from: Broadcasting & Cable [1]

Commerce Narrowly Defeats Build-Out Provision

By John Eggerton -- Broadcasting & Cable, 6/28/2006 1:05:00 PM

In an extremely close vote (12 to 10), the Senate Commerce Committee Wednesday defeated a phased-in video franchise build-out requirement.

The amendment, co-sponsored by Senator John Kerry (D-Mass.) and Barbara Boxer (D-Calif.) would have no build-out requirement for the first three years, then a requirement of a 15% building out within two years, then if that were achieved, another 20% until the build-out was complete.

Kerry called it called it a moderate proposal that would not require any buildout that was not predicated on the economic success of the service, saying it struck a balance between the interests of those investing capital and needing a return, and the government interest in as many people getting broadband service as quickly as possible.

Kerry pointed out that the telephone companies have already struck even larger build-out agreements in states including Utah, Florida, Maryland, Texas, Pennsylvania, Virginia, and Colorado, suggesting they were already doing more than the bill would require.

Senator Barbara Boxer (D-Calif.), the bill's co-sponsor, pointed out that current state franchise agreements would not be grandfathered, so their existing build-out requirements would be superseded.

But Republican votes, buttressed by the argument that any build-out requirement could scare off Wall Street, barely won the day.