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Technology Daily
from: National Journal

Senate Commerce Panel Rejects Key Democratic Telco Amendments

By Drew Clark

(Tuesday, June 27) The Senate Commerce Committee rejected three Democratic amendments to a telecommunications package. The amendments covered Internet telephone regulation, communications subsidies for emergency responders and city cable franchises.

The committee rejected, 7-15, an amendment that would have allowed states to regulate Internet telephone calls. It also rejected, 10-12, the call to add a subsidy for emergency communications to the universal service fund. The third amendment to allow local conditions on cable system sales failed 9-13.

The three votes came as the committee continued its marathon debate of a bill, S. 2686, offered by Chairman Ted Stevens, R-Alaska. Stevens began Tuesday's session by introducing a package of 16 separate modifications. The package was accepted by voice vote.

The most significant of those changes was Stevens' own amendment on video franchising. The change "includes the final four issues requested by the cities," according to a statement by Stevens.

Municipalities have been reluctant to accept the key purpose of the bill's video-franchising title, which would allow Bell telephone companies quick entry into the pay-television marketplace by circumventing the review process for local cable franchises.

Although Stevens' measure would let the Bells use an FCC standard-form contract to obtain local franchises, Stevens said he had included more than 20 changes requested by cities.

The changes include: increasing from 75 to 90 days the amount of time that cities would have to negotiate with new video providers before the contract applies; allowing cities to collect monies on fees already paid by cable operators; requiring AT&T's Internet television service to be subject to new franchising requirements; and ensuring that localities not lose existing public-access channels and institution networks.

The most contentious video-franchising item -- deciding whether Bell companies and other new market entrants must agree to expand service to all neighborhoods within their franchise areas -- has yet to be considered. The committee is likely to return to that subject Tuesday afternoon. Other amendments governing video services likely will be offered late.

Bill language on the "broadcast flag" copy-control technology and issues pertaining to digital television are next up for debate.

The committee appeared to close its consideration of language pertaining to the universal service fund without voting for a cap that would limit the size of the $7.3 billion fund. Sen. John McCain, R-Ariz., was expected to offer a related amendment.

At Stevens' behest, the committee rejected an amendment by John (Jay) Rockefeller, D-W.Va., that would have allowed public-safety officials to tap into the fund. The USF currently subsidizes rural telephones, classroom Internet connections, low-income residents and rural health communications.

Byron Dorgan, D-N.D., also introduced an amendment allowing state regulation of Internet telephone service. It attempted to reverse an amendment offered by John Sununu, R-N.H., to pre-empt that state regulation. The vote for Sununu's amendment on Thursday was 14-8; the vote against Dorgan's on Tuesday was 7-15.