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House Commerce Approves National Franchise Bill

By John Eggerton -- Broadcasting & Cable,
4/26/2006 6:42:00 PM

The House Commerce Committee, by an overwhelming vote of 42 to 12, has paved the way for the creation of national video franchises, though the bill itself still has a ways to travel before it becomes law.

The goal, say the bill's proponents including Committee Chairman Joe Barton, is to increase price and service competition to cable, while speeding the rollout of high-speed Internet service.
Both the House and Senate are revamping the 1996 Telecommunications Act to reflect the rise of the Internet to near-utility status and the government's compelling interest in promoting high-speed Internet access.

Opponents almost all of whom concede some video franchise reform is needed, say this bill will, instead, pave the way for telcos to cherry pick service while discriminating in the provision of Internet access, "fundamentally and detrimentally" changing the character of the Internet.

Whatever it will do, it won't be doing it just yet.

The bill must still pass the full House, where amendments can be reintroduced, then be reconciled with a Senate bill that will contain a lot more elements. Commerce Committee Chairman Joe Barton (R-Tex.) has almost guaranteed a bill will make it to the President's desk this session, daring reporters to bet against it. But at least one cable lobbyist privately advised this reporter to take that bet.

Not included in the bill are voted-down amendments that would have held national video franchisees to a build-out schedule and toughened prohibitions on red-lining--building out more attractive parts of a franchise and bypassing ones with less potential return on investment or, as Democrat Ed Markey puts it, "the other side of the tracks."

Still the bill as passed has language that requires telephone companies getting into video service to eventually serve all of a franchise, rather than allowing them to choose which parts of an area to offer service to, as the bill passed out of the Telecommunications Subcommittee allowed. That anti-redlining addition sat well with the cable industry, which had been pushing for it, but was not enough for Markey and others who wanted build-out requirements as well.

Also pleasing the cable industry was an amendment that was adopted that will allow cable companies to seek national franchises immediately if they currently have competition from an overbuilder.

Another amendment that was defeated would have prevented discrimination in service on the basis of race, color, creed, sex, or national origin. While everybody agreed they were against such discrimination, the amendment was voted down as unnecessary given that current civil rights laws already assured that. In addition, the amendment might have triggered a referral to the Judiciary Committee where, Barton said, "mischief" could be done to the bill which could delay its passage.

The committee voted 34-22 not to adopt an amendment toughening "network neutrality" provisions in the bill, an issue that has gained major traction and could resurface on the House floor and will almost certainly do so in the Senate version.

Rep. Ed Markey (D-Mass.), who spearheaded the amendment, had argued that without the amendment, the bill would spell the "end of the Internet as we know it," allowing telephone companies to discriminate in Internet service and fundamentally change the character of the Internet.

He and others warned during mark-up of the bill Wednesday that there would be backlash from constituents. Chairman Joe Barton strongly opposed the amendment, saying the bill already contained sufficient protections for Internet access--through FCC adjudicatory powers--and that anything more specific would be unnecessarily preemptive.

Net neutrality backer Media Access Project was not surprised, but saw hopeful signs for adding net neutrality in the Senate version of the bill, buoyed by the recent lobbying blitz by 'neutrality' forces.

"This outcome was expected," said MAP President Andrew Schwartzman, "but we are somewhat surprised - and encouraged - by the progress that net neutrality advocates have made in the last few weeks.

"A broad-based industry and citizen coalition supporting net neutrality is rapidly gaining steam. Prospects in the Senate are looking better and better."

Savetheinternet.com, one of the groups that had just coalesced around the issue, called the vote a sell-out and vowed to "continue rallying public support for Internet freedom as the legislation moves to the full House and Senate."

Withdrawn was an amendment to help law enforcement track online child pornographers. Barton said there were some germaneness issues. But he promised to get it in the bill before it is voted on in the House.

Verizon lobbyist Peter Davidson, senior VP for federal legislative affairs, pushed for swift passage sans any net neutrality additions. "Today, consumers won yet another decisive victory with committee passage of the video choice bill," he said. "The House should now pass, without delay, legislation to empower video consumers with more choices, and not weigh down this important reform with other issues -- such as mandating government regulation of the Internet."

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