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House Passes Telco Bill Out of Committee

Mar 29, 2006  •  Post A Comment

The House telecommunications subcommittee voted 27-4 late Wednesday to approve legislation what would make it easier for phone companies to launch pay TV services.

Under the measure, sponsored by Rep. Joe Barton, R-Texas, the phone companies would be allowed to roll out video operations through a national franchising process that would allow them to bypass the local franchising process that incumbent cable TV operators had to go through to launch existing cable systems.

The measure also would allow cable TV operators to switch from local to national franchises after a phone company launches video services on their turf.

An amendment approved by the subcommittee also makes clear that an incumbent cable TV operator’s right to switch from a local to a national franchise hinges on whether a phone company or other new entrant is providing competitive service in its market.

Another key approved amendment would clear the way for the Federal Communications Commission or a franchising authority to audit the books of national video franchise providers once a year to ensure they aren’t cheating on a requirement to pay local authorities up to 6 percent of their revenues.

Another amendment would give the FCC the right to issue fines of up to $500,000 to telephone or cable companies that use their power over their broadband networks to discriminate against rival content providers. The amendment would also require the agency to resolve discrimination complaints within 90 days.

The measure now heads for the full House Energy and Commerce Committee, which is expected to vote on it within the next several weeks.

In a bit of a surprise, Rep. Barton said Wednesday he will consider amending the bill to include a provision regulating indecency on cable. Under current law, only broadcasters — not cable and satellite TV operators — are subject to the Federal Communications Commission’s indecency prohibitions.

“I’ve said publicly that we need to have universal [indecency] standards,” Rep. Barton said during the subcommittee vote.

The issue of whether to use the measure to regulate cable TV indecency arose after the subcommittee quickly approved an amendment by Rep. Bart Stupak, D-Mich., that would require telephone and cable TV companies that offer video services under a national franchise to “prevent the distribution of child pornography” over their networks. “We need to investigate [whether to also extend anti-indecency provisions to cable in the video franchising bill],” Rep. Barton said. “That’s a valid policy question.”

The beefed-up enforcement provisions were not sufficient to win the support of all subcommittee Democrats. Voting against the measure were ranking Democratic Reps. John Dingell, D-Mich., and Ed Markey, D-Mass., as well as Mike Doyle, D-Pa., and Anna Eshoo, D-Calif.

But in a hallway interview, Kyle McSlarrow president and CEO of the National Cable & Telecommunications Association, said the cable TV industry was “getting to a much better place with this bill.”

Added Tim McKone, AT&T executive VP for federal relations: “If I were cable, I would be pleased with this legislation.”