From: National Journal - Technology Daily [1]

Provisions In Senate Telecom Bill Mirror Those In House Counterpart

By Drew Clark

(Tuesday, May 2) New Senate telecommunications legislation would take away the ability of local governments to reject video franchises -- effectively granting the former regional Bell operating companies the same expedited entry into video services as proposed in a competing House bill.

Introduced by Senate Commerce Chairman Ted Stevens, R-Alaska, the measure also addresses a range of issues not mentioned in the House bill, including changes to a fund to guarantee phone service to all Americans. Commerce ranking member Daniel Inouye, R-Hawaii, reluctantly co-sponsored the legislation but voiced many reservations.

The Commerce Committee plans to hold May 18 and May 25 hearings on the bill.

Notwithstanding dramatic differences in how they are drafted, both bills address video franchising in a way likely to benefit Bell companies. Most significantly, neither bill would require new video entrants to offer service in all parts of their regions, according to Senate Commerce Committee aides.

The call for such "buildout" language has been at the center of the franchising tussle between the Bells on the one hand and the cable industry and local governments on the other.

Inouye and Sen. Conrad Burns, R-Mont., had drafted principles that urged a continuation of the local franchise process but on an expedited basis. The cable industry endorsed those principles.

Under existing local franchise agreements, cities traditionally have imposed some sort of requirement that video providers offer services to all residents.

Stevens' bill, S. 2686, appears to preserve local franchise authorities' role in cable television licensing, albeit in a streamlined franchising process.

But, although local governments may negotiate for a requirement that Bells offer services to everyone, the Bell applicants are free to reject them under the Senate bill. If an application were not approved within 30 days by the locality, permission to offer video is granted under the terms of a "standard franchise agreement form."

That generic form would be provided by the FCC, and there is no mention of any buildout requirement on the standardized form.

"We set national standards if they don't come out with an agreement" on the local level, a Senate Commerce Committee aide said. "We were trying to be responsive to the Inouye-Burns principles, which called for local franchising. They may not see it that way."

The aide added, "There are other people on the Republican side who didn't think we should do it at all, but we tried to lean toward what Sen. Inouye said he was more comfortable on -- local franchising."

Under both the Senate and House bills, Bell companies would have to pay the same franchise fees as current cable operators and provide the same access to public, educational and governmental television channels.

The House bill, H.R. 5252, approved by the Energy and Commerce Committee last week, would create a national video franchise.

But a last-minute change favorable to the cable industry would define the local franchise authority as the implementation area of its national franchise. That could mean that anti-discrimination language in the House bill would end up forcing Bell companies to offer services within entire counties.