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From: Associated Press

Local Governments Sue FCC Over Cable Rules

April 3, 2007
By John Dunbar

Local governments across the country went to court Tuesday to challenge federal rules intended to spur competition in the cable television industry.

Lawyers for organizations representing cities and counties asked the appeals courts to invalidate rules the Federal Communications Commission approved in December to smooth the way for new competitors who want to offer cable television service.

At issue is whether the agency overstepped its authority when it voted 3-2 to require local governments to speed the approval process for new competitors, cap fees paid by new entrants to local governments and ease requirements that competitors build systems that reach every home.

To offer cable television service, a company must negotiate a franchise agreement with the local government. Some companies have claimed some of those local governments have made unreasonable demands during negotiations.

Among the organizations that filed the challenge, claiming the FCC abused its authority, are the Alliance for Community Media, the National Association of Counties, the National League of Cities and the National Association of Telecommunications Officials and Advisors.

Also filing suit were lawyers for Tampa, Fla., and the city of Larchmont, N.Y. Another group, consisting of Denver and surrounding jurisdictions, was expected to file a similar challenge Tuesday.

In a joint statement, representatives of the groups claimed the order will “severely restrict the ability of local governments to protect their citizens, rights-of-way, community channels and public safety networks.”

The appeals were filed in Richmond, Va., Philadelphia, New York City, Atlanta and Cincinnati. The sixth appeal was expected in Denver.

“Local governments want competition in the video marketplace, but the FCC’s order ignores local interests, provides regulatory advantages for a few of the largest telecommunications companies in the country, and is simply contrary to law in many respects,” the groups said.

FCC spokeswoman Tamara Lipper said the agency streamlined the franchising process so consumers could enjoy the benefits of competition, including lower prices and better service. “Competition, as we’ve all seen from our cable bills, is desperately needed in the video market,” she said.

The cable franchising rule, spearheaded by FCC Chairman Kevin Martin, drew protests from Democrats on the commission as well as from Rep. John Dingell, D-Mich., chairman of the House Energy and Commerce Committee.

Supporters, including Verizon Communications Inc. and AT&T Inc., have cited dozens of instances in which they contend local governments have made unreasonable demands of new competitors, effectively blocking them from offering service. Representatives of local government say many of those examples were either so old as to be irrelevant or were simply untrue.

Verizon and AT&T have spent billions of dollars to lay fiber optic lines around the country that will allow them to offer television service. In many states, they have persuaded lawmakers to pass statewide franchise laws.

The court challenges eventually will be consolidated into one circuit following a lottery. Arguments won’t begin for several months, and the case could go on for a year or more before it is decided. The groups also may ask the FCC or the courts to stay the order pending a resolution of the court challenge.