FCC adopts relief for telecom companies planning TV offerings

In divided vote, Republican commissioners say action is critical for competition, while Democrats fret rules may be unnecessary.

WASHINGTON--In a boost for telephone companies, a divided Federal Communications Commission on Wednesday approved new rules designed to make it easier for those firms to enter the TV market.

Over objections from the two Democratic commissioners, regulators voted 3-2 to adopt the order that will set time limits for local communities to consider franchise agreements and establish FCC oversight to make sure communities don't require "unreasonable" conditions as part of their franchise agreements.

"I think it is critical that we make sure we're doing all we can to make sure we have greater competition in the market for the delivery of multichannel programming," said FCC Chairman Kevin Martin. He has argued that the surest way to do that--and to lower prices--is to ease the entry of telephone companies into the market.

As described at Wednesday's public meeting here, the FCC's order would require local governments to approve new franchise agreements within six months for new entrants and within 90 days for companies with existing access to city facilities; limit franchise fees; and prohibit so-called "build-out" requirements if they obligate new market entrants to serve all of a particular area within an "unreasonable" time frame or on a scale not expected of existing companies serving the area. A copy of the order's text was not immediately available.

The provisions are a direct response to ongoing lobbying by the nation's major phone companies, which have complained that the process by which companies must negotiate local franchise agreements with individual cities and municipalities before rolling out TV offerings is cumbersome and overly sluggish.

Phone companies were quick to applaud the FCC's decision. In a statement, Susanne Guyer, a Verizon senior vice president for federal regulatory affairs, said the agency "is standing up for consumers who are tired of skyrocketing cable bills and want greater choice in service providers and programming." The decision will help Verizon meet an "aggressive" schedule for rollout of its Fios TV service, Guyer added.

Lobby has asked for more widespread relief
The FCC rules attempt to establish national guidance but do not trump state laws that have already been enacted to address the phone companies' concerns, agency representatives said. Fourteen states, including Texas and California, have introduced some type of franchise reform. But the telecommunications lobby has been pleading for more widespread relief on Capitol Hill and now from the FCC.

Democratic Commissioners Michael Copps and Jonathan Adelstein railed against the new rules, saying there was not sufficient evidence that localities have been standing in the way of telephone companies' rolling out new TV services.

"We should have a record clearly demonstrating those local authorities are not up to the task of handling this infrastructure build-out," Copps said. Adelstein grilled members of the FCC's Media Bureau, which helped draft the rules, on names of specific communities that had reported problems, but they were unable to give him immediate answers.

When his turn to speak arrived, Martin ticked off a handful of instances in which it took BellSouth more than two years to receive video franchises in local communities in Florida and Georgia, though he did not explain the reasons for the delays. He also drew attention to an instance in which a New York town declined to grant Verizon a franchise unless it agreed "to film the holiday visit from Santa this year."

The Democratic commissioners also said the order runs afoul of a framework for granting local franchises established by federal law. Congress also drew up its own new national franchise proposal in the last session as part of a broader rewrite of communications laws, but that contentious bill failed to make it to a full vote in the U.S. Senate before politicians went home this month.

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