July 28, 2005 Washington, DC -- Republican U.S. Senator John Ensign of Nevada has introduced legislation that would eliminate the need for cable, telephone company, and other pay-TV providers to obtain local or state franchises, reports Lightwave Associate Editor Matt Vincent.
Ensign, who chairs the Senate Commerce Committee's technology subcommittee, unveiled his "Broadband Consumer Choice Act of 2005" at a Capitol Hill press conference on Wednesday. Republican Senator John McCain of Arizona, the former chairman of the Senate Commerce Committee, is co-sponsoring the bill.
According to published reports, the bill would also eliminate existing cable franchises. The proposed legislation also outlines federal consumer protection standards and guarantees the right of local governments to collect franchise fees up to 5% of gross video revenues. The bill would maintain current requirements for video providers to carry public access channels and carry local broadcasters' signals. Also, under the bill, vertically integrated pay-TV distributors' video content would be made available to other distributors "on fair and equal terms." However, the bill would prohibit exclusive contracts for sports programming, regardless of whether programming rights are controlled by such distributors.
According to wire sources, the bill is aimed at accelerating telephone companies' entry into the video sector without incurring the cable industry's opposition. The legislation drew endorsements from the National Cable & Telecommunications Association, the U.S. Telecom Association, and the Consumer Electronics Association. According to a published report, Ensign said yesterday at a Capital Hill news conference that the proposed legislation would preserve certain restrictions on phone and cable companies, including consumer safeguards and government oversight of basic-service rates. The bill is the first of several broad proposals expected in Congress seeking to overhaul the telecommunications law of 1996. Major telephone carriers have complained that the 1996 law is outdated and precludes them from effectively competing with less-regulated cable companies.
Provisions of the 1996 law that the new bill seeks to erase include state and federal oversight over phone-service pricing and terms, and statutes requiring that phone companies share their copper-wire networks with competitors. Also, according to published reports, aspects of the bill championed by Verizon and SBC Communications include eliminating a requirement that new TV-service providers obtain licenses from state and local governments.
The legislation does not currently address ongoing contributions to the Universal Service Fund, which subsidizes phone service in rural areas of the country.
-- Matt Vincent