Virginia Seeks Speedy Video Entry

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Virginia is closer to enacting a new law that eases cable competitors’ path to launching video service, as the General Assembly approved two versions of a bill that would compel cities to act on franchise requests within 75 days.

Verizon Communications Inc. and incumbent cable operators both floated bills to reform the cable-franchising process. The separate bills, approved by the Senate and House of Delegates on Feb. 8, take elements from both proposals.

“We’re not entirely happy, Verizon’s not entirely happy, local governments are not entirely happy. I guess that’s the mark of a successful bill,” said Ray LaMura, president of the Virginia Cable Telecommunications Association.

“This legislation will accelerate to a matter of weeks the period from upgrading the network to offering competitive cable products,” Robert Woltz Jr., president of Verizon Virginia, said in a statement.

Verizon did not seek statewide franchises in Virginia, a strategy it is pursuing aggressively in at least five other states. The state constitution guarantees local governments authority over franchise contracts. Instead, the telephone company moved to speed up the negotiation process in each city and county.

Verizon has been aggressively deploying fiber in Virginia, analysts said. The state represents 8% of Verizon’s total access lines and 7% of its residential business.

The bills guarantee 15-year video franchises and limit negotiation periods to 45 days. After that, the city or county has 30 days to enact an ordinance approving the local franchise.

Local regulatory rights are affirmed: Cities can demand periodic reports from the providers to ensure they aren’t avoiding less-affluent areas, for example.

Cable incumbents pushed for universal-service requirements. The bills don’t mandate that telcos serve every community in the state, but allow communities to require that franchised telephone companies provide video service to 65% of homes in their phone service area within seven years of service launch. Cities then can hold a public hearing to determine whether the new competitor needs to expand availability to 80% of the local service territory by the end of the 10th year of service.

New providers can be required to reserve up to seven public, educational and government channels. Local communities can require payments of 1% of gross revenue to underwrite the costs of public-access, education and government (PEG) channels. Regulators can also enforce local customer-service standards and audit providers’ books.

The Senate version passed on a 37-1 vote, while the House of Delegates approved its version 85-12. Lawmakers must now reconcile the bills before seeking Gov. Tim Kain’s signature.

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