House Proposes New Telecom Draft

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The cable industry is panning new House draft legislation designed to overhaul bedrock telecommunications law and to ease phone-company entry into cable markets.

In House testimony last Wednesday, Insight Communications Co. CEO Michael Willner said his industry is troubled because “the current draft creates different regulatory regimes for like services. Regulatory treatment would turn on whether a provider used packet-switched transmission or not.”

'BROADBAND' EXCEPTION

The House draft — released Nov. 4 as a revision to a September version — would allow providers of “broadband-video service” to enter local markets without local approval, eliminating the franchise requirement across the country.

Willner complained that because cable companies would still be burdened with franchising until they became so-called broadband video service providers, the House draft would be picking regulatory winners and losers.

“We are concerned about the bill's technology-specific focus,” he said. “How is that good for consumers? Like services should be treated alike and all providers of those services should play by the same rules.”

Willner, whose company serves 1.3 million subscribers, testified on behalf of the National Cable & Telecommunications Association, which represents operators serving the vast majority of U.S. cable subscribers.

He appeared before the House Subcommittee on Telecommunications and the Internet, a panel with oversight of the cable industry.

Willner also argued the draft would likely impose forced-access obligations on cable broadband. Those provisions, he added, would negate the industry's June Supreme Court victory in the Brand X case.

The draft would bar broadband Internet access providers from blocking consumer access to lawful content under a policy commonly called net neutrality.

Willner said net-neutrality rules would be premature because operators do not impede consumers' from freely roaming the Internet.

He said the “open-ended nature” of the nondiscrimination provisions would “definitely trap broadband providers into a morass of litigation for years to come.”

The draft is causing a rift between the panel's senior Republicans and Democrats. Democrats accused Republicans of not consulting them before releasing the new draft with all its changes.

Rep. Edward Markey (D-Mass.), referring to a range of substantive provisions of the new draft, called it a “significant step backward” from the earlier version.

Michigan Democrat John Dingell complained that the draft would shortchange local governments in several areas, a view endorsed by Marilyn Praisner, a Maryland county regulator who appeared on behalf of the National Association of Telecommunications Officers and Advisors.

“The telephone companies, to us, appear to get everything they ask for, including fast-track franchising, while avoiding most social obligations,” she said.

VOTES TO COME LATER

House Energy and Commerce Committee chairman Joe Barton (R-Texas) said the bill would not be marked up by the full committee this year, and that he hoped to achieve bipartisan support when the time to vote arrived.

The new draft, he added, was prepared because the first version was heavily criticized.

“It was uniformly knocked,” Barton said. “Nobody was for it that I am aware of. So we made some changes.”

SBC Communications Inc. senior executive vice president and general counsel James Ellis praised the new draft, saying its deregulatory emphasis would allow the company to spend $5 billion efficiently over the next three years to take on cable incumbents that have consistently raised rates over a decade.

“What's important in the future is less, not more, regulation,” he added.

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