FCC Investigating Video Franchise Rules
The FCC on Thursday unanimously voted to begin an investigation into local video franchise rules, and to decide if some municipalities may be unreasonably delaying the availability of new video services -- such as Verizon's FiOS TV -- by refusing to award franchises to applicants.
The commission will now seek comment from the public on the matter through a Notice of Proposed Rule Making. Telephone companies say that the franchise process is more difficult than it should be, takes too long and some municipalities are making unreasonable demands.
"We are pleased that the FCC's examination of local cable franchising will include existing operators as well as new entrants, which is consistent with our philosophy that communications regulation should treat like services alike," Kyle McSlarrow, president of the National Cable & Telecommunications Association, said in a statement.
Telcos like Verizon say that cable companies are preventing competition by using provisions within the law to delay new services. Examples of tactics include public hearings and even suits against elected officials who grant the new franchises.
On average, receiving a new video franchise agreement can take up to two years, depending on the municipality.
"A finding that local franchise agreements harm competition in the market for video services could largely eliminate the need for thousands of local franchise agreements, themselves legacies of the early days of cable television regulation," said Braden Cox, technology counsel for the Competitive Enterprise Institute.
The telephone companies argue that competition is not only necessary, but also beneficial to the consumer as it puts more pressure on cable companies to lower prices. In the last five years alone, cable rates have soared 40 percent in many localities.
"It is the Commission's responsibility to remove unreasonable roadblocks to competition," FCC chairman Kevin Martin wrote in a statement. "Through the proceeding we commence today, we seek to ensure that local authorities are not thwarting competition by unreasonably refusing to award additional competitive franchises."