Ensign Telecom Bill Eliminates Franchising Requirements

“Changes in technology necessitate that we update these rules,” Ensign told reporters at a press briefing. “We're still regulating these companies based on ancient history instead of recognizing the realities of the marketplace,” Ensign said. “This legislation addresses these concerns, “ he said. Ensign, who said he was in daily contact with Stevens during the bill’s drafting, said he expects it will be a “discussion” point moving forward with more co-sponsors signing on.

Sen. McCain (R-Ariz.), the first to join Ensign’s bill as co-sponsor, called it “an excellent step toward deregulating the industry.” He said he disagrees with the legislation’s bidding process for municipal broadband investment, favoring instead letting municipalities their own networks. But he said the bill provides the right deregulatory framework. A spokesman for Sen. Stevens said he looks forward to studying the bill but won’t comment on the legislation until he has studied it. The committee is expected to tackle telecom update legislation when it returns from the Aug. recess, which begins Aug. 1. No decisions have been made on the shape of telecom legislation -- whether there will be a single bill or separate bills on distinct areas. DTV will be handled first after the recess, with tentative plans for a Sept. 8 markup.

Sen. Kerry (D-Mass.) told reporters Wed. it is “quite possible” he will introduce his own version of a comprehensive telecom update bill. He said he is reviewing the Ensign bill, describing it as “"pretty broad"” in approach. But Kerry said he sees common ground between his vision for legislation and the Ensign bill. “We're going to have to work through this,” he said. “We'll see whether we can sit down.”

Ensign’s bill, the “Broadband Investment and Consumer Choice Act,” would exempt services and service providers from Titles I, II and VI of the Communications Act of 1934 in most instances. State or local laws would no longer be subject to those titles. Provisions of the Communications Act to remain in force include: Enforcement, procedural and administrative provisions, Communications Assistance for Law Enforcement Act (CALEA) requirements, bars on obscene material, pole attachment rules, telephone solicitation and access for the disabled, including the hearing and speech impaired.

Municipal govts. wanting to invest in broadband networks would have to offer a 90-day bidding process open to private businesses. Govts. would have to advertise the scope of the communications service to be provided, including cost, terms, services, coverage area, architecture and detailed accounting of accommodations govt.-owned communications services would enjoy such as rights-of-way, preferential tax treatment, bonds and land. Under the bill, preference would go to non-govt. entities when bids are identical. If a govt. wins a bid, a private provider would have the future right to put facilities in the same location under the same terms given the govt.

Private companies should be given the “right of first refusal” to handle the business because they can do it more efficiently than local govts., Ensign said. “Many are looking for controversy on the issue of municipal networks,” he said. “These policies are very reasonable,” he said. They encourage new investment in communities that may be underserved, “but it is my firm belief that govt. cannot innovate nearly as quickly as the private sector.” The bill also protects govts. from freezing out private business or giving themselves more sweeter deals, which would hamper competition and cause higher prices for consumers.

Industry Reaction Mixed

Cable and telecom industries generally welcomed the Ensign bill as a good starting point for telecom reform. NCTA Pres. Kyle McSlarrow said there cable wants to work on specific provisions, but called the bill an “important and constructive step forward.” Ensign said he worked closely with cable on the bill, addressing a number of industry concerns about franchising. “I don’t expect them to oppose the bill,” he said.

SBC, Verizon and USTelecom, formerly USTA, which would get a big uplift from the bill’s abolition of franchising requirements, praised the bill’s shift to market-based competition and away from govt.-regulated markets. “This will provide much needed clarity as SBC invests in next-generation broadband service to bring consumers more choice and innovative service options, such as IP-based TV,” said Tim McCone, SBC senior vp-federal relations. The National Telecom Cooperative Assn. (NTCA) and Consumer Electronics Assn., also support the bill.

But CompTel called the Ensign bill a “gigantic step backward,” claiming it would mean fewer choices for consumers. In a statement CompTel Pres. Earl Comstock said his CLEC members are disappointed with the bill and look forward to working with Ensign to rewrite it. “Overall, it would remonopolize communications networks resulting in fewer choices, less innovation and higher prices for consumers,” Comstock said. “Nascent technologies, such as VoIP, would be killed in the cradle under this regime because entrepreneurs would be denied the nondiscriminatory access to infrastructure they need to deliver their cutting-edge products and services,” Comstock said.