Sucommittee Votes Down Build-Out Guarantee

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With a vote of 22 to 11, the House Telecommunications Subcommittee voted down an amendment that would have required national video franchise holders, both new entrants and eligible incumbent cable operators, to build out their franchise areas more on a government timetable.

The amendment was offered to a national video franchising bill being marked up in the committee Wednesday.

House Commerce Committee Chairman Joe Barton (R-Tex.) called the amendment worthy of debate and said that debate "goes to the heart of the bill." He will likely hear more debate when the full committee considers the bill after the spring break.

That "heart," he said, is that the marketplace works to encourage build-outs. "I believe that markets work," he said, and if the bill passes in its basic form, which means without that build-out amendment, it would "usher in a new broadband era."

Barton said that, with the addition of national franchises, there will be five multichannel video competitors in some markets (telcos, cable, cable overbuilders, satellite and local governments--which under the bill can launch their own service). With that competition, he said, "you don't need a build-out requirement. The market will take care of it."

Ranking Commerce Democrat John Dingell (D-Mich.), who offered the amendment, wasn't having any of it. Dingell said that, without the build-out requirement, franchisees would cherry-pick and cream skim, with "hideous" consequences for the less fortunate.

Ed Markey (D-Mass.), ranking subcommittee Democrat, agreed, characterizing Barton's marketplace forces as "Darwinian, paranoia-inducing competition." He maintained that, since Washington would be handing out the licenses, somebody needed to be looking out for the folks back home on the wrong side of the tracks.

One Democrat who didn't agree was Bobby Rush of Illinois, who co-sponsored the franchise bill and co-wrote language toughening penalties for disciminating in-service provision.

Rush, who became the "bipartisan" name on the bill after both Dingell and Markey failed to support it, suggested that his constitutents, many of them African-American, didn't need to be taken careof through build-out provisions but instead needed the lower prices for cable service that the bill would produce.

Rush took issue with what he said was the "sterotyping" of low-value customers as lower income and minority, saying his constituents were instead high-value. "My constituents spend more money, time and scarce resources on cable and wireless than any other demo."

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