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from: Law Times

Bill Would Establish Federal Role for Cable
By Joe Crea
Legal Times
05-15-2006

In politics, as most know, 10 days can be a lifetime. Imagine, then, what can transpire in 10 years.

Back in the mid-1990s, Texas Republican Rep. Joe Barton, chairman of the House Committee on Energy and Commerce, was a staunch proponent of local rights when it came to telecommunications. Now he has given his blessing to a telecom bill that would nationalize cable franchising. Under the measure, cities and municipalities would be stripped of their oversight of local cable franchises, opponents of the bill say, and the decision-making power would be transferred to the Federal Communications Commission in Washington.

A Southern conservative enhancing the power of the federal government? At a time when members of the majority party are attempting to get back to their grass roots and touting the virtues of federalism, Barton's move seems about as Republican as vichyssoise. That's especially true for a lawmaker who was pivotal in strengthening the hand of local government when he helped draft the Telecommunications Act of 1996.

"It's hard when you have somebody who has been considered to be one of your champions for so long, so steadfast at protecting those principles of federalism and property issues," says Libby Beaty, executive director of the National Association of Telecommunications Officers and Advisors. "This bill creates a very bad situation."

Of principle concern to critics of the Communications, Opportunity, Promotion and Enhancement Act of 2006 (COPE) is the federalization of video service franchise licenses, which companies must obtain in order to do business in a given community. By kicking the license-review process up to the national level, the FCC would become a de facto secretariat, weighing municipal cable matters from its perch in the nation's capital. Opponents of the bill argue that locals would be forced to hire lawyers to represent them in Washington, as rights-of-way protection for local authorities would no longer be handled in district, local or county courts.

But the Bells and Big Telecom support the House measure as a means of increasing competition and streamlining the franchising process. As Gary Lytle, a lobbyist for Qwest Communications International, says, the FCC is not being given more authority, just the ability to assert that there should be a single U.S. policy on franchising, not a multitude of local ones.

"More choice is good when we streamline the regulations, not add to them," he says.

Beaty and her troops are leading a coalition opposed to the bill composed of city and municipal organizations, including the U.S. Conference of Mayors, the National League of Cities, and the National Association of Counties.

Despite Barton's support for the bill, some in the coalition assert that the Texan is still looking to protect local authority. In fact, one lawyer opposed to the measure who requested anonymity says that because Barton does want some protections, he was willing to steer the bill out of his committee in an effort to keep the Bells and cable companies quiet during the markup.

"Mr. Barton is being tested here by others on the committee," says the lawyer. "They are pushing Barton to show that he can do something over the objections of [ranking member John] Dingell [D-Mich.]."

Dingell was one of four lawmakers to vote against the bill in committee.

Sens. Ted Stevens, R-Alaska, and Daniel Inouye, D-Hawaii, the chairman and ranking member of the Senate Committee on Commerce, Science & Transportation, introduced their own version of the bill earlier this month. While it is technically different from the House bill, both measures have the same aim: to accelerate and streamline the franchising process. The Bells slightly prefer the explicit video-franchising provisions in the House bill over the Senate version, says Andrew Lipman, a partner in Bingham McCutchen's telecommunications practice.

Members of the coalition say they don't necessarily dispute the intent of the bill (enhanced competition is, after all, to their benefit), rather they object to its emasculation of local franchising authority.

But Barton, lobbyists say, was in a jurisdictional tug of war with Rep. James Sensenbrenner, R-Wis., who chairs the Judiciary Committee and wanted oversight of the bill. If Barton were to publicly concede to the coalition's demand to continue to have rights-of-way disputes heard in local courts, as opposed to by the FCC, he would have to refer his bill to Sensenbrenner's committee to get the amendment.

ANEMIC LOBBYING
But the coalition of local interests hasn't taken an aggressive tack on lobbying the bill, says Matt Polka, president of the American Cable Association, which represents 1,000 independent cable businesses. In the past the Bells have headed off local opposition to statewide franchising by making promises to extend services and even offering to share fees with local governments, but there is no evidence they've made such offers to municipalities in connection with COPE.

But members of the local coalition say they have been steamrolled by a publicity blitz in favor of the bill sponsored by the powerful phone companies. For example, the United States Telecom Association -- which, according to Senate filings, spent $11.4 million from January to June 2005 -- has fired a fusillade of ads in favor of the bill, featuring a simple, sellable message that competition is a good thing.

Additionally, the bill, curiously enough, was not assigned a number until earlier this month, well after it was marked up and reported out of committee, thus escaping significant public scrutiny.

"Look, we can't spend the amount they spend in Washington," says Gerard Lederer of Miller & Van Eaton, a firm with a large telecommunications practice. "Where we are different is that we have local advocates. You have to work the grass roots, as opposed to the Astroturf that the industry has been ginning up."

In one grass-roots campaign the local coalition has tried to stir up opposition to COPE inside the Congressional Hispanic and Black caucuses. A letter the National League of Cities sent earlier this month to both caucuses notes that the measure would adversely affect economically disadvantaged or minority communities by granting providers of broadband-video service the power to pick and choose what neighborhoods to provide service to. "The bill would even allow broadband-video providers to avoid maintaining or upgrading facilities in certain neighborhoods, while affluent neighborhoods receive cutting-edge services and lower prices," the letter states.

But the Congressional Black Caucus is divided over the measure. Three of its members voted for COPE, and one of them, Rep. Bobby Rush, D-Ill., was a co-sponsor of the bill. And Rush is currently being criticized for ethical lapses, after having received a $1 million charitable grant from SBC/AT&T for a community center he founded, according to a Chicago Sun-Times report.

As for Barton, he no longer has to defend local franchising. Last September, Republican Texas Gov. Rick Perry signed a state law that moved cable franchising from the local to the state level, allowing new entrants to obtain a single state-issued franchise provision, as opposed to franchises from multiple municipalities. That legislation was supported by SBC Communications and Verizon Communications Inc.

And in the view of many telecom lobbyists, such as Gregory Rohde at e-Copernicus, which represents BellSouth Corp. and Motorola Inc., a national franchise law is the inevitable next step as technology goes increasingly global.

"Those local and state boundaries are not as significant as they once used to be," Rohde says. "Regulators don't want to lose power, but is that a reason to hold the industry back?"