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The Senate Commerce Committee is working on a revised draft of its telecom reform bill and will push back a markup to June 20. The committee is also adding a third hearing on the bill June 13--the first was held Thursday, May 18, the second will be May 25.

Senate Telecom Draft May Be "Too Tough" on Cities

By John Eggerton -- Broadcasting & Cable, 5/18/2006 10:34:00 AM

In the first of two hearings on its version of a telecom reform bill (S. 2686), Commerce Chairman Senator Ted Stevens (R-Alaska) said that the Senate's draft been criticized as being too hard on the cities. He said that was probably a fair criticism and that the committee would work to find a middle ground.

Still, Stevens said he had the votes to pass a bill out of committee and in the Senate.

One of those critics was his own co-chairman, Daniel Inouye (D-Hawaii), who said that the bill will require "substantial revision" if it is to pass in this Congress. He said the bill as written precludes local governments from ensuring uniform system upgrades that will benefit those on both sides of the track, and eliminates key consumer protections.

Another critic was Democrat Bill Nelson of Florida: "This bill does not protect the cities, and that concerns me." Ben Nelson (D-Neb.) said that if they did not work toward resolving concerns on a bipartisan basis, he saw little chance of passage either.

Stevens took almost 10 minutes ticking off the different elements of the Senate telecom bill including video franchise reform, net neutrality, municipal broadband, unlicensed devices in the broadcast band, money for first-responder equipment, the broadcast flag, expanding the Universal Service Fund, giving a shout out to the legislators whose individual bills had been folded into the omnibus bill.

Stevens reminded his audience that the bill was a draft, not the final form of the bill. He said he would review recommended changes by Inouye over the weekend and discuss them. A second hearing on the bill is scheduled for May 25, and a third hearing has been added on June 13, with a markup pushed back a week to June 20..

Sen. John Ensign (R-Nev.) said that he thought local governments should be pretty happy with the 1% of network revenues being set aside to help fund public access and government channels. The Senate bill also preserves more local control over franchises than the House version's national franchise scheme.

Senator Byron Dorgan ( D-N.D.) called "net neutrality" an important value, though he chose the term "internet freedom," telegraphing clearly his support for stronger language ensuring network nondiscrimination in the provision of Internet service. Seantor Barbara Boxer (D-Calif.), another net neutrality backed, reiterated the warning that the committee had to "get that issue right).

Witness Michael Guido, mayor of Dearborn, Mic., said the bill took too much power away from the street, asking whether local decisions are better made by mayors or county manager, or by some FCC staffer. He also argued for including home shopping revenues in franchise fee calculations, which the bill excludes, and said that the bill would not prevent "red-lining" or only building out to more profitable customers.

National Cable & Telecommunications Association President Kyle McSlarrow advised the committee to stay as far away from network neutrality as currently constituted, as possible, saying it was an issue that need extensive study. Reasserting his indsutry's support of franchise reform, McSlarrow still argued for more local control of franchises, agreeing with Guido that it would be hard to have a meaningful nondiscrimination clause managed out of the FCC.

United States Telecom Association President Walter McCormick praised the bill and pushed for passage in this session, warning that a one-year delay in passage could cost the country $8 billion. To put a finer point on it, he broke down the cost to a handful of the home states of committee leaders.

The bill, whose primary element is reforming the multichannel video process, has been the subject of intense lobbying by the telcos on one side and open Internet access groups. "It certainly has stimulated discussion, that's for sure," said Stevens, understating the issue.

The House Commerce Committee has already passed a version of video franchise reform that does not include most of the other issues the Senate bill deals with.

The key to both bills is spurring competition in the rollout of video and Internet service nationwide, which is a Bush administration and congressional priority.