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from: Technology Daily

FCC Clears 'Shot Clock' Proposal

By Andrew Noyes

(Wednesday, December 20) A divided FCC approved a plan designed to tackle problems in local cable markets. The agency's two Democrats slammed the proposal, which won approval from the three-member Republican majority.

The initiative sets a 90-day "shot clock" on localities that grant video franchises to new entrants and bans them from unreasonably denying agreements to new providers.

Commissioner Jonathan Adelstein said the "highly dubious" plan "goes out on a limb" in its recommendations and "is certain to offend many in Congress who worked long and hard on this issue." He predicted "heavy oversight after the fact and a likely rejection by the courts."

The guidance amounts to "federalizing" the franchise process and will add to the confusion over how real competition can be achieved in the cable marketplace, Adelstein said, noting that the item is "breathtaking in its disrespect of our local and state partners."

Michael Copps, the other Democrat, said he could not support the guidance because it lacks proof that the current franchising system is "irretrievably broken." "I think we should pause, take a deep breath, answer questions and reach out for more consensus," he said.

Chairman Kevin Martin and Commissioners Robert McDowell and Deborah Tate, all Republicans, backed the plan.

McDowell said it "strikes a careful balance" to preserve "local control over local issues." Still, he predicted a backlash, saying that "appellate lawyers are already on the way to the courthouse."

The order will take effect early next year after appearing in the Federal Register, FCC officials said. The commission adopted a further notice to seek public comments on how its findings should affect existing franchises.

Susanne Guyer, the senior vice president of federal regulatory affairs for Verizon Communications, said the action will "fast-forward the delivery of new choices, lower prices and better services to consumers." The order will let her company negotiate more quickly with localities to deploy its fiber-optics-based service, FiOS TV.

The Consumers Union called the FCC's decision "a risky move based on only flimsy evidence that consumers will actually benefit."

Also on Wednesday, the FCC unveiled a report on cable industry rates that showed the average monthly price rose 5.2 percent, to $43.04, in 2005. John Scott, an economist for the FCC Media Bureau, said that since the 1996 telecommunications overhaul, the average cable price has soared 93 percent -- three times the rate of inflation.

Cable prices in areas without meaningful competition were 73 percent higher than those with competitors, the congressionally mandated annual study found. Communities with a second cable operator experienced 17 percent lower prices, Scott added.

Copps said the report did not "achieve the level of comprehensiveness and analysis that I've called for over the years." The study relied on an "unreliable definition of competition" and continued to take cable operators' word on rate hikes "without any auditing of our own."

Given the "staggering sum" consumers pay monthly for video service, the commission has the "plain responsibility to provide more in-depth research" in the future, he said. Martin pledged to support working toward "sufficient audits" of the statistics received from cable companies.

Tate said the paper does not reflect "some of the popular consumer pricing options for bundles of services." She hopes future reports can incorporate data on "new and creative video packages," like family-friendly tiers and themed tiers.

In a pre-emptive strike on Tuesday, the National Cable and Telecommunications Association argued that consumers are getting "a better value for their cable subscription than ever before."