from: TV Week [1]

Cities Challenge FCC on Cable Franchise Order

March 5, 2007
By Ira Teinowitz

The formal publication of an FCC order intended to jump-start competition by making it easier for phone companies to obtain local cable franchises has kicked off a major battle with the nation’s cities that could tie up the FCC’s order for years.

Even as phone companies today praised the Federal Communications Commission for acting, the National League of Cities was expected to announce it would challenge the FCC order; the league already listed overturning the order as among its top legislative priorities this year.

The cities have argued the FCC is illegally seeking to take away their power to regulate the cable industry and said it’s going beyond its legal authority.

The cities are upset about a section of the Video Franchising Order in which the FCC limited cities’ ability to demand concessions to grant cable franchises. Under the new order, cities have 90 days to reject a request; if they don’t act, the franchise will be granted.

FCC chairman Kevin J. Martin and phone company backers said the order is an answer to some of the wild demands cities have made that have delayed local consumers from the benefits of competition.

“The record collected by the commission in this proceeding cited instances where [cities] sat on applications for more than a year or required extraordinary in-kind contributions, such as the building of public swimming pools and recreation centers,” Mr. Martin said today as the FCC issued the order, which was approved by the FCC in December.

Walter B. McCormick Jr., president and CEO of USTelecom, called the FCC’s action “a critical step forward in bringing consumers greater choices, exciting new services and vibrant video competition.

“We commend Chairman Martin’s steadfast leadership to help spur broadband deployment across the country and appreciate the Commission’s hard work on this important issue,” Mr. McCormick added.

Marilyn O’Connell, chief marketing officer of Verizon Telecom, said the order “removes obstacles to the continued aggressive rollout of our all-fiber-optic network and our FiOS TV service,” adding that it would be difficult to proceed without some assurance that common sense would prevail in franchise decisions.