April 6, 2006

US House panel backs help for telcos on TV service

By Jeremy Pelofsky

WASHINGTON (Reuters) - Legislation designed to help
telephone companies such as AT&T Inc. and Verizon
Communications roll out subscription television service faster
won approval from a U.S. House of Representatives panel on

The House Energy and Commerce subcommittee on
telecommunications and the Internet voted 27-4 to allow
companies to apply for a nationwide license to offer video
service, instead of the current process in which they must
negotiate with thousands of cities for individual licenses.

AT&T and Verizon, the two largest U.S. telephone carriers,
are expanding into subscription television service and have
complained it would take them years to get the necessary
licenses, making it harder to compete against cable companies.

The future of the legislation was unclear because of the
short legislative session this year, as well as because of
divisions among lawmakers, network providers and Internet
content companies.

Democrats offered numerous amendments, including provisions
aimed at preventing Internet service providers from favoring
certain content over others and require new video providers to
build out their service to ensure poor areas are not left out.

Most were defeated by the Republicans who have a majority
on the panel, including the Internet neutrality amendment. But
lawmakers approved by voice vote a provision requiring high-
speed Internet providers to sell the service without tying it
with voice or other products.

The bill would also empower the Federal Communications
Commission to enforce its principles that call on Internet
service providers to permit consumers unfettered Internet
access and allow them to run any Internet-based applications.


AT&T and Verizon have pledged that consumers would be able
to surf anywhere they want on the Internet, but also want to
offer private Internet-based services that offer faster
download speeds for products such as movies.

"The principles are vague and unenforceable," said Rep.
Edward Markey, the top Democrat on the panel. "The FCC
principles do not encompass the nondiscriminatory protections
that the Internet has always had and desperately needs in order
to ensure its continued vibrance."

The amendment failed by a vote of 23-8, with several
Democrats voting against it and one Republican voting yes.

"It is my view that the pipe owner should not decide what
the (Internet) content is and the speed of that content into my
home," said Rep. Heather Wilson, a New Mexico Republican.

Content companies, such as Amazon.com Inc., fear network
providers such as AT&T and Verizon would use those private
networks to favor their own services or partners over rivals,
leaving the public a narrower Internet pipe.

"I don't think the dire predictions that are discussed by
them are necessarily realistic," said Rep. Charles Bass, a New
Hampshire Republican.

The subcommittee did agree to add a provision to the bill
that would permit the FCC to impose fines of up to $500,000 for
violating its principles.

The measure would also permit local authorities to collect
up to 5 percent of gross revenue from cable services and the
bill's sponsors said state and local authority over public
rights-of-way would be preserved.

The panel also turned aside an attempt to limit foreign
ownership of licenses for subscription television service.