Martin Phones In on Franchising
LAS VEGAS -- Telecom ’05 -- Federal Communications Commission (FCC)
chairman Kevin Martin told an audience of telecommunication industry professionals the Commission plans to discuss video franchising issues in its November meeting, and suggested some sort of regulatory action may result. (See Panel: Video Changes the Telecom Act and Martin: FCC to Classify IP Video.)
More pleasing words could not be heard for many in attendance here. The video franchising issue has been increasingly on the minds of telcos and their equipment vendors in recent months as RBOCs like SBC Communications Inc. (NYSE: SBC) and Verizon Communications Inc. (NYSE: VZ) move closer to large-scale rollouts of their video products. (See SBC Stretches Lightspeed Timeline .)
Traditionally, video service providers (to date, cable companies) have been required to obtain local-level franchises in each market where they sell video. It is a rigorous and costly process, and one the telcos would very much like to avoid.
Rest assured a full-court press by telco lobbyists is under way to pass legislation creating a state-wide video franchise or no franchise at all. (See New Bill Boosts Telecom and New Telecom Bill Draws Raves.) A similar action by the FCC would be a home run for telcos, too.
“Many of you have been trying to roll out video services to your customers, and we are beginning to hear complaints from incumbent LECs that some local authorities may be making the process of getting franchises unreasonably difficult,” Martin said.
Martin said the entrance of competitive video providers into new markets, regardless of the technology used to deliver the service, should be encouraged.
"I recently presented my colleagues with a Notice of Proposed Rulemaking that asks how the local franchising process is working and what actions, if any, the Commission should take to fulfill Congress’s directive that franchising authorities not grant exclusive franchises or unreasonably refuse to award additional competitive franchises.
"I plan on the Commission considering this item at our November meeting, which is just a few days away," Martin said, referring to the Commission's November 3 meeting.
The USTA conference this year was filled with various rah-rah sessions and pre-scripted commercials for telco TV. Clearing away the regulatory barriers to the rollout of new video service is obviously high atop the agenda of the USTA and its member companies.
Video is thought by many here to be the linch pin of the triple-play bundles with which telephone companies hope to tempt consumers in the next five years. Many of their cable company competitors are already well into the process of provisioning such services.
So the telephone companies have some catching up to do. That's why great efforts are being made publicly and privately to clear away the local-level franchising requirements that now stand in the way of the telcos in 49 U.S. states.
Texas is the exception. The state recently passed contentious legislation to create a statewide franchise, which bypasses much of the franchising authority and control of individual localities. (See Telcos Close In on TX Video Win.) Cable companies in the state, meanwhile, remain bound by the rules of existing franchise agreements, until those franchises expire.
Martin's 20-minute address, which he appeared to read from a tele-prompter, also touched on universal service and inter-carrier compensation. A short Q&A session followed, with USTA president Walter McCormick floating a few polite questions Martin’s way. Martin, who was visibly tired, could not appear in person at the event because his wife is expecting a baby, the USTA says.
The Commission's deliberations over the pending mergers of AT&T Corp. (NYSE: T) and SBC, and MCI Inc. (Nasdaq: MCIP) and Verizon are said to be coming to a head this week as well.
— Mark Sullivan, Reporter, Light Reading