Policy

McDowell: Ease Telcos’ Way

8/11/2006 8:00 PM Eastern

Washington— Federal Communications Commission member Robert McDowell supports agency involvement to ensure that phone companies can enter local cable-TV markets without having to overcome a lot of red tape.

“I do think we can do a lot to help speed the deployment of video penetration and marry it up with that broadband penetration by clearing some of that regulatory underbrush,” McDowell said last Tuesday in his first meeting with reporters, which touched on a number of cable-related issues.

AT&T Inc. and Verizon Communications Inc. are pressing the FCC to crack down on local governments that won’t approve cable franchises swiftly or that force them to deploy facilities in areas that they do not want to serve immediately.

FCC chairman Kevin Martin, who has endorsed setting a deadline for action on a cable-franchise application, has mentioned a six-month timeframe. AT&T and Verizon have expressed interest in the FCC setting a 30-day deadline.

The National Cable & Telecommunications Association, disputing that local governments have been slow to act, has repeatedly told the FCC that the courts were the proper forum for settling franchise disputes.

WAIT AND SEE

McDowell suggested disagreement with the NCTA by asserting that the FCC “does have that authority” to curb extended local governmental review of franchise applications. But McDowell cautioned that the FCC should wait a few months to see whether Congress addressed the issue. FCC involvement should preserve a meaningful role for local officials, he added.

“I want to make sure we don’t go too far,” he said. “If there’s a cable coax line down in your backyard and you live in Wyoming, should you be calling Washington or writing Washington to get that fixed, versus your local municipality? So there are some practical, pragmatic issues to address as well.”

McDowell, appointed by President Bush in February and confirmed unanimously by the Senate in late May, joined the FCC June 1 to give the GOP a 3 to 2 advantage at the agency for the first time since March 2005. He said his regulatory philosophy was market-oriented, though he supports government intervention to correct market failures.

On other cable-related topics, McDowell said multicast must-carry requirements went beyond FCC authority. Many local TV stations have been demanding that the agency force cable systems to carry every digital programming service they provide over the air for free, which at present can mean six or more services per station.

“I do not believe the statute gives the commission authority to impose the multicast must-carry requirement,” McDowell said. “So should Congress give [an] explicit mandate in that regard, I would follow that mandate.”

McDowell was skeptical about regulating broadband access providers before seeing evidence that cable and phone companies had made anti-competitive moves against such Web-content providers as Google Inc., Yahoo! Inc. and eBay Inc.

“Let’s wait and see. Let’s continue to be vigilant,” McDowell said, adding that he was unsure that the FCC today could pinpoint the right remedy. “It’s sort of like the French goalie in the World Cup shootout [who] was diving to the left and all of the balls were going to the right. Does government want to be the French goalie in that case?”

Were a broadband access provider to block consumer access to a hugely popular search engine like Google, McDowell predicted “pitchforks and torches in the streets and that government policy would change overnight.”

PROGRAMMING OPTIONS

Martin has pressed cable operators to provide consumers with more options in the selection of programming, including the ability to purchase networks on an a la carte basis.

McDowell indicated government mandates in this area might be unnecessary.

“It may be that consumer demand forces a private sector resolution to that question,” he said.

McDowell, whose term expires on June 30, 2009, said one of the biggest issues he will face is reform of the $6.5 billion universal service fund, which, among other things, provides subsidies to keep phone service affordable in rural parts of the country. In his view, the FCC has to seek funding from new revenue sources, but he did not say whether he wanted to tax cable modem revenue.

October
November