Draft Bill Would Ease Franchising

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Just 15 days after filing a few papers and putting up a bond, phone companies can waltz into cable markets and offer video programming with minimal local interference, according to House draft legislation that began circulating Thursday afternoon.

In addition to light franchising requirements, the House legislation would also impose network-neutrality requirements on cable and other high-speed Internet-access providers out of concern that network owners might discriminate against Web-based merchants.

The 77-page draft is designed to overhaul the Telecommunications Act of 1996 and create a statutory scheme that reflects the advent of Internet-protocol voice and video services that enable consumers to tap oceans of information and the inventory of markets around the globe.

The draft appeared to reflect the preferences of House Energy and Commerce Committee chairman Joe Barton (R-Texas) and Telecommunications and the Internet Subcommittee chairman Fred Upton (R-Mich.). But based on numerous consumer safeguards that were included, it also appeared that key Democrat Reps. John Dingell (Mich.) and Edward Markey (Mass.) had a hand in the drafting.

Under the bill’s franchising rules, a provider of “broadband-video services” could begin offering service after 15 days if it has made franchise bond payments to local governments; has given the local government a promise to carry public, education and government channels; and has designated a local agent.

Although local governments could manage street construction, the bill would vest oversight of broadband-video providers with the FCC. Local governments may collect 5%-gross-revenue franchise fees. The FCC would enforce anti-red-lining rules.

Like cable companies, broadband-video providers would need to comply with must-carry, retransmission consent and program-access rules. Cable privacy and consumer-protection rules would also apply, according to the draft.

Under the bill, states could not bar their subdivisions from providing broadband-voice and video services, except that local governments that offer service can’t exempt themselves from requirements that apply to commercial entities.

The FCC would have to complete numerous rulemakings to implement the draft bill. However, the agency would have only 180 days to issue all regulations.

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