FCC adopts relief for telecom companies planning TV offerings

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"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, adding that he predicted the rules would quickly be challenged in court.

Similar misgivings about the FCC's authority have been voiced by congressional Democrats in recent days. Rep. John Dingell, a veteran Michigan Democrat slated to take over as chairman of the influential House Energy and Commerce Committee next year, lobbed a number of questions at Martin aimed at gleaning what legal authority underlies the FCC's proposed actions.

"It would be extremely inappropriate for the Federal Communications Commission to take action that would exceed the agency's authority and usurp congressional prerogative to reform the cable television local franchising process," Dingell wrote in a letter dated December 19 (PDF).

Some have argued that relaxing regulations for telephone companies does not guarantee lower prices for subscribers. In the broadband market, when cable and DSL services are offered in the same area, "the other guy just gradually raises his price...rather than having the higher price come down to the competitor's level," said Harold Feld, a senior vice president with the advocacy group Media Access Project.

Consumer advocates wary of changes
Consumer groups have also been wary of changes to the franchise system because they believe it will allow telephone companies to escape certain responsibilities imposed on them by some municipalities. One major sticking point has been "build-out" requirements. Consumer groups argue that eliminating or limiting such requirements could prevent residents of low-income and low-density areas from receiving service.

Mark Cooper, research director for the Consumer Federation of America, blasted the FCC's ruling, saying it affects more than just TV service. By curbing the fees that municipalities are allowed to charge phone companies for access, the FCC could be hamstringing an important source of funding for core municipal services like police, fire, trash collection and libraries, he said.

"They really did put their finger on the scales on the side of the Bells against the local government," Cooper said. He later added: "The opportunity to sell these services is really a privilege to (the companies), so these social obligations are perfectly reasonable things to ask for."

The FCC is also seeking comment on whether it should extend the new franchise rules to existing video service providers, such as the major cable companies.

"It is critical that as we advance pro-competitive policies, we ensure that our policies do not unreasonably create asymmetry in the marketplace," said Republican Commissioner Deborah Taylor Tate.

Even if the commission decides to apply the same policies to incumbent cable providers, the FCC would only apply the new rules to existing TV providers when their franchises expire. Kyle McSlarrow, president and CEO of the National Cable and Telecommunications Association, said during a conference call with reporters that this would be unfair to cable operators, especially those that have several more years left on their franchise agreements. He emphasized that the new rules would ultimately hurt the incumbent providers while giving the phone companies an unfair advantage.

"Whatever deregulation measures are adopted should apply to all providers," he said. "These new entrants aren't start-ups who are under-capitalized. They are large phone companies, one of which is larger than the entire cable industry. We think it is absurd to have different rules for us and the phone companies."

CNET News.com's Marguerite Reardon contributed to this report.

[tanis143]

Typical

Oh boo hoo. So the phone companies want in on video but do not want to go through the same legal constraints that the cable companies had to do. Thats so typical of them. When cable companies wanted to offer phone service did they get a break on the regulations they had to follow? Nope. But, since the phone companies generally have bigger pockets, I guess they can afford to grease the wheels that supposedly are balanced for all.

[ralfthedog]

Even playing field

If a law is passed, it should say that two companies offering identical services should be given the same terms. If Cox communication offers phone, internet and TV, and they are required to do X and pay Y, then ATT or Verision should be required to do X and pay Y to enter the same market with the same services.

The only problem I see is that they will find small differences in there service. "We require our customers to buy X peace of hardware while the other guy rents it out, we should not be held to the same standard..."

Allowances must be made for build out time. Lets say ATT is required to offer service in some low income neighborhood , They should be given about the same time it took the cable company to build to that place.

[bdennis410]

FCC doesn't go far enough

THe FCC must use this "baby step" to further open cable to competitive access for service, content and program producers and providers. And telecom must not be ignored in respect to forcing competitive access either.
Although Commissioner Martin rightly noted the over 100 percent increase in cable rates in just a short period , the fact is that since "dereg" cable rates are up in many areas over 300%, over eight times the rate of inflation. Cable excuses regarding "must carry" must also be dealt with.
And let's not forget that cable makes tons of money -read Billions- that's Billions with a bib "B" folks- from advertising. Why don't rates reflect the advertising profits? Cable should be FREE in view of the fact that cable's original premise- their "raison d'etre" -was that by investing in cable infrastructure to provide signals to homes, that rates would cover the cost of the infrastructure and signal delivery; nothing was said that should have been about offsetting rates with profits from additional services like Internet, or advertising, or others soon to come.
Cable has been profiteering from consumers for over 20 years, to the tune of over $200 Billion or more dollars-that's Billions with a big "B" folks!-in monopoly profits.
Who said crime doesn't pay!

Barry Dennis