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Municipal Organization Defends Local Franchise AgreementsLeague of Cities says deregulating the television franchise process at the local level would stymie competition and create havoc with municipalities’ infrastructures. By Ted Glanzer It turns out that cable providers aren’t the only entities that object to telecommunication companies’ lobbying federal lawmakers to knock down local legal barriers so they can launch their IP-based television programming. A national organization that represents 18,000 cities and towns said in a June 9 letter addressed to several Congressional leaders that deregulating the franchise process at the local level would actually stymie competition and would create havoc with municipalities’ infrastructures. “In short, nationalizing franchising would limit the benefits of head-to-head video competition to a chosen few and would cause chaos in our streets across the country,” wrote Donald J. Borut, executive director of the National League of Cities (NLC). The franchising process, Borut said, allows cities and towns to maintain public safety by providing them with the authority over physical rights of way. By removing such authority, Borut said, deregulation would cause more harm than good in the long run. “While citizens want better programming at lower prices, they do not want potholes in their roads, water main breaks, and traffic jams during rush hour as a consequence,” Borut said. Furthermore, local franchising preserves, rather than hinders, competition, Borut said. “Individual providers have no incentive to ensure that their equipment leaves room for the new entrant of tomorrow or does not interfere with their competitors’ infrastructure,” Borut said. The controversy at issue arises out of Title VI of the Communications Act, which codified the established practice that, with limited exceptions, a cable provider must obtain a local franchise from the municipality in which it serves. The franchise agreement most often requires that the cable service must be available to every neighborhood in the community regardless of income level or economic conditions. Telecoms such as Verizon and SBC, who are investing billions of dollars to launch their local residential IP-based video services, argue that obtaining individual franchise agreements is a lengthy and costly process that hampers their ability to compete with cable companies. While SBC has taken the position that its planned IP-based video service is not subject to local regulations because it uses the Internet, Verizon is traveling down the local franchising road in its effort to rollout its FiOS TV service. To date, the telecom has obtained just six agreements out of a possible 10,000. Nevertheless, Borut said that the telecoms' concerns over obtaining franchise agreements were unfounded. “Allegations that local permission is difficult to acquire are not accurate,” Borut said. “The franchising process is open and quick for those companies that do not seek to use the process to cherry pick who they will serve or obtain a regulatory advantage over their competitors. Cities stand by their obligation to ensure all similar services are treated the same.” The NLC letter comes on the heels of comments from several federal officials, such as U.S. Sen. Ted Stevens (R – AL), who said that they were sympathetic to the telecoms’ plight. Also, FCC Chairman Kevin Martin said in a speech at Supercomm 2005 in Chicago that he would generally like to “level the playing field” for service providers. Stevens’ position is particularly relevant because he is the chairman of the Senate’s Commerce Committee and has sketched out a plan to rewrite of the Telecommunications Act of 1996. Nevertheless, NLC’s efforts won’t end with the letter sent to Congress. Indeed, officials from NLC member municipalities will converge on Anchorage on June 16-18 to discuss Stevens’ proposal, the importance of protecting public rights of way, the ability of cities to provide broadband connections for their residents and businesses and the upcoming rewrite of the Telecommunications Act. “The federal government should use a deliberative process in reviewing communications law,” said Ken Fellman, mayor of Arvada, Colo., and chair of NLC’s information technology and communications steering committee. “Local franchise authority, local police powers, and public interest obligations deserve protection. The federal government should facilitate local efforts to promote competition, public safety, and appropriate management of public property.” The policy recommendations developed at the meetings will be refined in the fall and presented to the full NLC membership for consideration and adoption in December. These policies form the basis for lobbying and advocacy in Congress and the administration. “Although the local franchising system protects important goals, this does not mean it cannot be streamlined,” Borut said. “Local government stands ready to engage with Congress as it considers changes and reforms to the existing system consistent with our mutual goals of promoting competition for all our citizens.” Stay tuned (bad pun intended). Ted Glanzer is assistant editor for TMCnet. |