FCC to consider video franchise issue

FCC Chairman Kevin Martin is living up to the promise he made to Telecom ’05 attendees in Las Vegas last week. The FCC today issued a notice of proposed rulemaking concerning its possible jurisdiction over video franchises. The move could speed the process of creating a national video franchise, something telephone companies are craving and cable companies will fight, but it is still uncertain whether the FCC can take on this responsibility.

By making it possible for telcos to avoid the city-by-city franchising process, the FCC would very quickly enable them to deliver competing video services, as soon as they have the technology in place. This works particularly in the favor of Verizon, which is building fiber-to-the-home networks in communities throughout its local franchise region, and SBC Communications, which will begin offering IPTV over its fiber-to-the-node networks in 2006.

Those two companies successfully fought to get the state of Texas to approve a statewide franchise process earlier this fall, although the cable industry is fighting that in court.

The FCC is likely to face opposition from the cable industry and other sources. The National League of Cities immediately weighed in on today’s announcement, indicating its opposition.

“We view with concern any future FCC action to limit local involvement beyond its statutory authority,” said Ken Fellman, the Arvada, Colo., mayor who is chairman of the NLC’s Information Technology and Communications Policy and Advocacy Committee, in a prepared statement. “Local elected leaders will continue to participate actively in the national debate regarding video competition to ensure they remain able to protect the interests of local citizens.”

In addition, the NLC maintains that federal law gives municipal governments the authority to negotiate and enter into franchise agreements with video service providers, since they are in the best position to negotiate agreements that affect local streets and sidewalks and other local consumer issues.

Congressional action on a national video franchise is also a possibility. The telecom reform bill introduced into the U.S. Senate by Sen. John Ensign (R-Nev.) would introduce national video franchises as well.