Policy

Stevens Looking to Help Bells

6/06/2005 10:32 AM Eastern

Washington -- With SBC Communications Inc. recently losing a political struggle with the cable industry in the Texas legislature, Senate Commerce Committee chairman Ted Stevens (R-Alaska) said Monday that he wants to make it easier for the Baby Bells to enter local video markets than possible under current law.

Cable and phone companies need local government approval to wire homes and offices, but Stevens said that kind of micromanagement would stifle competition and hurt consumers as SBC and other Bells gear up to spend billions of dollars on the deployment of advanced, fiber-rich networks.

“There’s almost a universal concern about the costs and merits of state regulation or local regulation,” Stevens said.

“This is really a problem in terms of 30,000 local franchises that would be necessary for each Bell to enter the video marketplace,” he added. “That could be very costly and, to me, ultimately kill competition, but also, it’s going to increase the price considerably to the consumer.”

Although he didn’t spell out his time frame, Stevens is hoping to place curbs on local power in a bill overhauling the nation’s telecommunications laws.

“I think national standards would be preferable, if they will work. If they won’t work, then I think we have to find some way to just prohibit interference with the operation of this law by state or local entities,” Stevens said after a speech to the Federal Communications Bar Association here.

A lawyer for a group that represents hundreds of cities said she hoped Stevens would show “appropriate respect for federalism.”

Two weeks ago, the cable industry helped to sink SBC’s effort to convince Texas lawmakers to grant the company a statewide video franchise and obviate the need to gain entry from each local town and city.

Siding with the Bells, Stevens said, “I’m one who basically believes in states’ rights, but this is getting to the point now where we will have to find a way to deal with these issues that I think confront the industry.”

The cable industry’s position is that the Bells should get local approval because that is what’s required by current law. SBC and Verizon Communications claim that they already have facilities occupying local rights of way and that local permission to provide video would be redundant and frustrate their ability to provide a second high-speed connection to millions of homes over the next few years.

Stevens stressed the need for letting the phone companies deploy their facilities without excessive regulation.

“I believe we have to get into the relationship of local and state governments to the law we want to propose here in Congress, and the question is: How do you do that?” he said. “I think we can come up with some national standards, which they’d have to meet, or we could find some way to limit their involvement.”

Paul Gallant, a media analyst with Stanford Washington Research Group, gave Stevens’ remarks only a “mild positive” for SBC and Verizon, mainly because passing a sweeping telecommunications bill is controversial and difficult.

Stevens also addressed the “redlining” issue, or the ability of phone companies to target affluent customers while ignoring low-income consumers -- a cherry-picking strategy that cable has said the Bells should be stopped from executing. Last month, Comcast Corp. chairman Brian Roberts called the strategy “fiber to the rich.”

“I do not want prohibit anybody or require anybody to take action ... We want to set down guidelines that can be enforced by the industry itself and the leave the FCC [Federal Communications Commission] to its job of being the interpreter of that law and give it enforcement powers,” Stevens said.

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