FCC Puts Local Govt. Under Microscope

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The Federal Communications Commission Thursday launched a rulemaking that could furnish a solution if local governments make it too difficult for phone companies to compete against cable incumbents.

The FCC acted in response to complaints from SBC Communications Inc. and Verizon Communications Inc. that local governments make excessive demands when negotiating franchises that are required by federal law.

“We are hearing from some providers that local authorities may be making the process of getting franchises unreasonably difficult. New video entrants, regardless of the technology they employ, should be encouraged, not impeded from entry,” FCC chairman Kevin Martin said in a statement.

The commission promised a balanced look at the issue, although it said it expects to draft a list of banned practices by local governments, whether applied to incumbents or new entrants.

"We are pleased that the FCC's examination of local cable franchising will include existing operators, as well as new entrants, which is consistent with our philosophy that communications regulation should treat like services alike. We welcome the opportunity that this notice provides to comment on issues regarding the franchising process that are important to cable operators,” National Cable & Telecommunications Association president Kyle McSlarrow said in a prepared statement.

In the space of a few months, the agency could overhaul the rules in a way that expedites cable entry by Verizon and SBC, deep-pocketed regional Bell operating companies that have accused cable companies of exploiting the franchising process to injure would-be rivals.

“The commission's action is timely,” Verizon senior vice president for federal regulatory affairs Susanne Guyer said. “Where agreements are reached, they are often opposed by the incumbent cable company at public hearings, through state public-utility-commission proceedings and by suits against elected officials. These impediments result in unreasonable burdens that undermine the interests of consumers in the prompt introduction of video competition nationwide.”

The National League of Cities issued a statement urging caution on the FCC’s part, claiming that the agency's jurisdiction to pre-empt local governments was far from explicit in federal law.

“Because Congress has granted the FCC only minimal authority to influence local franchises, we view with concern any future FCC action to limit local involvement beyond its statutory authority,” said Arvada, Colo., Mayor Ken Fellman, chairman of the NLC's Information Technology and Communications Committee, in a prepared statement.

Sen. John Ensign (R-Nev.) has introduced legislation that would eliminate local cable franchising. Last week, he said he didn’t expect it to pass this year.

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