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FCC Votes to Ease Hurdles to Cable Competition

Dec 20, 2006  •  Post A Comment

Hoping to speed cable competition a divided Federal Communications Commission on Wednesday limited cities’ ability to demand concessions when granting cable franchises and imposed a 90-day shot clock for cities to act on requests.

Congressional Democrats, cities and existing cable system operators all questioned the move as the action showed signs of opening up a big new Washington policy fight between FCC Chairman Kevin Martin and his critics.

The National Cable & Telecommunications Association called the FCC action unfair, saying it would give new franchise applicants major advantages. It said it was considering suing the FCC over the new rule.

“We don’t believe the commission has the legal authority to establish separate regimes for incumbents and new entrants in today’s highly competitive marketplace,” said NCTA President and CEO Kyle McSlarrow.

The National League of Cities said it was “confounded” that the FCC “would systematically block the ability of local governments to protect their citizens, local assets and revenues.”

Congressional Democrats, already none too pleased with Mr. Martin for trying to get Commissioner Robert McDowell to vote on a Bell South/AT&T merger from which he had recused himself, accused the FCC of acting with “haste” and using dubious legal authority.

“While the FCC’s action today represents an early Christmas present for the Bell telephone utilities, it is like a lump of coal for many communities around the country,” said U.S. Rep. Ed Markey, D-Mass., who will head the telecom panel of the House Energy and Commerce Committee next year.

The FCC’s action Wednesday on a 3-to-2 vote adopted an order rewriting some of the FCC’s franchising rules. It would give cities just 90 days to weigh new requests for cable franchises and also further limit what cities can demand in compensation for issuing franchises. It also would limit the city’s ability to require that new franchisees serve all residents.

The FCC’s GOP majority said the action was necessary because only competition will stop rising cable rates. They suggested that cities’ delays in granting franchises and unreasonable requests for compensation or service are holding back competition and hurting consumers. The FCC said it would initiate a rulemaking to see whether the limits on what cities can demand should also apply to existing cable franchisees.

Democratic commissioners questioned the FCC’s legal authority to limit cities, why the FCC was acting in the face of some congressional ire and also whether the action would tie up the FCC in suits that could delay resolving any issues. The FCC already faces lawsuits over its indecency actions and it is reconsidering media ownership as a result of a court order.

The FCC action came as the agency released its annual report on cable TV rates. That report said that cable rates for the year ending Jan. 1, 2005, increased 5.2 percent for basic channels and expanded basic, and had risen 93 percent since Congress enacted a telecom reform act in 1996.



(Editor: Liff)