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Congress seen not easing TV rules for telecoms

The chances are seen as slim that the U.S. Congress will pass legislation in 2006 to make it easier for companies like Verizon Communications to offer subscription television service despite intense lobbying.
/ Source: Reuters

The chances are seen as slim that the U.S. Congress will pass legislation in 2006 to make it easier for companies like Verizon Communications to offer subscription television service despite intense lobbying.

The U.S. House of Representatives and Senate are working on bills that would simplify the process for new companies to enter the video market, but they are part of larger bills to speed deployment of high-speed Internet service, or broadband.

Local authorities typically require cable television providers to be licensed before they can offer service, called franchising, and often includes paying compensation to cities.

Verizon and AT&T Inc., the two largest U.S. telephone companies, are rolling out television service but argue obtaining permission from thousands of local jurisdictions takes too long.

So as they face stiff competition from cable companies like Comcast Corp. in the telephone and broadband business, the telephone carriers are seeking franchise relief in state legislatures and from Congress.

The Senate Commerce Committee on Tuesday plans to examine the system, but Congress is working on a short schedule because many lawmakers are running for reelection in November. And the complicated nature of communications issues often makes it difficult for lawmakers to reach consensus quickly.

"Congress wants to promote Bell (telephone companies) entry into video and is considering franchise relief, but we believe legislation is unlikely before mid-2007," according to a Stanford Washington Research Group report last week.

Analysts at Stifel Nicolaus, which also watches the issue, said in their own report this month that "unless dynamics change, congressional relief (is) an uphill fight this year, making state, local battles more critical."

A senior Verizon executive last week suggested Congress consider an alternative -- approving a bill that just makes getting franchises easier, instead of a broader broadband bill that could get bogged down.

"The bottom line is we're anxious for movement," said Tom Tauke, Verizon executive vice president for public affairs policy and communications. "We are looking for a way to move through the video franchising process with some ease."

He did acknowledge that it may be difficult for legislation to pass this year.

"It's tough, I don't disagree that this is a challenge," Tauke said. "Given the short time available and also the commitment, my sense is we need to suggest to Congress that they focus on what's doable now."

However, that idea was rebuffed by a spokesman for the House Energy and Commerce Committee, through which any communications legislation must pass.

"Clearly we think it's premature to talk about separating portions of the broadband bill," said panel spokesman Terry Lane. "The chairman is committed to working on comprehensive broadband regulatory reform."

At the end of 2005, Verizon had received about 50 local franchise licenses and were in negotiations in some 400 other communities, Tauke said.

Texas has passed legislation that allows companies to apply for a statewide franchise and other states, including Virginia and New Jersey, are considering similar measures.