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Rep. Barton Releases National Video Franchising Legislation

Mar 27, 2006  •  Post A Comment

House Energy and Commerce Committee Chairman Rep. Joe Barton, R-Texas, publicly released draft legislation late Monday that would make it easier for telephone companies to get into the pay TV business.

Phone companies and cable TV operators alike could seek permission to launch video in communities through a national franchising process, according to the bill, which Rep. Barton said in a statement is being co-sponsored by Rep. Bobby Rush, D-Ill.

Cable TV companies would have to wait to switch from a local franchise to a national franchise until after a phone company applied to move onto their turf. Phone companies and cable operators that switch to a national franchise could be required to pay a fee of 6 percent of their revenues to local authorities — up from the 5 percent that cable operators can be required to pay under an existing local franchise.

In his statement, Rep. Barton said hearings have been slated for Thursday.

“This bill will produce an explosion of opportunity for American workers and American consumers will get an array of video services that were unimagined just a few years ago,” he said.

As widely anticipated, Rep. Barton has deleted provisions from the bill that would have prevented cable operators from escaping their local franchising commitments until a phone company secured 15 percent of the TV subscribers in a cable operator’s market. Also deleted was a controversial provision that would have barred cable operators from raising prices in neighborhoods where phone companies aren’t rolling out video to make up for price cuts in neighborhoods in which cable operators and phone companies compete.

Kyle McSlarrow, president and CEO of the National Cable & Telecommunications Association, said in a statement that the draft bill represents “considerable progress.”

“Earlier drafts of the House bill focused on picking winners and losers on the basis of technology, and we are pleased that focus has now changed,” Mr. McSlarrow said. “While our policy recommendation would be to reform and streamline the franchising process to ensure speedy entry by new competitors, we are pleased that the national franchising scheme proposed in the House bill seeks to ensure all providers compete on a level playing field.”

Tim McKone, AT&T executive VP for federal relations, said in a statement that the introduction of the bipartisan legislation showed that House Energy and Commerce Committee members are intent on doing their part to bring video services choice to consumers.

“The bill strikes the right note of accelerating video choice for consumers while upholding the legitimate and important roles of local governments, such as maintaining their rights of way, preserving community access programming and ensuring localities will not lose needed revenue,” Mr. McKone said.