Dingell questions FCC on TV franchises

[Associated Press]

The incoming chairman of the House Energy and Commerce Committee is questioning whether the Federal Communications Commission has the legal authority to issue rules that would make it easier for competitors to enter the cable television business.

The commission was scheduled to vote on the issue Wednesday morning, but the meeting was delayed because FCC staff were still working on some agenda items.

In a letter, Rep. John Dingell, D-Mich., wrote, "It would be extremely inappropriate for the Federal Communications Commission to take action that would exceed the agency's authority and usurp congressional prerogative to reform the cable television and local franchising process."

He cited parts of the FCC's plan, cribbed from speeches by FCC Chairman Kevin Martin and media reports, and asked the chairman to provide "statutory and legal citations" for the proposed changes.

He set a date of Jan. 3 for a response.

Martin is expected to recommend that local franchising authorities, usually city and county governments, be required to act on franchising applications from competitors with access to rights-of-way -- like phone companies -- within 90 days.

Martin has also said he would act on rules regarding franchise fees, so-called "build out" requirements and other issues.

In public comments, Martin has said that local franchising authorities "obstruct and in some cases completely derail" new attempts to bring video competition to an area.

Martin had been expected to release a price study on cable rates at the meeting.

According to a lobbyist with knowledge of the pricing report who asked not to be identified because the report is not yet public, it will show that for calendar 2004, rates for basic and expanded cable, which accounts for about 84 percent of subscribers, rose 5.2 percent.

The price survey is also expected to show that competition from direct broadcast satellite competitors like DirecTV has little if any effect on cable prices, while in areas where there are wireline competitors, like municipal cable providers and overbuilders like RCN, rates are 17 percent lower.

Critics of Martin's initiative say that in addition to potentially exceeding the agency's authority, an order from the FCC on cable franchising could hurt consumers by removing local oversight.

Critics also claim there are no guarantees that new competitors, like Verizon Communications Inc., which has spent billions rewiring its telecommunications system to offer video services, will result in lower prices for consumers.

article originally published at http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=AP&Date=2006....

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