On Wednesday, December 20, 2006 the Federal Communications Commission ruled 3-2 along partisan lines that telephone companies seeking to enter the pay-TV market will not be bound by the same regulations as the cable companies. While the telcos claim that the ruling will lead to better services, more choices and lower prices, local municipalities will be restricted in their ability to negotiate franchise agreements that provide for public access channels and institutional networks or require extending service to all houses. Also, the length of negotiations between municipalities and telcos will be limited to six months for new applicants or 90 days for companies with existing ties to the municipality.

The hasty FCC ruling provides much of what the telcos sought from the C.O.P.E. bill which had stalled in Congress over the issue of network neutrality. U.S. Representative Edward J. Markey (D-MA), Ranking Democrat of the House Subcommittee on Telecommunications and the Internet, has said he will review the decision when the new Congress convenes Jan. 4. The following comment was posted on his website yesterday:

“While the FCC’s action today represents an early Christmas present for the Bell telephone utilities, it is like a lump of coal for many communities around the country.

“Today’s decision comes on the heels of a year-long legislative battle in Congress on the same set of franchising-related subjects. I fully support providing consumers with additional marketplace choices for cable service but I believe competition must be promoted in a way that also respects the important values of localism and universal service. Although Congress failed to enact any of the franchising-related proposals sought by the Bell telephone utilities into law this year, I am concerned that the FCC has acted today at the behest of the same utilities to adopt similar policies.

“Overall, I believe the haste with which the Commission has acted may lead to problematic and unintended consequences. In some instances, the Commission may be acting without clear legal authority and in others, by promulgating rules without a consistent, balanced policy for all marketplace participants. Finally, efforts in communities across the country to bolster localism through public access channels and to utilize institutional networks for important municipal functions may be put in jeopardy by novel interpretations of the Cable Act which undermine the financial basis for such services.

“I look forward to reviewing today’s decision and examining its implications for consumers, communities, and competition next year.”

See also:
FCC adopts relief for telecom companies planning TV offerings