Barton-Rush Franchise Bill Heads for U.S. House Floor

Published May 1, 2006

A draft bill that would create a national video franchising structure was expected to reach the floor of the House of Representatives by the end of April. The bill, untitled at press time, was heading into mark-up April 4.

Aimed at speeding competition for cable TV-like services in cities and communities across the country, the bill would permit new video entrants to apply to the Federal Communications Commission for certification, bypassing what often is a time-consuming process of city-by-city negotiation. Such a franchise would be effective 30 days after filing.

The bill preserves franchise-type payments to local governments, instituting a standard fee of 5 percent of gross video revenues. The bill also calls for an additional payment of 1 percent of gross video revenues to support public, educational, and government (PEG) channels. Service providers must still comply with local right-of-way authorities and national consumer protection rules.

The national franchise option would be available to new entrants and any incumbent providers who face head-to-head competition from another terrestrial-based service provider. Cable TV providers who do not have local land-based competition cannot apply. Likewise, if a competitor exits a local market leaving just one service provider, franchise control reverts to the local authority.

The draft bill, now co-sponsored by Reps. Joe Barton (R-TX) and Bobby Rush (D-IL), is descended from the earlier so-called “Binary Information Transmission Services” (BITS) I and II bills that originally had bi-partisan support. John Dingell (D-MI), ranking Democrat on the House Telecommunications Subcommittee, was an original co-sponsor but withdrew his support reportedly over the bill’s network neutrality provisions.

As written, the new bill would give the FCC jurisdiction over questions of Internet access and blocking of services, but it would not pre-empt service providers from creating tiered quality-of-service pricing for applications providers who use large amounts of bandwidth.

In early April Telecom Subcommittee Chairman Fred Upton (R-MI) said he expects the bill to have cleared mark-up and been taken up by the full House Committee of Energy and Commerce following the Easter break. House watchers said the bill could reach the floor by late April or early May.

In addition to the franchise fee formula and net neutrality provisions the bill prohibits “redlining” on the basis of income and gives the FCC the power, in the face of a violation, to ensure that the provider extends service to that group.

The bill would require the FCC to set rules to ensure that all two-way VoIP services enable 911 and E-911 capabilities. In addition, the bill would require those entities that own or control “necessary E-911 infrastructure” to provide access to it at “just and reasonable, nondiscriminatory rates, terms, and conditions as determined by the Commission.”

The bill also would give VoIP providers “rights, duties, and obligations as a requesting telecommunications carrier under section 251 of the Communications Act with respect to interconnection.”

The bill would prohibit any law that would prevent public providers from offering telecom, information, or cable services, so long as the public provider does not receive preferential treatment in connection with applicable rules, regulations, or ordinances.

Steven Titch ([email protected]) is senior fellow for IT and telecom policy at The Heartland Institute and managing editor of IT&T News.