SBC asks FCC to exempt video service from franchising
By Brian Blackstone
MarketWatch
Last Update: 6:27 PM ET Sept. 14, 2005
http://www.marketwatch.com/news/print_story.asp?print=1&guid={9D7499F7-6FD7-4907-A56E-D22C9C900064}&siteid=mktw
WASHINGTON (MarketWatch) -- SBC Communications Inc. (SBC) on Wednesday
asked the Federal Communications Commission to exempt its video service
from cable franchising requirements, arguing that its Internet-based
service shouldn't be subject to certain rules governing cable.
"This integrated suite of (Internet protocol)-enabled services cannot
properly be viewed as a traditional 'cable service,'" SBC said in a filing
with the FCC as part of the agency's 18-month-old Internet services
proceeding.
Wednesday's filing is the first time SBC has formally asked the FCC to free
it from franchise requirements, though the company has long insisted they
don't apply.
SBC said it is spending $5 billion to deploy a video offering to 18 million
customers within three years. Those customers encompass 2,000 different
franchise areas.
"Under normal conditions, the negotiation of each of these franchises can
be protracted, taking at least several months to more than a year, thus
inevitably making region-wide entry a long-term process," SBC said.
And a video product is needed "in order to justify the significant
investment associated with these new networks," the filing stated.
The company has no doubt been buoyed by recent comments from FCC Chairman
Kevin Martin. In an interview with USA Today last month, Martin stated that
he had asked FCC staff "to explore what the commission can do to ensure
that local authorities are not unreasonably refusing to award additional
competitive licenses."
FCC action would probably be the quickest path for SBC on the franchise
issue, though any decision by the FCC would probably be litigated.
Congressional action would lower litigation risk, and there's some Capitol
Hill support for SBC's position.
Sen. John Ensign, R-Nev., in July introduced legislation that would
eliminate state and local franchising requirements. In June, Senate
Commerce Committee Chairman Ted Stevens, R-Alaska, said a "national
solution" may be needed on the franchise issue.
But legislation could take time. Analysts at Legg Mason Wood Walker Inc.
pointed out in a research note this week that "we suspect the (franchise
exemption) effort will become entangled in a broader congressional rewrite
(of telecom laws), which will likely take time."
Even more pressing telecom issues like the digital television transition,
which faces a budgetary deadline, have largely been sidelined for the near
term as Congress focuses its attention on the aftermath of Hurricane Katrina.
Though SBC wants the regulatory clarity of a federal franchising rule, a
company spokesman said that it will move ahead with its video offering even
in the absence of congressional or FCC relief.
A spokesman for the National Cable & Telecommunications Association, which
represents the cable industry, didn't immediately return a call seeking
comment on SBC's petition.
In a June speech, NCTA Chief Executive Kyle McSlarrow said, "The government
must avoid picking winners and losers by imposing regulation based on the
particular mix of technology a video provider deploys."
================================
George Antunes, Political Science Dept
University of Houston; Houston, TX 77204
Voice: 713-743-3923 Fax: 713-743-3927
antunes at uh dot edu
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