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U.S. House Votes to Help Phone Companies Get Into TV Business

Jun 8, 2006  •  Post A Comment

The U.S. House of Representatives late Thursday voted 321-101 to approve legislation to make it easier for phone companies to get into the pay-TV business.

The measure, sponsored by Rep. Joe Barton, R-Texas, would allow the phone companies to seek national franchises to roll out video services without having to go through the same local franchising process that cable TV operators went through to install their systems.

The measure includes a provision that would allow cable companies to switch from local to national franchises after a phone company launches video services in their areas. The National Cable and Telecommunications Association said in a statement that the bill “ensures that all providers compete on a level playing field.”

The final version of the bill, which has the support of the administration of President George W. Bush and now heads to the Senate, excluded an amendment that would have ensured cable and phone providers don’t abuse their power over their Internet network to favor some Web-content providers over others.

The bill will help phone companies speed introduction of video services and increase competition in the television marketplace, the White House’s Office of Management and Budget said in a statement. If passed into law, it also will give more Americans access to high-speed Internet, the OMB said.

Kyle McSlarrow, president and CEO of the National Cable & Telecommunications Association, thanked lawmakers for rejecting the so-called network neutrality provision.

“By rejecting network neutrality regulation, the House has clearly stated a preference for telecom reform that allows the marketplace and not the government to pick winners and losers,” McSlarrow said in a statement. “We continue to believe that government should further study the emerging broadband marketplace before injecting itself into a thriving, dynamic market where investment and innovation are flourishing.”

The Federal Communications Commission already has sufficient authority to address network neutrality concerns, the OMB said in a statement.

“Creating a new legislative framework for regulation in this area is premature,” OMB said.

Peter Davidson, Verizon Communications senior VP for federal government relations, said the video-franchising bill represented a victory for consumers.

“The size of the bipartisan vote increases the momentum for a similar Senate bill,” Mr. Davidson said in a statement. “The benefits of competition – more choice, better services and lower prices – are now within reach this year.”

Industry critics said the refusal by lawmakers to beef up the bill’s network neutrality provisions will clear the way for telephone and cable companies to discriminate by controlling the content that will flow over their networks.

“Today’s Internet, which gives consumers control over what applications, services and content they want to access, will be replaced by an Internet that looks like a cable system — where network providers determine who gets on and at what price,” said Gigi Sohn, president of Public Knowledge.