The Federal Communications Commission (FCC) has voted to streamline the franchising process for giant broadband providers looking to offer television services over IP, in competition with cable TV.
The FCC, in a 3-2 vote, voted to prohibit local governments from “unreasonably” refusing to grant television franchises to new providers such as AT&T and Verizon Communications. The FCC vote sets time limits between 90 days and six month on franchise negotiations between local governments and broadband providers. It also prohibits unreasonable network build-out requirements, and sets a limit on fees local governments can charge.
Broadband providers have complained that some local governments have refused to grant them franchises without significant concessions.
While Verizon and AT&T praised the decision, the FCC’s two Democratic members voted against the proposal. Democratic Commissioner Jonathan Adelstein called the goals “laudable,” but questioned whether the FCC had the authority to limit local government power.
“Today’s item goes out on a limb in asserting federal authority to preempt local governments, and then saws the limb off with a highly dubious legal and policy scheme that substitutes our judgment as to what is reasonable for that of local officials,” Adelstein said.
The FCC’s action may stall any attempts at telecom reform in Congress. Video franchise reform was a large part of two bills that Congress considered this year but failed to pass.
“This order is certain to offend many in Congress, who worked long and hard on this important issue, only to have a commission decision rushed through with little consultation,” Adelstein said.
But FCC Chairman Kevin Martin, a Republican, noted that cable TV rates rose 93% between 1995 and 2005.
“Telephone companies are investing billions of dollars to upgrade their networks to provide video,” Martin said. “As new providers began actively seeking entry into video markets, we began to hear that some local authorities were making the process of getting franchises unreasonably difficult. Such unreasonable requirements are especially troubling because competition is desperately needed in the video market.”
The FCC gave itself six months to work out the details of its franchise proposal. It will examine whether current cable franchises should get the same breaks as new competitors, with commissioners suggesting cable providers should get the same treatment when their franchise agreements expire.
Both AT&T and Verizon praised the FCC’s decision. “Today’s action will fast-forward the delivery of new choices, lower prices and better services to consumers,” Susanne Guyer, Verizon senior vice president for federal regulatory affairs, said in a statement. “The FCC is standing up for consumers who are tired of skyrocketing cable bills and want greater choice in service providers and programming.”
