FCC Rules in Favor of Telephone Companies
The Federal Communications Commission ruled along party lines on Wednesday to severely limit local governments’ ability to regulate their cable markets. The decision will allow telephone companies greater freedom to compete with cable by offering television services, but Democrats on the panel cautioned that the FCC had overstepped its mandate.
The new rule reflects the intensifying battle between the phone and cable industries over who will control distribution of video, voice and Internet access in an increasingly wired country. But the telephone industry’s victory could prove temporary because opponents say the measure will almost certainly be challenged in court.
The FCC voted 3 to 2 along party lines to change how local officials award television franchises to eliminate what Republican supporters said were unreasonable demands and delays.
The measure requires local regulators to rule on franchise applications within 90 days for companies such as Verizon Communications and AT&T that have wires in place. It also bars local officials from requiring that companies provide TV service to everyone in a jurisdiction and prevents them from demanding fees or in-kind contributions exceeding 5 percent of the television revenues.
But the commission’s Democrats warned that the FCC, by exceeding its legal mandate, would face time-consuming challenges from opponents, including cable companies and local officials angered by what they say is a preemption of their authority.
“The end result will likely be litigation, confusion of the process and a certain amount of chaos,” Commissioner Jonathan S. Adelstein said. He questioned the claim that local officials have unreasonably refused applications, saying the FCC had not cited a single instance in which a franchise was being unduly delayed or held up because of demands for exorbitant fees or concessions.
“The majority simply accepts in every case that the big phone companies are right and the local governments are wrong,” Adelstein said.