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3/6/2007
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FCC Makes It Easier For Telcos To Offer TV Services

The new rules will trim the authority of municipalities and states in awarding new licenses to provide video services and are aimed at speeding up the deployment of fiber-based cable TV.

Voting along partisan lines, the three Republican FCC commissioners Monday approved new rules that will help telephone companies enter cable TV markets. The move triggered praise from telephone companies AT&T and Verizon Communications and scorn from consumer groups.

The new rules will trim the authority of municipalities and states in awarding new licenses to provide video services and are aimed at speeding up the deployment of fiber-based cable TV.

FCC chairman Kevin J. Martin hailed the new rules as promoting competition and helping to spread broadband technology.

"Greater competition in the market for the delivery for multichannel video programming is a primary and long-standing goal of federal communications policy," Martin said in a statement. "Telephone companies are investing billions of dollars to upgrade their networks to provide video. As new providers began actively seeking entry into video markets, we began to hear that some local authorities were making the process of getting franchises unreasonably difficult."

Martin noted that rates of existing cable providers have jumped 93% from 1995 to 2005. "Since 1996 the prices of every other communications service have declined while cable rates have risen year after year after year," he added.

AT&T and Verizon, faced with cable companies poaching their traditional telephone service, have begun deploying fiber-based cable to offices and residences in their territories. They also petitioned the FCC to streamline procedures that would let them roll out their services faster.

Verizon praised Martin for leading the FCC "to a breakthrough for consumers." Verizon Telecom's chief marketing officer, Marilyn O'Connell, continued: "This decision removes obstacles to the continued aggressive rollout of our all-fiber-optic network and our FiOS TV service. It means that we will be able to reach our goal of rapidly expanding the number of consumers who have a choice of video service providers."

The two Democrats on the FCC opposed the new rules, however. Commissioner Jonathan Adelstein says he expects to subscribe to Verizon's FiOS, but he criticized the new rules as having been "rushed through with little consultation." He predicts the rules will offend many in Congress and suggested the courts would reject the new rules.

Adelstein also argues that the rules were "legislation disguised as regulation" and, as such, will invite the judiciary to overturn the rules. "The sum total here," he said in a statement, "is an arrogant case of federal power riding roughshod over local governments."

The new rules evoked opposition from a variety of consumer organizations. Andrew Jay Schwartzman, president of the Media Access Project, says the FCC decision will destroy local control over cable TV access.

Jeannine Kenney, senior policy analyst at the Consumers Union, says: "The FCC has managed to craft a policy that is unfriendly to consumers. This order ties the hands of local authorities to protect their most vulnerable constituencies."

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