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from: Broadband Reports

FCC Loves Their TelcoTV
Crafting new order to grease the rails...

Posted on 2006-12-01

The FCC is planning to use an upcoming report on high cable prices to establish that Satellite and cable providers exist in a "cozy duopoly" and that streamlining the video franchise system for telcos would speed up TV competition. Eager to eliminate city-by-city negotiations (and lobbying), the baby bells have been trying to pass a national franchise law with no luck. They have, however, been successful in passing statewide franchises in Texas, California and New Jersey.

The USAToday piece suggests that franchise negotiations have slowed Verizon's efforts to offer FiosTV, but as we recently noted, Verizon themselves have stated that isn't the case. As for AT&T, they've declared that their IPTV service does not fall under traditional cable laws, so they've ignored the franchise process entirely - suing municipalities who disagree with them.

That said, the FCC's order does resolve one problem with the franchising system: unreasonable demands by municipalities during the negotiations process.

"The order would also make it harder for localities to impose "unreasonable" requirements. In one case, the FCC says, a video provider was asked to build a recreation center and swimming pool. In another, a video applicant was asked to fork over $1 million and fund a $50,000 scholarship with annual contributions."

Critics of franchise reform argue that the push by telcos strips localities of any negotiating authority, eliminates public access and limits a municipality's ability to hold these companies to deployment watermarks for next generation services. The debate generally hasn't been about whether these companies should have easy entry into the TV market. Instead, it's focused on what kind of reform balance can be struck to ensure consumer protections and reasonable deployment.