DRIVE A HARD BARGAIN

The telephone companies are now asking Congress to change the decades-old rules that give local governments control over video franchises. Many of their arguments are just plain common sense — technology has changed, the market has changed, the world has changed since those rules were put into place. Forcing a company to go municipality by municipality to acquire the rights to deliver competitive video services is a method guaranteed to stymie competition and hurt consumers.

The problem is that simply wiping out the local franchise process for telcos only makes little sense. And throwing out the system for both cable and telephone companies is a huge shift that could create problems at the local level that are not easily solved.

Cable companies argue that it's unfair to allow telcos into video under different rules than cable had to endure while ignoring the fact that the largest of the telcos — the former Bells — have been forced to live under federal and state rules that never applied to cable. Looking back isn't the answer — looking forward is.

The bottom line in all this is that a new regulatory regime must be created that takes into account both legacy regulation and the new technology and market realities. One priority of such a regime should be ubiquitous broadband — something politicians at all levels are constantly promoting but never providing.

The time to negotiate new rules for broadband deployment is when there is something on the table, and the video franchise issue is just such a prize.

There are multiple potential approaches to this problem, which can include Universal Service Fund reform and codified freedoms for municipalities to operate broadband networks-of-last-resort. The idea, though, is to strike while the video service revenue iron is just heating up.