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from: Media Week

Senate Panel OKs Franchising Bill

Todd Shields

JUNE 28, 2006 -

The Senate Commerce Committee on Wednesday passed a bill aimed at easing telephone companies' emergence as competitors to cable operators, sending the measure on to the full Senate.

Prospects for final passage are uncertain, in part because of heated disagreement surrounding potential corporate management of Internet access-–the issue known as Net neutrality.

The bill also included language aimed at protecting affiliates from some potential indecency fines, and requiring federal regulators to publish ownership rules before changing them.

The legislation, which passed on a 15-to-7 Republican-led vote, took shape over three days of voting sessions. The House already has passed its counterpart measure. Each bill aims to speed Bell companies’ entry into local markets with TV programming sent over high-speed lines that also carry Internet and telephone services.

Senators on an 11-to-11 vote late Wednesday defeated an amendment to forbid network operators from charging content owners for access to Internet customers.

Proponents of the failed amendment said letting companies rather than consumers choose what content would flow freely over the Internet would fatally undermine the wide-open nature of the Web. They say they will take their fight to the Senate floor, where 40 of the chamber’s 100 votes can prevent final action.

“Broadband operators will be able to pick winners and losers,” said Sen. Olympia Snowe (R-Maine), a co-sponsor of the failed language. “That is the cable model. It hasn’t (been) and shouldn’t be the Internet model.”

Opponents of the so-called Net neutrality amendment said the measure amounted to unnecessary regulation of companies that would, in any event, be forced by a competitive marketplace to offer an unfettered Internet.

“Imposing a heavy-handed regulation before there’s evidence of a problem is wrong,” said Sen. Ted Stevens (R-Alaska), the Commerce Committee chair. He said language in the bill “fully protected” consumers, with directives to federal regulators to alert Congress if problems arise.

Ten Democrats and Snowe voted for the Net neutrality amendment. The remainder of the committee’s Republicans voted against.

The Senate has 55 Republicans, 44 Democrats and one independent. Stevens acknowledged the bill cannot pass without support of 60 senators.

To promote video competition, the bill would let Bell companies invoke a federal procedure when introducing their new TV services, rather than seeking locality-by-locality permission as is traditional.

Democrats objected that the measure would undermine rate regulation, and eliminate traditional protections against service providers bypassing poor areas. Republicans said competition would prevent abuses.

In other action the committee:

-- voted to authorize federal regulators to impose copy-protection controls for digital TV broadcasts that a court invalidated. It also would set in motion processes aimed at devising similar anti-theft measures for digital radio broadcasts.

-- voted to exempt affiliates from indecency fines for network programming they have not had an opportunity to review. The measure would partially insulate many station owners from the recent tenfold increase of maximum indecency fines to $325,000.

-- told the Federal Communications Commission to publish any revisions to media ownership rules before voting on the rules. The agency recently commenced a review aimed at possibly loosening the rules.

-- rejected a bid by Sen. John McCain (R-Ariz.) to grant incentives for cable operators who offer individual channels for sale.

-- voted to extend to cable and satellite operators time limits on advertising during children’s programming that now apply only to broadcasters, and voted to prohibit interactive advertising during children’s programming.

-- told the FCC to study commercial broadcasts of radio and TV programming to students on school buses. Sen. Byron Dorgan (D-ND) said a pilot program is set to begin in September in Massachusetts.

-- told the FCC to move toward issuing licenses for low-power FM radio stations. A study conducted for the FCC found such stations could operate without harmful interference that commercial broadcasters say they fear.