Senate Commerce Committee chairman Ted Stevens (R-Alaska) Monday introduced a sweeping 135-page bill designed to overhaul the nation’s telecommunications laws in a blueprint for change in the digital age that covers cable franchising, rural phone subsidies, Internet network neutrality, sports programming and Internet piracy of digital-TV programming.
The bill was introduced by Stevens with only lukewarm support from his panel’s ranking member, Sen. Daniel Inouye (D-Hawaii), who called for major changes before he could fully embrace the effort.
AT&T Inc. -- which, along with Verizon Communications Inc., has been urging Congress to eliminate local franchising -- praised the Stevens bill but did not endorse it, probably because the measure did not allow new cable entrants to bypass the local approval process and avoid explicit buildout requirements.
“We applaud the lawmakers for their leadership in reforming an outdated system that prevents consumers from realizing the benefits of competition for video services. We look forward to working with the Senate Commerce Committee and the entire Senate in the coming months as we move forward,” AT&T executive vice president of federal relations Tim McKone said in a prepared statement.
Nevertheless, the bill would allow AT&T and Verizon to enter a cable market after 30 days. Many features of current cable-franchising law -- including an obligation to serve an entire franchise area without regard to income -- would be preserved.
Spokesmen for the National Cable & Telecommunications Association and the American Cable Association declined to comment, saying that the groups were studying the bulky measure.
In a little-noticed provision, the Stevens bill would eliminate cable-rate regulation. Currently, local governments cap the basic-cable rates of cable operators that do not face effective competition, which generally means that EchoStar Communications Corp. and DirecTV Inc. have less than 15% penetration or a phone company has not entered the market to offer pay TV.
On the contentious subject of network neutrality, the Stevens bill would require the Federal Communications Commission to study the issue in annual reports over the next five years.
In a prepared statement, Inouye argued for more robust Internet regulation.
"We cannot ignore concerns about the potential for discrimination by network operators, but the draft appears to do just that by failing to create enforceable protections that will ensure network neutrality," he said. “The legislation must promote the availability of affordable broadband services and extend consumer protections on a competitively neutral basis.”
He said he agreed to be a cosponsor in the “spirit of bipartisanship” needed to pass a bill.
“My co-sponsorship … is not a demonstration of support for the bill itself,” Inouye added. “This is the draft of the majority staff, and I have numerous, substantive objections to the bill in its current form. Given that my colleagues and I have not yet had an opportunity to weigh in on this critical legislation, I consider its introduction the very beginning of the legislative process.”
According to a summary released by the Senate Commerce Committee, the Stevens bill would:
• Require local governments to act on cable-franchise applications within 30 days, using a national-franchise application crafted by the FCC;
• Require the FCC to issue a network-neutrality report annually for five years on how information is transmitted over the Internet;
• Require cable operators, for the first time, to contribute cable-modem revenue to fund rural telecommunications subsidies;
• Provide rural telecommunications-service providers, for the first time, with subsidies to provide high-speed-Internet access if they roll out the service within five years;
• Provide cable voice-over-Internet-protocol service with the same interconnection rights with Baby Bell phone networks that competitive telecommunications carriers currently enjoy;
• Require cable competitors, including direct-broadcast satellite, to receive access to cable-affiliated channels that carry sporting events, but allow cable to maintain exclusivity for nonsports programming currently exempt under federal program-access laws;
• Authorize the FCC to establish a broadcast flag to allow TV stations to protect digital content from Internet piracy;
• Allow local governments to offer high-speed-Internet service and encourage them to do so through ventures with private companies;
• Require the FCC to allow unlicensed devices to operate in portions of the television-broadcast spectrum not being used by TV stations but in a manner that protects TV stations from harmful interference;
• Allow large-capacity cable operators to transmit from the headend analog copies of digital-TV signals that have elected mandatory cable carriage, provided cable operators also provide subscribers with the digital signals;
• Permit small operators -- those with 500 megahertz of capacity or less -- to provide must-carry digital-TV signals in analog format until Feb. 17, 2009, with digital carriage optional; and
• Require TV-set makers to place labels on analog-TV sets that won’t receive digital-TV signals with over-the-air antennas after Feb. 17, 2009.