TIA Resurrects National Franchise Push In Senate

Telecom Policy Report, August 21, 2006

Amid state developments and spot telco/municipal fights over video franchises, the Telecommunications Industry Association (TIA) has resurrected the campaign for a streamlined, nationwide franchising system by pressing for federal legislation as the U.S. Congress approaches the end of its recess.

In a letter to Senate chiefs - Majority Leader Bill Frist (R-Tenn.) and Minority Leader Harry Reid (D-Nev.) - the industry group strongly urged passage of the Advanced Telecommunications and Opportunity Reform (ATOR) Act (newly titled H.R. 5252), the large sweeping communications proposal that includes provisos on national video franchising, universal service fund (USF) changes, broadcast spectrum reallocations, broadband/Voice Over Internet Protocol service regulation and 911/E991 mandates (Telecom Policy Report, Aug. 10)

"This bill must pass through the Senate now and be signed by the President in order for the U.S. to see renewed investment in broadband networks and long-overdue competition in the video marketplace, ensuring lower prices and better services for consumers," said the letter signed by TIA President Matt Flanigan advocating that Senate leaders bring the ATOR bill to a Senate floor a vote as soon as possible after Congress reconvenes.

Flanigan also said ATOR provisions would be beneficial to TIA members, consumers and the U.S. economy, and he claimed that consistent with the TIA's policy proposal on video-programming distribution, this bill includes the streamlined video-franchise system that will be managed by the Federal Communications Commission (FCC) but "with limited input" by existing local franchise authorities (LFAs).

"In addition, TIA's Broadband Internet Access Connectivity Principles reflect what we believe should guide policy decisions regarding net neutrality; this bill includes provisions that attempt to protect these important consumer interests," Flanigan added. "Our view is that the principles we offer provide an evenhanded and practical approach to this debate."

State And Local Developments

The move comes amid what some regard as continued chaos and inconsistency - and what telcos regard as a snail's pace - concerning the video-franchise issue on the state and local levels. Most recently (TelecomWeb news break, Aug. 18), a third California State Senate committee has approved a proposed statewide video franchise measure, positioning the bill to be sent to the full State Senate for a vote within two weeks or so (TelecomWeb news break, June 30).

Assembly Bill 2987 was given the green light last week by the California Senate Appropriations Committee in a 13-0 vote - following a 10-0 approval by the Senate Energy, Utilities and Communications Committee and a 9-0 approval by the Senate Policy Committee (both in late June) plus the full Assembly's 77-0 passage of the bill in late May.

The proposed legislation being pushed since last year by the likes of AT&T and Verizon Communications - comparable to lobbying efforts in several state legislatures as well as in the U.S. Congress - would establish a streamlined franchise certification process and make it easier for such new entrants as telcos with their Internet Protocol Television (IPTV) offerings to enter the market. The proposed bill also allows existing cable-TV business operators by allowing incumbent cableco franchisee to opt into state franchising system. As a result, the measure reportedly was considered more palatable to the California Cable & Telecom Association, which had said it would oppose the bill unless it was amended to address incumbents' concerns.

AB 2987 also would guarantee that local communities continue to receive franchise fees consistent with those paid by incumbent cablecos (originally one of the unsettled issues), and there had been consistent legislator debate over whether build-out provisions to prevent telco redlining were strong enough.

State franchise measures and new cable bills have been passed since last year in Indiana, Kansas, New Jersey, North Carolina, South Carolina, Texas and Virginia; other proposals are pending in Florida and Pennsylvania (Telecom Policy Report, Aug. 10). However, the New Jersey bill was accompanied by a number of executive orders by the governor on strong utility-regulator and official consumer-advocate-office oversight of telco entry, while Louisiana's governor earlier vetoed a statewide franchise bill.

Meanwhile, on the local scene, media reports reveal conflict between LFAs and the likes of AT&T or Verizon Communications, the most powerful lobbyists behind state or federal franchising systems, as they deploy their respective Project Lightspeed and FiOS fiber networks for data, Internet access voice and IPTV.

AT&T's Battle In Naperville

One recent flap over franchise proposals and build-out requirements involved an AT&T decision to scrap plans to deploy its Project Lightspeed in Naperville, Ill. (ironically also the hometown location of a well-known heritage AT&T/Western Electric digital central office and software R&D facility now run by Lucent Technologies).