Federal Legislation Aims to Expand TV Offerings

Published October 1, 2005

The U.S. Senate is considering legislation that would remove government-created barriers critics say drive up the cost of cable television and keep technological improvements out of the hands of ordinary Americans.

Senate Bill 1504, the Broadband Investment and Consumer Choice Act, aims to modernize U.S. telecommunications law by reforming the local franchising process that makes it difficult for new providers to compete with local cable television companies. The legislation seeks to promote growth and competition among all technologies, allowing consumers to choose their cable provider.

Internet, telephone, and possibly even power companies are waiting in the wings to offer television programming with new technologies able to compete with cable. If current franchise laws are not reformed, those new players will be effectively shut out of the market, according to Sen. John Ensign (R-NV). Ensign is a cosponsor of S. 1504, with Sens. John McCain (R-AZ) and Trent Lott (R-MS).

“It is time to restore America’s status as a leader in the field of global communication technology and to improve burdensome and outdated government regulations for the benefit of consumers nationwide,” Ensign said. “Americans’ ingenuity and creativity can provide more choices for consumers if government bureaucrats will get out of the way and allow our companies to compete.”

Additional Legislation

The Video Choice Act of 2005, introduced by Sens. Gordon Smith (R-OR) and Jay Rockefeller (D-WV) and Reps. Marsha Blackburn (R-TN) and Albert Wynn (D-MD), also would allow consumers to choose their cable supplier.

“American consumers are paying higher television service rates today because of the hoops we require new providers to jump through,” Blackburn said. “We need to bring these outdated regulations into the twenty-first century. You cannot expect the current system to meet the expectations of modern consumers who are used to choice and competition in virtually every area of daily life.”

Wynn added, “The Video Choice Act would provide consumers with a much-needed option for television service. I am confident this bill would promote competition and lower prices for consumers by allowing alternative television service providers the opportunity to widely offer their services.”

The Video Choice Act has bipartisan support, but some interest groups oppose it. The U.S. Conference of Mayors, for example, doesn’t like the idea of new businesses “entering the video market to provide video service without obtaining local franchise agreements.”

Sharing the mayors’ concern is the Michigan Municipal League. The league has asked members to send Congress a letter saying they oppose the legislation because “it will deprive us of badly needed funds that are currently part of our municipal budget.”

Better Service, Prices, Choices

While some municipal politicians would lose the power to decide from whom their constituents can buy pay TV–and the cash benefits that accrue to such power through direct and hidden taxes–pro-consumer groups side with the bipartisan coalition in Congress.

Former U.S. House Majority Leader Dick Armey, co-chairman of FreedomWorks, a nonpartisan free-market think tank and lobbying group, said, “For too long, consumers have been denied the benefits of real cable competition: more choices, lower prices, and better service. It’s time to allow competition and put the consumer in the driver’s seat.”

Max Pappas ([email protected]) is director of policy at FreedomWorks.