FCC Schedules Franchising Vote

12/15/2006 7:00 PM Eastern

Washington— Federal Communications Commission chairman Kevin Martin has scheduled a vote for Wednesday (Dec. 20) on his plan to pressure local governments to sign cable-service contracts with requesting phone companies within 90 days, according to a meeting agenda released by the agency last week.

Martin's plan puts him in direct conflict with cable operators and local governments, which argue that the FCC lacks authority to impose a shot clock on cable-franchising negotiations. The plan includes details related to the calculation of franchise fees that have also invited criticism from cable and the cities.

Martin has the agency positioned to vote at its last public meeting of the year. It would appear that he has a majority at the five-member agency, because the FCC's pattern is to approve items docketed for a public vote. Republicans hold a 3-to-2 advantage over Democrats.

A New Local Approach
Key points of the FCC chairman's proposal:
SOURCE: Multichannel News research
Cities have 90 days to act on cable franchise requests from phone companies and others with pre-existing access to rights of ways, and within 6 months in other cases.
In-kind contributions and cash payments should count toward the 5% cap on franchise payments.
Cities may not use their authority to regulate cable to regulate voice and data services when bundled with video programming.

But sometimes majorities fail to materialize. In June, Martin called for a public vote on his plan to force cable to carry multiple digital signals of local TV stations, but he had to pull the item when Republican FCC member Robert McDowell refused to cast the deciding vote.

“Unlike what people think, until people actually enter their votes, I'm never certain that we have everything all set on an issue,” Martin told reporters last Thursday.

If the FCC adopts the franchising rules, cable operators and cities have indicated a willingness to fight Martin in federal court.

The National Cable & Telecommunications Association, in a Dec. 12 letter to the FCC, said “there is every reason to believe that appellate review would be sought” if the agency has failed to give cable sufficient opportunity to comment on the rules ultimately adopted, especially if those rules tilt in favor of phone companies.

“If [the FCC] wants to take up the issue of special advantages for new entrants, then the [FCC] must issue a further notice of proposed rulemaking to expand and clarify its proposal before issuing a final order,” Daniel Brenner, NCTA's senior vice president of law and regulatory, said in a six-page letter.

Martin's support for streamlining cable franchising rests mainly on his belief that phone companies that offer video will drive down cable rates and promote broadband deployment.

Comcast pointed out that the FCC's interest in speeding phone-company entry into local video markets seemed to clash with the plodding pace at which the agency reviews some pending cable requests for action.

In a Dec. 11 letter, Comcast told the FCC that the agency has sat on at least five Comcast “petitions for effective competition” for more than two years and that the agency failed to act on Comcast's major set-top box waiver request within the 90-day window mandated by federal law.

“Sometimes the [FCC] itself has taken longer to process straightforward applications and other petitions, even where deadline exists,” Comcast's three-page letter said.

Comcast's physician-heal-thyself tone was a rare slap at the powerful regulatory body, and it could be a sign that the largest U.S cable operator will no longer disguise its frustration with Martin and his attempts to placate AT&T and Verizon on video policy.

At the same meeting, the FCC is expected to unveil the results of its annual cable-price survey. The survey typically shows that cable rates have outpaced inflation by a few percentage points — a finding cable critics use as ammunition to aver that consumers were gouged.

The FCC survey also typically finds that on a per-channel basis, inflation-adjusted cable rates have either remained flat or actually declined. Martin has said that per-channel comparisons were irrelevant because consumers can't buy cable programming on a per-channel basis.

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