House Clears National Video-Franchise Bill

House Clears National-Franchise Bill
Net-Neutrality Rejection Hurts Senate Chances
By Ted Hearn
6/12/2006


Washington— The U.S. House of Representatives passed a bill last Thursday designed to speed phone-company entry into video markets after rejecting language that would have barred broadband-access providers from discriminating among suppliers of voice, video and content services delivered over the Internet.

The bill (H.R. 5252), sponsored by Energy and Commerce Committee chairman Joe Barton (R-Texas), passed by a vote of 321-101. Lawmakers hopeful that phone-company competition spurred on by the measure would drive down cable rates across the country.

The debate on overhauling major telecommunications law shifts to the Senate, where the Senate Commerce Committee is scheduled to vote on parallel legislation June 20 if a consensus can be achieved.

“Consumers won a major victory with tonight’s passage of the video-choice bill. The size of the bipartisan vote increases the momentum for a similar Senate bill,” said Peter Davidson, senior vice president of federal government relations for Verizon Communications Inc.

But Blair Levin, a media and telecommunications analyst at Stifel Nicolaus Associates, told clients that Senate passage would be hard because lawmakers have not reached agreement on key issues, including Internet nondiscrimination.

“The next leg of the journey promises to be tougher, as senators struggle to agree on a basic approach, and there’s not much time left this session for typical Senate wrangling,” Levin said.

WHITE HOUSE STAND
For the first time, the White House took a stand as the Office of Management Budget issued a statement “strongly” endorsing the Barton bill’s national cable-franchising provisions.

“The administration believes that legislation enabling video-service providers to gain a national franchise in order to speed rollout of their infrastructure not only will benefit consumers by increasing competition in the video-TV market, but also will improve high-speed broadband penetration,” the OMB statement said.

Rep. Edward Markey (D-Mass.) offered an amendment that would have banned discriminatory conduct by cable, phone and other broadband-access providers against companies such as Google Inc., Yahoo! Inc. and eBay Inc. Markey’s amendment would have prohibited network owners from blocking of unaffiliated Web-based services and from demanding fees in exchange for priority treatment of Internet-based services.

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