Barton-Upton Letter May Speed FCC Cable Franchise Revamp
Odds of an FCC cable franchise order arriving this year rose with Chmn. Martin under pressure from top Republicans on the House Commerce Committee (CD April 25 p10), said industry and FCC officials. In a Tues. letter, Reps. Barton (R-Tex.) and Upton (R-Mich.) asked Martin to put cable operators under video rules imposed on telcos in March. In that rulemaking, the FCC said it would issue an order in 6 months on when and whether cable operators can get the same local franchise authority (LFA) deregulation as Bells. Before Barton and Upton wrote, some on the 8th floor and in industry doubted that 6-month timeframe, saying cable franchising isn’t a priority for Martin, who might be reluctant to act while an LFA appeal continues.
Sign up for a free preview to unlock the rest of this article
Communications Daily is required reading for senior executives at top telecom corporations, law firms, lobbying organizations, associations and government agencies (including the FCC). Join them today!
The Barton-Upton letter changes the calculus, according to industry and FCC officials, who disagree on the extent of Martin’s malleability. Some said Martin is significantly more likely to meet his own informal 6-month deadline; others questioned how much the congressmen can sway him. Officials we spoke with agreed that the letter increases, if only a little, chances that a cable franchise order will be issued by Sept. Cable is itching to have the franchise deregulation Bells got, which includes a limit on public access channel and other fees that LFAs can charge video providers. Verizon wants cable operators to wait until existing franchises expire (CD April 24 p2), as FCC “tentatively” decided.
Cable deserves the deregulation granted telcos, Barton and Upton wrote: “Video franchise reform… did not extend the same deregulation to existing cable operators, handicapping them as compared to their competitors until consideration of the issue in an item still scheduled for the future. Our hope is that you address that issue shortly.” The letter reflects House Republicans’ general desire for deregulation, said Medley Global Advisors analyst Jessica Zufolo. “The real test comes” when the Democratic House Commerce Committee leadership “asserts its views on the cable part of the issue,” she said: “That will give us a clearer picture of the pressure that will be put on the Commission. At this point the Democrats have kept their powder dry on this issue… The letter definitely raises the awareness level.”
“The letter raises the stakes for the Commission to get the order done on time,” a communications lawyer said: “Even if they meet the deadline, the critical question is when cable would get relief: Now or years from now.” Some commissioners favor letting cable operators change existing franchise contracts to reflect the new rules even before they expire, said an FCC official. Comr. McDowell, for instance, supports putting Bells under the same franchise rules as cable operators, said FCC officials. McDowell seems not to have decided whether cable operators should be able to void existing LFA contracts, said an official. The cable order’s timing depends on how soon Martin and other commissioners can reach agreement, one official said.
Don’t expect a cable franchise order much before Sept., Zufolo said, adding that higher Commission priorities include the 700 MHz auction, forbearance requests and a USF revamp. “The Commission clearly has its hands full between now and September on a variety of issues,” she said: “I would err on the side of the Commission taking the full 6 months.”
Regardless of timing, cable operators won’t be affected much by franchise reform because telco TV rules don’t require LFAs to vary significantly from common practice, a 2nd communications lawyer said: “They clarified some things, but I don’t think they changed any of the rules or laws… You kind of have to take into account if they granted it tomorrow, what would be the significance of it?” - Jonathan Make