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From: Tech Dirt

FCC Blames Your Town for the Uncompetitive TV Market the FCC Helped Create

December 21, 2006

Yesterday the FCC voted 3-2 along partisan lines to pass new guidelines that make it easier for Baby Bells to get into the TV business, protecting them from “unreasonable build-out requirements” by municipalities — though the new rules don’t really specify what “unreasonable” means.

With the Baby Bell push for a national franchise system scuttled by network neutrality concerns, FCC chief Kevin Martin has been greasing the rails for this reform vote for months, villianizing local towns and cities by proclaiming it is their fault that cable rates are sky-high, and that the existing franchise system is why we’re not basking in a TV & broadband competitive utopia.

Of course we’ve noted that it’s not clear that the current FCC chief even actually knows what competition is — much less how to bring about more of it via policy change. High cable prices and limited broadband deployment are thanks in part to flawed FCC policy over the years, not necessarily because an Ohio suburb tried to get Comcast to build them a community swimming pool.

“Unreasonable” demands by town and city leaders are a major reason why many people have cable service today — negotiations forcing companies to deploy service into less profitable rural areas they might otherwise ignore.

Closer inspection shows the existing franchise system isn’t quite the utopian firewall Martin is making it out to be. In a rare moment of un-scripted candor Verizon recently stated the existing system hasn’t really slowed the pace of their Fios deployment, while AT&T has found their own simple solution: ignore the franchise system entirely and sue anyone who disagrees.

There’s also the issue of whether the FCC actually has the authority to make these changes, which will likely result in a protracted legal battle. None of this is to say franchise reform isn’t necessary or that there aren’t problems — municipalities do sometimes make absurd demands, and many are obnoxiously greedy in their efforts to fill the local coffers.

But Martin is using the franchise system’s dysfunction as a scapegoat for failed FCC policy. Despite all the talk of reform and competition, it’s not hard to see what the lobbyists are shooting for here. While they’ve convinced Martin that this is overall a good thing, the end result is going to erode local authority, legalize cherry picking and limit the number of people the Baby Bells have to lobby.