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FCC Gives Telcos Big Victory

By John Eggerton
from: Broadcasting & Cable, 12/20/2006 2:09:00 PM

Video franchise reform went from being stuck in neutral in Congress to being thrown into overdrive at the FCC.

The FCC Wednesday granted telcos a big victory and what amounts to an FCC version of the sweeping video franchise reform legislation that failed to pass Congress over the issue of network neutrality.

In a 3-2 vote accompanied by long and sometimes heated statements, the commission's Republican majority approved an order that would put a shot clock on local franchise negotiations, limit build-out requirements and franchise conditions, and cap public and government access channel investments. changes telegraphed by FCC Chairman Kevin Martin over the past several weeks.

The Democratic commissioners who opposed the changes said they agreed that some video franchise reform could be helpful, but called the majority proposal an overreaching that would get smacked down by the courts. Even Republican Robert McDowell conceded lawyers were probably already on their way to the courthouse.

The Republicans argued that it was well within their authority--McDowell ticking off several sections of regulatory cover, to make the changes to prevent local franchising authorities from unreasonably delaying franchise grants and the rollout of price and service competion to cable.
The Commission teed up that decision with its annual cable price survey in the same meeting, which found rates had gone up by 5.2% in 2006, and 93% since the deregulatory 1996 Telecommunications Act.

Martin has pointed to "staggering" cable prices that the study found were not lowered by satellite competition in arguing for helping the telephone companies more easily compete in video and broadband.

The National Cable & Telecommunications Association at press time, even before the item had been voted, had already scheduled a 3:30 press conference to respond.