The FCC Opens The Lines Of Communication Commerce
Wednesday, December 20, 2006SUSIE GHARIB: The Federal Communications Commission voted today to make it easier for telecom providers like Verizon and AT&T to offer video services to consumers. With cable rates on the rise, the agency hopes new competition will bring down prices and provide better service. But as Stephanie Dhue reports, the move also takes local governments out of the loop, and they're not happy with the agency's decision.
STEPHANIE DHUE, NIGHTLY BUSINESS REPORT CORRESPONDENT: When a phone company wants to offer video service, it must get a franchise agreement from a local government. But sometimes that process can take years. FCC Commissioner Robert McDowell says the new rules will keep local governments from delaying the approval of cable competitors.
ROBERT MCDOW ELL, FCC COMMISSIONER: It guards against localities making unreasonable demands of new entrants, while still allowing those same localities to protect important local interests through meaningful negotiations with aspiring video service providers.
DHUE: The new rules require local cable franchising authorities to act on new applications from phone companies within 90 days. It bans local government from forcing competitors to build out new systems more quickly than the existing cable company and limits the amount of franchise fees and contributions localities can charge. But Democrats on the commission say preempting local governments is the wrong approach. Commissioner Jonathan Adelstein says the rules will hamstring local municipalities.
JONATHAN ADELSTEIN, FCC COMMISSIONER: It would less about fiber to the home and more about fiber to the McMansion, because these localities will be precluded from ensuring that there is an orderly build out according to what authority Congress delegated to them.
DHUE: Local governments are likely to challenge the new rules. Jeffery Arnold of the National Association of Counties says the Federal government overstepped its bounds.
JEFFREY ARNOLD, DEPUTY DIRECTOR, NATIONAL ASSOCIATION OF COUNTIES: Part of the problem with a national franchising scheme is that it sets essentially a single standard for what's right for every single community.
DHUE: Analyst Paul Gallant says phone companies like AT&T and Verizon are losing market share to cable competitors that offer voice, video and high speed Internet.
PAUL GALLANT, MEDIA ANALYST, STANFORD WASHINGTON RESEARCH: Right now, most of the phone companies cannot offer that triple-play package, so they really need to speed their video deployment, and that's what the FCC is trying to help them with today.
DHUE: The new rules are already generating static. Key incoming House Democrats blasted the commission for siding with phone companies over local governments. Stephanie Dhue, NIGHTLY BUSINESS REPORT, Washington.
