from: TV Technology [1]

Local Governments Challenge FCC Video Franchising Rules

April 6, 2007

Several lobbies representing local governments have petitioned the courts to get the FCC's recently issued video franchise rules reversed. Five appeals, filed in separate federal courts April 3, claimed the FCC exceeded its authority with the franchise order, adopted in December by a vote of 3-2.

The order streamlines entry into the multichannel video delivery business by diminishing the power of local franchise authorities, or LFAs. It was aimed at speeding up the nationwide availability of telcoTV, ostensibly to put competitive pressure on escalating cable rates.

FCC Chairman Kevin Martin said the commission had to step in because LFAs regularly make unreasonable demands in franchise negotiations. The LFAs begged to differ, and the parties supporting the court filings said the FCC order was "an abuse of discretion, unsupported by substantial evidence, and in violation of the United States Constitution."

The LFA supporters include the Alliance for Communications Democracy, Alliance for Community Media, National Association of Counties, National League of Cities, National Association of Telecommunications Officials and Advisor and The United States Conference of Mayors.

"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," a joint statement from the groups said.

Appeals were filed in federal courts April 3 in New York, Atlanta, Philadelphia, Cincinnati and Richmond, Va., according to published reports. A sixth was expected in Denver.

The petitioners are not alone in their assessment of the franchise order. FCC Commissioner Jonathan Adelstein called it "legislation disguised as regulation."

Congressman John Dingell (D-Mich.), chairman of the House Energy and Commerce Committee suggested it was a stepping on of Congressional toes, and the former chairman, Republican Joe Barton of Texas, criticized the order for not providing a similar structure for incumbent cable operators.

The FCC order gives LFAs 90 days to cut a deal with entities that already have access to public rights-of-way, as most telcos do. It also prevents LFAs from making a new franchisee offer service to very household in a community, and it limits the amount of fees LFAs can collect.