In the bill as passed, as the amendment's sponsor, Barbara Boxer (D-Calif.), pointed out, basic rate regs could be lifted once a single household was served by both the incumbent and the new entrant.

NCTA President Kyle McSlarrow praised the decision to pass on a la carte: "We are very pleased with the defeat of the amendment and will continue to oppose unnecessary government regulation of the pricing and packaging of video services," he said,  which most studies show will diminish diversity in programming and result in higher prices for fewer channels."
The bill now moves to the floor, where the net-neutrality debate will almost certainly be renewed and more amendments offered.

The bill streamlines the video-franchising process, similar to a bill already passed in the House but with more local oversight than the House's more national version.

Both bills create a de facto national franchise that will help telephone companies more easily roll out video and broadband service and that cable operators can opt for once a competitor enters the market.

By not including specific prohibitions on discrimination in Internet access, the bill, said net neutrality proponents, allows big media to control one more pipe, likening it to broadcast consolidation. Opponents say mandated net neutrality would discourage capital investment and unduly restrict network business plans, both of which could delay the broadband rollout Congress is trying to spur.

One side note. Stevens said after the hearing that the bill indirectly addresses multicast must-carry.  He is apparently referring to a section on cable cable conversion of a broadcasters DTV signal. That language talks about carriage of a "video signal" not a "primary" video signal. That slight change could be the difference between the FCC's current definition of multicast must-carry as cable carriage of a single digital replication of the primary signal to carriage of all the DTV channels that fit into a DTV spectrum allotment.
But even if that is Steven's way of signaling Congressional intent, it is not supported by the House Republican's who drafted their version of video franchise reform, and thus is unlikely to survive if it is meant to grant multicast must-carry.

House Energy & Commerce Committee Chairman Joe Barton and Telecommunications Subcommittee Co-Chairman Fred Upton have even written FCC Chairman Kevin Martin to ask him not to approve multicast, must-carry, saying the FCC got it right in two earlier decisions that must-carry means only one DTV channel.

Even if the Senate version passes on the floor, no sure bet at the moment, the two very different bills must be reconciled in conference. For a bill to pass, both the House and Senate have to agree on the same language and provisions.
While the House bill was pared back to essentially only video franchise issues by Barton and Upton in an effort to get a bill that would pass this session, the Senate bill contains a range of issues including money for emergency communications, unlicensed wireless devices in the broadcast band, labels for analog TV sets, digital TV and radio content protection, media ownership, indecency and more.

Stevens has worked hard to accommodate various groups in an attempt to keep the bill both large and passable. It includes elements he reluctantly had to strip from a Senate DTV transition bill.

Both Barton and Stevens have pledged to pass a bill this session, so the House bill must be expanded, the Senate bill contracted, or a middle ground found. That ground was not apparent in the mostly party line votes on various amendments leading up to the final vote.

The lobbies lined up for and against the bill were quick to use the Internet to weigh in on the decision:

US Telecom: Today, the Senate Commerce Committee under the strong leadership of Chairman Stevens took a bold step toward real video choice for consumers and ensuring the future for universal service. The bill reported from committee will update our communications laws to reflect today's highly competitive marketplace and unleash a new wave of innovation and economic growth. The Committee should also be commended for its sound judgment in rejecting calls for the government to regulate the Internet.”

It's Our Net Coalition (Echoing language of Senator John Kerry (D-Mass.) in the Debate: "We strongly urge members of the Senate to not take up the overall telecom bill, unless and until strong Net Neutrality provisions are included. We are confident that Congress will ultimately do the right thing for consumers, competition and the future of the Internet by ensuring that Net Neutrality prevails, and that the Internet remains the remarkable open marketplace for ideas and innovation that it is today."

Verizon: “Congress is close to producing a tangible victory for consumers–lower cable TV bills and greater video choice.  The full Senate should vote soon because every year reform is delayed costs consumers $8.2 billion in higher cable bills. This bipartisan committee vote – and the huge House victory – prove
video choice is within consumers’ grasp this year."

Netcompetition.org: “Those net neutrality proponents whose true agenda is to protect free speech on the Internet, and not price-regulate the Internet, should support Senator Stevens’ strong Internet First Amendment language on the Senate floor. Blocking final passage of the Stevens Bill would only ensure that net neutrality proponents achieve nothing in their quest for additional Internet safeguards,” Cleland added.

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