from: Broadcasting & Cable [1]

Martin Pitches Telco-Aid Package

By John Eggerton 12/6/2006

It looks as though FCC Chairman Kevin Martin could beat Congress to the punch of revising the video franchising process, including putting a shot clock on local franchising authorities, a cap on franchise fees, a limit on build-out requirements, and perhaps maintaining rules preventing exclusive programming contracts between cable operators and programmers in which they have an interest.

In effect it would be adopting key telco-backed provisions that were part of a stalled telecommunications reform bill.

The means to that end would be the FCC's open inquiry into ways in which the local franchising process may be impeding price and programming competition for video service. Martin told a telecommunications symposium in Washington Wednesday that the FCC should take steps to advance telephone company entry into video to help get a handle on rising cable prices and offer more choice for consumers.

In his speech to the Phoenix Center's US Telecoms 2006 Symposium , he called that competition "desperately needed," saying that cable rates have risen 93% in the last decade, though cable has also vastly increased its number of channels and associated offerings. And he said competition from satellite alone is not sufficient.

Martin said there are steps the FCC should take to address complaints of delays by local franchising authorities in awarding franchises, franchise fee issues and "unreasonable build-out requirements."

Those are all issues that were addressed in national video franchise reform legislation that failed to pass in the current Congress.

"To ensure that delays in action do not negatively impact the development of video competition in any area," Martin said, "the Commission should set time frames for local franchising authority to act on a new entrant’s franchise application."

"It would seem reasonable to expect a LFA to take action on an application for those entities that are already authorized to access a community’s rights-of-way," he said, a telephone company being an obvious example, "within 90 days and within six months for action on other applications."

As to capping franchise fees, Martin pointed to one example of an LFA asking for "a new recreation center and a swimming pool." Such in-kind payments unrelated to the franchise are an obstacle to new entrants," he said.

Martin said that build-out requirements on telcos should be no greater than that of the incumbent cable company.

And finally, Martin said he wants to initiate a rulemaking and take action before the sunset next year of FCC rules that prohibit exclusive contracts between cable operators and co-owned programmers

"To evaluate the importance of these rules for video competition," he said, "I have proposed that the Commission initiate a rulemaking proceeding to examine the issue to enable us to act prior that sunset."