Telco Bills Re-Emerge

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Telephone-company backed efforts to change cable franchise rules are revving up in several states, including a race in Virginia between a Verizon Communications Inc.-backed measure and one drafted and supported by cable operators.

Virginia is just one of the states where the issue has been resurrected. A telco-backed bill was presented last legislative session, but cable lobbyists were able to convince lawmakers that there was not enough debate time to vet such a complicated issue as telecommunications reform.

The issue will resurface this session in New Jersey, too, where a bill enabling statewide video franchising wasn’t acted on in the Legislature’s last, lame-duck session. Bills on the subject have been submitted for the new session beginning Jan. 23.

New bills also have been introduced in Indiana and Missouri. And Verizon is expected to seek operating authority in Delaware from utility regulators there to roll out video services across the state.

Unlike other state proposals, the Verizon-backed Virginia bill does not advocate statewide licensing. The state constitution guarantees the rights of local governments to franchise the rights of way, so state franchising was not an option for bill drafters.

Instead, both the Verizon and cable bills mandate that local authorities act upon franchise requests within 120 days.

That’s where the Virginia proposals diverge.

The cable-backed proposal, sponsored by House majority leader H. Morgan Griffin (R-Salem), would require new entrants to operate under rules no more or less burdensome than observed by incumbents.

Cable companies can go to court to determine if local rules meet the similarity test and any relaxation of rules for a new provider would apply to the incumbent as well.

Verizon already has negotiated three franchises in the state, with another expected by the end of the month. But the company complains that the pace of community by community negotiations slows the deployment of competitive video services.

Ray La Mura, president of the Virginia Cable Telecommunications Association, said his group’s bill represents a “fair solution” to Verizon’s dilemma. Ensure a level playing field, it urges the government, “then let us duke it out over customer service,” he said.

Harry Mitchell, Verizon’s spokesman, argues that cable operators sought, and were granted, relief from rules seen as barriers to new telephone providers in state. That contributed to Cox Communications Inc.’s current status as the third largest phone provider in Virginia. Similarly, barriers to video entry should be dropped for the telephone companies, he argued.

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