[Infowarrior] - Divided FCC Approves New Cable Rules

[Richard Forno]

Divided FCC Approves New Cable Rules
http://www.washingtonpost.com/wp-dyn/content/article/2006/12/20/AR2006122000
779.html
By JOHN DUNBAR
The Associated Press
Wednesday, December 20, 2006; 6:29 PM

WASHINGTON -- A sharply divided Federal Communications Commission voted 3-2
along partisan lines Wednesday to impose new measures meant to ensure that
local governments do not block new competitors from entering the cable
television market.

The vote came on the same day that FCC Chairman Kevin Martin released a
report on cable prices that shows in 2004, average cable rates rose 5.2
percent. The report also shows that from 1995 to 2005 rates increased a
total of 93 percent.

Wednesday's meeting was unusually rancorous with Democratic Commissioner
Jonathan Adelstein challenging FCC staff on the assertion that localities
are blocking access and Martin departing from what is usually a carefully
scripted meeting to defend the measure.

The new rules approved by the commission will require local cable
franchising authorities to act on applications from competitors with access
to local rights of way within 90 days, and to act within six months on
applications from other new competitors.

The FCC will also ban local governments from forcing new competitors to
build out new systems more quickly than the incumbent carrier and to count
certain costs required of new carriers to go toward the 5 percent franchise
fee they are required to pay.

Adelstein and fellow Democrat Michael Copps harshly criticized the measure,
questioning the agency's evidence that there are barriers to entry by
competitors. They also expressed concern over the loss of local control by
franchise authorities and were unconvinced that the FCC has the legal
authority to impose the new rules.

The cable pricing survey, the first released in 22 months, showed that
competition from direct broadcast satellite competitors like DirecTV has
little if any effect on cable prices, while in areas where there are
wireline competitors, such as municipal cable providers and overbuilders
like RCN Corp., rates were 17 percent lower.

Kyle McSlarrow, president and CEO of the National Cable & Telecommunications
Association, called the pricing survey "obsolete" because it failed to
account for the "favorable impact" of bundling services on pricing and "the
greatly increased value of cable services in a digital world.

Telecommunications companies Verizon Communications Inc. and AT&T Inc. have
been lobbying aggressively to make it easier to obtain local franchises as
each company sinks billions of dollars into its networks in order to deliver
video programming.

Verizon cheered the move. Company senior vice president for regulatory
affairs Susanne Guyer said "the FCC is standing up for consumers who are
tired of skyrocketing cable bills and want greater choice in service
providers and programming."

The approval came despite a warning from the incoming chairman of the House
Energy and Commerce Committee questioning whether the FCC has the legal
authority to issue the new rules.

In a letter dated Tuesday, Rep. John Dingell, D-Mich., wrote, "It would be
extremely inappropriate for the Federal Communications Commission to take
action that would exceed the agency's authority and usurp congressional
prerogative to reform the cable television and local franchising process."

The vote failed to win the support of Consumers Union, the nonprofit
publisher of Consumer Reports magazine.

Jeannine Kenney, senior policy analyst with the group, said that unless
consumers receive assurances from the FCC and the phone companies that cable
rates will decline once the new competitors enter a market, "the FCC's
decision may do more harm than good."

Critics have also expressed concern that the new entrants may not offer
service in lower-income areas.

Joining Martin in approving the measure were fellow Republicans Deborah
Taylor-Tate and Robert McDowell.

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On the Net:

Federal Communications Commission: http://www.fcc.gov