Compromise Video Passage in ‘06 Seen Unlikely

“This is a bill that’s going to have to come up again for consideration next year,” said American Cable Assn. Pres. Matt Polka. An 11th hour, year-end deal is a possibility, but such moves usually mean “stripped down” legislation, he told us. A bare-bones approach is unlikely to appease cable operators or Bells, seen by analysts as standing to gain the most in both House and Senate legislation. HR-5252, which Bells hail for its lack of video system buildout mandates, would let telcos seek a national franchise, end-running local govt. approval.

Hurdles to compromise include gaps between the 2 bills, with Stevens’ more ambitious than the House’s, an industry official said. Differences with gridlock potential include a universal service provision in Stevens’ bill, said the source. Other “controversial” parts include network neutrality, Medley Global Advisors analyst Jessica Zufolo wrote.

House Commerce Chmn. Barton (R-Tex.) is ready to address the knots, the knottiest of which may be universal service, NARUC lobbyist Brian Adkins said: “Barton would likely come to a conference expecting to negotiate on that and other provisions.” It will take time for such meetings to occur, he said: “Senate Commerce still has a lot of work to do on USF, as well as putting its own stamp on video franchising.”

Stevens will unveil his revised telecom draft today (Mon.), with a hearing set for Tues. Markup is set for June 20. That timing might keep Senate Majority Leader Frist (R- Tenn.) from letting it onto the floor, said an industry source. “Telecommunications bills are notoriously hard to get through,” said cable consultant Steve Effros, former pres. Cable & Telecom Assn. “I certainly don’t think it’s going to make it through the Senate with precisely the same language.”

Rural Telecoms Hail Gutknecht Amendment

Among the “most interesting… amendments from an investor perspective” is one by Rep. Gutknecht (R-Minn.) that seeks to preserve regulatory authority over VoIP providers, said analysts at Stifel Nicolaus. The amendment, heartily praised by rural telecom, would clarify that VoIP providers aren’t exempt from FCC or state regulatory mandates to pay into the universal service fund or to “pay appropriate compensation for the transmission of a VoIP service over the facilities and equipment of another provider.” The measure doesn’t appear to require regulators to impose such charges on VoIP providers, but makes clear they have that authority. The amendment could affect the intercarrier compensation debate if interpreted as giving state regulators “authority to preserve intrastate access charges despite proposals to harmonize various federal and state intercarrier compensation fees,” the Stifel Nicolaus report said.

The amendment would ensure “rural America is included” in video technology development by “adequately compensating” telecoms for their investments, said TDS Telecom, which runs rural and suburban phone systems. The National Telecom Co-op Assn. (NTCA) said the measure “represents a huge step toward ensuring the economic viability of rural communities.”

NTCA said it also likes a measure that would let national franchise holders use shared headends, which “substantially reduces the initial investment for small video providers.” The Alliance for Public Technology singled out a provision that it said would ensure “that VoIP services will be accessible to people with disabilities.”

The Bells predictably praised the bill’s provisions on franchising, with BellSouth predicting the legislation would “allow faster rollout of a video service that can provide another competitive alternative to cable.” Verizon said “the size of the bipartisan vote increases the momentum for a similar Senate bill. “The benefits of competition -- more choice, better services and lower prices -- are now within reach this year,” Verizon said. Qwest said the bill’s lack of buildout requirements was particularly welcome, since it is so spread out, with 1/2 the territory of the U.S. in its region.