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The Video-Franchising Plot Thickens
by Michael Martinez
Last week's introduction of House draft language to establish a national video-franchising system was not well-received in municipal circles.
The federal proposal -- authored by Energy and Commerce Committee Chairman Joe Barton, R-Texas, and Democratic panel member Bobby Rush of Illinois -- would let companies seeking to enter the video market to sidestep local regulators by applying for national franchises. The Bell telecommunications companies say the process of negotiating separate agreements with localities has slowed their entry into the market and denied consumers their services.
The future is still cloudy for federal telecom legislation, but the most recent events in Congress have reshaped the franchising debate among state and local lawmakers throughout the country.
A Growing List Of Grievances
Local governments and groups that represent them still are preparing their strategies to combat the House draft language. But there might not be much time left for municipalities to defend their interests at the federal level.
Ken Fellman, the mayor of Arvada, Colo., said municipal groups will lobby hard to restore localism to the measure. He testified last week on behalf of various groups, including the National Association of Counties, National League of Cities and U.S. Conference of Mayors, at a House Energy and Commerce subcommittee hearing on the draft bill.
Fellman said the proposal would impose little or no enforcement on matters that should be addressed locally. He contends that a federal bill should allow more local oversight in settling disputes over video companies' access to public rights-of-way for deploying infrastructure. He also said local governments should have more ability to condition franchises on access to public, educational and governmental channels, among other matters.
The FCC would be overburdened if it is held responsible for handling regulatory responsibilities that currently are core functions of local governments, Fellman argued.
But the most troubling aspect of the bill to him is the absence of "build out" requirements for new video entrants. Cable companies typically must offer service to entire areas in order to win franchises, but the House draft would not impose those same rules on newcomers. According to Fellman, it is counterintuitive to craft a measure with the goal of giving consumers more choices but then not include any incentives for companies to bring deliver their services.
"The lack of a build-out requirement in this statute is a pretty blatant admission that not everyone is going to see the benefit of competition," Fellman said.
Even some state lawmakers who advocate streamlined franchising oppose that aspect of the bill. New Jersey Assemblyman Joseph Vas, who has co-sponsored a statewide franchising measure, said a federal measure will not fly without build-out rules. "There has to be a plan to make sure that consumers have access to the new choices that will be made available to them," Vas said.
Neil Lehto, an attorney who represents municipalities in Michigan and Ohio, said imposing national franchising standards for public, educational and governmental channels also would be problematic. "This one-size-fits-all approach ignores the uniqueness of communities and their needs," he said.
Moving Targets And Short Schedules
After franchising bills were signed into law in Indiana and Virginia earlier this year, industry experts and telecom lobbyists predicted that Missouri would become the next major battleground state. But now that prospects have dimmed in the Show Me State, phone advocates are starting to look elsewhere as legislatures finish spring sessions.
Missouri Sen. John Griesheimer, the sponsor of his state's franchising bill, said he expects his proposal to die on the floor Monday. The measure, S.B. 816, won committee approval and appeared to have enough momentum to clear the entire chamber last month. But Griesheimer said that the majority of his colleagues now support the cable industry on the franchising issue and are likely to kill his bill this week.
Phone and "cable choice" advocates had mounted an aggressive campaign for statewide franchising in Missouri. FreedomWorks, an advocacy group funded partly by the Bells, sent its chairman, former U.S. House Majority Leader Dick Armey, R-Texas, to St. Louis in mid-March to lobby for the passage of the bill.
But Greg Harrison, president of the Missouri Cable Telecommunications Association, said lawmakers are changing their tune on the bill because they have invested time in examining exactly what it would entail. According to Harrison, a number of lawmakers have expressed specific concerns about the impact on municipal governments and schools.
Harrison also said he and other cable advocates repeatedly have warned lawmakers of the potential for a federal law to usurp any new state statute. He added that the latest U.S. House draft "looks like it might be the start of a fair bill." Griesheimer also praised that measure but doubts the ability of Congress to establish nationwide franchising rules.
Rob Jordan, FreedomWorks' director of federal and state campaigns, said Florida is likely to become the next franchising war zone. The House Telecommunications and Utilities Committee passed a bill, H.B. 1199, last week.
The sponsor, state Rep. Anthony Traviesa, said he hopes his bill benefits from the momentum video franchising has gathered on the federal level, but lawmakers in Florida have little time to act before their session ends in a few weeks. "The sense of urgency is definitely one of my biggest sources of frustration," he said.
The Regulatory Nightmare To Come?
Concern about the implications of a nationwide franchising system is swelling in states with franchising laws already in place. Tim Oakes, the executive director of the Indiana Cable Telecommunications Association, said national franchises would be a regulatory nightmare.
"You can foresee a situation where a neighborhood could have three different providers operating under three separate franchising agreements," Oakes said. "So much of this is being done on faith. It's ridiculous."
But state Sen. Brandt Hershman, one of the key players in Indiana's recent franchising battle, said he would embrace a federal statute because it would further streamline the process. He said he would welcome any federal action that would give Indiana consumers more choices.
"I would hope that they look at the substance of the debate that took place here and craft something that mirrors our law," Hershman said. "I wouldn't like to see a federal bill that is anything less of what we've already accomplished."
But according to Oakes, federal lawmakers are not paying close enough attention to states with new franchising rules. "At the federal level, this is supposed to be a more deliberate process," Oakes said. "But you see lawmakers in Congress who clearly don't seem to understand the issue as well they should at this point. And these people are buying into the smokescreen that local franchising processes are an impediment."
Hershman said federal election-year demands should prompt state lawmakers to act with more urgency to pass their own statutes -- especially because there are no guarantees as to what a final federal bill will look like after House and Senate negotiations.
"At a certain point you have to ask yourself if a federal bill has enough momentum to go through," he said. "Our bill changed significantly over the course of the debate. You have to take that into account, too."
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