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NCTA President Slams Barton’s Telco Franchising Plan

Mar 9, 2006  •  Post A Comment

A cable industry leader on Thursday blasted a House member’s plan to propose legislation that would allow telephone companies to bypass local regulators as they roll out television services, calling it a “sweetheart deal” for phone providers.

Under the proposal supported by House Energy and Commerce Committee Chairman Joe Barton, R-Texas, cable companies would continue to be bound by existing franchise rules, which force them to negotiate with regulators in all the markets where they do business, said Kyle McSlarrow, president of the National Cable & Telecommunications Association. Once phone companies or other competitors gain 15 percent of the TV subscribers in a market, cable operators could also bypass local authorities and be governed by national franchise regulations, he said.

Winning passage of a bill with those provisions would help companies like Verizon Communications catch up in the subscriber-TV business, where companies including Comcast Corp. and Time Warner Cable currently dominate. The proposed legislation, which is said to have the backing of Rep. Barton, is expected to receive a committee vote as early as next week, Mr. McSlarrow said.

“I don’t even know how that passes the laugh test,” he said during a teleconference Thursday with reporters.

Another provision of the bill would require cable TV operators to offer customers the same prices throughout their territories, Mr. McSlarrow said. That would bar cable companies from raising prices in neighborhoods that aren’t subject to competition to make up for price cuts in neighborhoods in which phone companies are rolling out video.

Mike Balmoris, a spokesman for AT&T, which has been promoting legislation to institute national franchising, said, “We’re not commenting on something we haven’t seen.” Spokesmen for Rep. Barton and Verizon declined comment.

Mr. McSlarrow said lawmakers familiar with Barton’s plan told him that under a nationally regulated franchise plan, telephone companies’ fees would be capped at 6 percent of revenue. The cap on local franchise fees is currently 5 percent of a cable operator’s revenue.

Mr. McSlarrow also said the legislation as he understood it would include a provision barring cable TV operators and phone companies from using their power over broadband networks to discriminate against Internet content providers.