US House and Senate lawmakers yesterday unveiled two measures designed to make it easier for telephone companies to launch video services to compete with cable and satellite services.
The measures would eliminate the need for companies like Verizon Communications and SBC Communications to seek authority from towns and cities to offer their video services, a process they have called cumbersome.
Cable operators and telephone companies have been encroaching on each other`s turf, battling to offer consumers a suite of communications and entertainment services. Such packages are often lucrative to the providers` bottom line.
But SBC and Verizon, which are spending billions of dollars to launch their video services, have said their efforts to compete against cable operators are being slowed by having to get approval from every municipality.
"I am confident that this bill would promote competition and lower prices for consumers by allowing alternative television service providers the opportunity to widely offer their services," said Rep Albert Wynn, a Maryland Democrat who co-authored the House measure.
The measures introduced yesterday were mostly similar and offered by Senator Gordon Smith, an Oregon Republican, Senator John Rockefeller, a West Virginia Democrat, Rep Marsha Blackburn, a Tennessee Republican, and Wynn.
The bills would also bar providers from denying service to potential customers based on their income. Cable operators and some lawmakers have accused SBC and Verizon of targeting wealthier customers and ignoring poorer areas.
The measures would permit cities and towns to seek so-called franchise fees from the new entrants. Verizon and SBC have diverged over their willingness to pay those fees, which cable operators already pay and can be up to 5% of gross revenue.
SBC has said it does not need franchise authority and is willing to make some limited payments to cities, while Verizon has been trying to negotiate agreements and has expressed a willingness to pay the necessary fees.
"SBC is committed to bringing video competition to consumers, and these bills clearly reflect Congress` intent to promote competition for consumers," said Tim McKone, SBC senior VP for federal relations.
Additional legislation addressing that issue and others is expected to be offered by leaders of the House and Senate Commerce committees later this summer.
Republican Federal Communications commissioner Kathleen Abernathy said earlier yesterday the FCC could also become involved in the fight between cable and telephone companies over franchise requirements for video services.
"Today, all of the debates are taking place at the states," Abernathy said. "There are some legal arguments that under the statutes we may have the ability to pre-empt the states. But no one has filed a request asking us to do that."
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