House Leaders Push TelcoTV Bill Sans Retrans Reform
March 31, 2006
Joe Barton, chairman of the House Commerce Committee, laid odds of 2-to-1 that the president will sign a telecom reform bill this year. He didn't say which telecom bill, but he did say that an amendment to reform retransmission consent wouldn't be a part of it.
"There's a vote-getting problem," Barton said. "It won't pass in full committee. I think that amendment would have real tough sledding."
Retrans consent has come under renewed attack recently in Washington, with Rep. Nathan Deal (R-Ga.) emerging as a point man for reform. Deal reportedly planned to tack an amendment onto the telecom bill prohibiting broadcasters from negotiating carriage for their cable networks under retrans consent. Organizations representing broadcasters in 37 states responded with decided opposition in a letter to the committee.
"We urge you to reject Congressman Deal's proposal, which would gut Congress' intent in the Cable Act, turning back the clock to the bad old days when cable operators simply took broadcasters' signals and profited from them without ever compensating broadcasters," it said.
The drive to unbundle carriage for broadcast-owned cable nets from retrans may dwindle as more broadcasters go after cash deals. CBS, now divorced from Viacom, no longer has to push the latest version of MTV in retrans negations. The network just cut a cash-for-content deal with Verizon on the telco's budding FiOS network.
The most recent draft telecom bill would allow Verizon and the rest of the Bells to obtain sweeping national franchise agreements rather than having to deal individually with some 40,000 municipalities. It would also give incumbent cable operators the same deal instead of making them wait until telcos penetrate 15 percent of a given market. The 15-percent proposal was floating around the House before the draft bill hit daylight, and cable lobby chief Kyle McSlarrow went after it tooth and nail. He also successfully averted a proposal that would have left cable at a pricing disadvantage to telcos.
McSlarrow said the released draft "represented considerable progress," but that he'd also like to see telephony included in the bill, and 'Net neutrality bumped out of it.
We continue to believe that the better course is for the government to resist injecting itself into a thriving, dynamic market where investment and innovation are flourishing," McSlarrow said in a statement.
The 'Net neutrality clause in the bill purports to give the FCC the power to enforce its own definition of the concept, but it also implicitly prohibits the commission from doing a rulemaking.
"Once they define what 'Net neutrality is... and they haven't done that yet, we give them the authority to adjudicate on a case-by-case basis on whatever Net neutrality is. Before we get too far down the road, I want to let the market sort itself out. I know there are congressmen who don't know what the term is," Barton said.
Rep. Ed Markey (D-Mass.) criticized the draft for limiting FCC authority on 'Net neutrality, and for not preventing telcos from building out in only the wealthiest neighborhoods. The draft does has a provision that prohibits denial of access to service based on income, but Markey and others were not convinced of its efficacy.
"By failing to include a build-out provision to ensure service area parity between a Bell company entering a franchise area and the incumbent cable operator, it allows a national franchisee to use public rights-of-way in a community but serve only select neighborhoods within the community," Markey said.
Lillian Rodriguez-Lopez, president of the Hispanic Federation, said "any franchising reform legislation must contain provisions that guarantee us a reasonable and equitable deployment in Hispanic communities." Rodriguez-Lopez was one of several witnesses who testified before the House Internet subcommittee during a hearing on the draft bill.
Rep. Hilda Solis (D-Calif.) expressed likewise concern over potential redlining, as did a representative who testified on behalf of several consumer groups.
"Rather than provide for meaningful protections to ensure that large cable and telecommunications companies don't use their network ownership to impede competition, the bill strips the Federal Communications Commission of its authority to establish meaningful rules to protect consumers from these discriminatory practices," said Jeannine Kenney, senior policy analyst for Consumers Union, who testified on behalf of Consumer Federation of America and Free Press.