Jerry Brito

On franchising, who needs Congress?

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It looks as if now that national cable franchise reform is dead in Congress, the FCC is moving forward with its proceeding on the issue. According to USA Today, “Federal Communications Commission Chairman Kevin Martin has proposed rules to make it easier for phone companies and others to jump into the video business.” According to the newspaper’s sources, the new rule would require localities to rule within 90 days on competitive franchise applications by phone companies and others with existing access to public rights-of-way. In a new article in the Journal on Telecommunications & High Technology Law (and a public interest comment), Jerry Ellig and I tell the FCC not only that they should preempt unreasonable local franchise practices, but how they can do so. One of the points we make is that while requiring localities to act expeditiously in making franchise rulings, that’s just a start. The FCC also has the power to curb unreasonable denials of franchises.

In our paper we calculate the cost of franchising to consumers, and it looks like the FCC has such costs in mind. According to the USAT article, “Martin is using the FCC’s upcoming annual report on cable TV prices as ammunition. FCC officials say the report shows that satellite TV and cable TV operators have settled into a cozy duopoly, keeping prices in a steady, upward climb. It shows the average price of cable TV in 2005 was $43.33 a month. Where satellite TV also was available, the average was $43.34. But in markets with another “wired” video provider, the price was dramatically less: $35.94. The upshot: Absent credible land-based rivals, cable TV prices will keep going up.”

Cross-posted at TLF. You can leave and read comments there. →

Dec 4, 2006 | Comments | Tags: cable, congress, franchising