Report: Congress weighs national cable franchise for telcos

Congressional lawmakers are reportedly drafting legislation that would award a national cable television franchise to local telecom carriers while leaving cable companies to contend with current local franchising restrictions.

Multichannel News today reported that House Energy and Commerce Committee chairman Joe Barton (R-Texas), Telecommunications and the Internet Subcommittee chairman Fred Upton (R-Mich.), and Reps. Chip Pickering (R-Miss.), John Dingell (D-Mich.) and Edward Markey (D-Mass.), have all agreed in principle to back the new franchising rules, which would allow companies like AT&T and other national carriers to expand their TV services throughout the country without restriction until they receive 15% local television penetration. Sen. Ted Stevens (R-Alaska) also plans on introducing similar legislation in the Senate, Multichannel News said.

The proposed legislation would be an enormous boon for AT&T, which has been expanding its local reach across the country by putting the Bell system back together. After being acquired by SBC, which contains the remnants of Southwestern Bell, Ameritech and Pacific Telesis, last year, AT&T last week announced plans to acquire BellSouth, giving it local exchange networks spanning the nation from California to the Carolinas and from Michigan to Texas. But the proposed rules also would deliver a big hit to cable. While cable multi-system operators like Comcast and Time Warner have been expanding at just as rapid a clip as the telcos, they've ultimately faced ownership restrictions that have prevented them from becoming truly national operators.

A spokesman for the House Commerce Committee could not confirm the report, but said the committee is definitely drafting broad telecom legislation that includes the franchising issue. "The chairman is still in negotiations and no decisions have been made," the spokesman said.