House aims to hobble cable monopolies

Analysis:

This article was about the recent passage of house bill 5252, the Communications Opportunity, Promotion and Enhancement Act, which is a telecommunications bill aimed at changing the way that phone and cable companies negotiate franchise fees for use of public right of ways. The headline “House aims to hobble cable monopolies” infers that this legislation would break up or limit the existing large cable companies. This is not exactly an accurate depiction. The legislation was actually supported by the major cable and telephone companies, so it seems unlikely that they would support something designed to “hobble” them. The article reports that the bill would “encourage telephone companies and others to enter video markets by scrapping the time consuming system in which prospective providers must negotiate with every locality.” The article is framed around the idea that increased competition will lead to more variety and lower costs for consumers. The bill sponsor, Representative Joe Barton is noted saying that because of the impediments created by the local franchise system, the United States doesn’t even rank in the top ten in broadband deployment. This claim that the local franchise system stymies broadband deployment is not subjected to any scrutiny in the article. In fact, the article does not quote anyone critical of the legislation until the last sentence when it quotes a democratic congressman who predicts that telephone companies would ignore poorer areas or charge higher rates to rural areas. Nobody from consumer advocacy or media reform organizations are quoted in this piece.

According to Marc Cooper of the Consumer Federation of America, “This legislation slams the door on any meaningful video competition and opens a wide window to anti-competitive discrimination over broadband networks,” “The House turned an opportunity to foster vibrant competition in both video and Internet services into a major give-away to giant telephone and cable companies who’ve demonstrated for decades that they’ll use their market power to shut out competition whenever they can. This legislation gives them even greater ability to do so.” The organization Free Press points out that HR 5252 “eliminates existing local requirements that incumbent cable providers continue to offer cable service to all consumers in a community, allowing cable companies to withdraw cable service or refuse to upgrade service to the households they currently serve.” So certainly, there are serious critics to this legislation but the article in the Grand Rapids Press failed to address these voices.

The issue of net neutrality was also addressed in this article, although it was seriously under reported. The article merely stated that the house was divided on the issue of “net neutrality” and that “the bill gives the FCC authority to enforce net neutrality principles and set fines.” According to the grassroots organization “save the internet”, this legislation removes the longstanding notion of net neutrality and instead opens the door for Internet service providers to control net surfers access to websites or affect download speeds as the ISP sees fit, essentially removing the “level playing field” that has characterized the world wide web up to this point.

Story:

By JIM ABRAMS
Associated Press

WASHINGTON — Monopolies in many cable TV markets could end under House-passed legislation that supporters said would increase competition and drive down prices.

The far-reaching telecommunications legislation, passed 321-101 Thursday night, would encourage telephone companies and others to enter video markets by scrapping the time-consuming system where prospective providers must negotiate individually with every locality.

“This legislation can increase competition not only for cable services, but also unleash a race for who can supply the fastest, most sophisticated broadband connections that will provide video, voice and data services,” said House Energy and Commerce Committee Chairman Joe Barton, R-Texas.

Barton noted that because of the impediments created by the local franchising system, the United States doesn’t even rank in the top 10 worldwide in broadband deployment. “This bill should change that statistic,” he said.

The issue now moves to the Senate, where the Senate Commerce, Science and Transportation Committee is to vote on its version of the bill later this month.

“We urge Senate to act soon because every year reform is delayed costs Americans more than $8 billion in their cable bills,” said Peter Davidson, Verizon senior vice president for federal government relations.

While there was wide agreement on the principle of increasing competition, the House was divided over the issue of “net neutrality,” or how to ensure that telephone, cable and other Internet providers don’t discriminate against competitors or users by limiting access or charging higher fees.

The Barton bill gives the Federal Communications Commission authority to enforce net neutrality principles and set fines of up to $500,000 for violations.

Democratic opponents also said the measure did too little to ensure that broadband services would be extended to lower income and rural areas.

Markey predicted that telephone companies would open services in wealthy communities, providing competition for services and lower prices but that it would ignore poorer areas that would be stuck with high prices.

Text from the original article ommitted from the Grand Rapids Press version:

Many Democrats, backed by a diverse lobby of content providers such as Google Inc. and Microsoft Corp., and users ranging from religious broadcasters to liberal bloggers, said this wasn’t enough to maintain the Internet’s freewheeling openness.

Rep. Edward Markey, D-Mass., offered an amendment stating that broadband network providers must not discriminate against or interfere with users’ ability to access or offer lawful content. Opponents argued that it would create government regulations controlling the Internet and make it more difficult for service providers to invest in new high-speed technology. It was defeated 269-152.

“Tilting the cost burden onto end users, which would be the inevitable result of neutrality regulations, will only delay much-needed broadband deployment,” said Mike McCurry, co-chair of Hands off the Internet, a coalition of telephone, business and small government groups.

The White House said in a statement that it supported the bill and its language on video franchising. But on net neutrality, the administration said the FCC has the power to address potential abuses.

“Creating a new legislative framework for regulation in this area is premature,” the statement said.

…..

Rep. Bobby Rush, D-Ill., a black lawmaker from Chicago’s South Side and a co-sponsor of the legislation, disputed that. “I’m from the other side of town,” he said. “This is a bill that will make a difference in the lives of the people on the other side of town.”

“This bill is about cable rates and what we know today is that cable rates are too high in America,” said Rep. Albert Wynn, D-Md., another member of the Congressional Black Caucus.

Rep. Fred Upton, R-Mich, who heads the telecommunications subcommittee, estimated that people could save $30 to $40 each month if given a choice in video services.