Policy

Comcast: SBC Can’t Skip Cable Franchise

4/20/2005 10:36 AM Eastern

A senior Comcast Corp. official, testifying Wednesday on Capitol Hill, said SBC Communications Inc. should not be allowed to escape cable-franchising requirements simply based on the Baby Bell’s announced deployment of an interactive Internet-protocol-video network.

“They should be treated like the cable companies. Whatever rules apply to us should apply to them, too,” Comcast executive vice president David Cohen said.

The fact that SBC calls its multichannel pay-television service IP video did not release SBC from traditional, noneconomic cable regulations, he added.

“The law should not treat them differently based on whether they use a lot of IP, a little IP or no IP at all. Like services should be treated alike, and everybody should play by the same rules,” Cohen said.

Cohen appeared before the House Subcommittee on Telecommunications and the Internet, a panel that plans to overhaul the Telecommunications Act of 1996 and remove regulatory distinctions between cable and phone companies that provide voice, video and data services over the same platform.

SBC senior VP Lea Ann Champion said cable regulation was inappropriate because SBC’s IP network, dubbed Project Lightspeed, was interactive and offered a consumer experience vastly different from the one currently provided by Comcast and other incumbent cable operators.

“In sort, we are not building a cable network. Nor do we have any interest in being a cable company offering traditional cable services,” Champion said. “New entrants should not be saddled with the legacy regulations applicable to incumbent providers.”

Comcast, Cohen said, was open to discussing a comprehensive review of the cable-regulatory regime because rules currently in place were adopted at a time when cable had little multichannel competition.

“We think the level of competition today justifies elimination of many of the requirements [in federal cable law] for all providers,” Cohen said, later voicing support for removing the local approval process.

Verizon Communications retail-markets-group president Robert E. Ingalls said that although his company is seeking cable franchises, it wants Congress to enact a “streamlined national franchise” to eliminate uncertainty and delay caused by negotiations with thousands of local communities.

“Regulatory issues … are affecting how soon we will enter the video market on a wide scale,” Ingalls said. “We need a national broadband policy that does not shoehorn new technologies into old categories.”

Rep. Edward Markey (D-Mass.) was critical of SBC’s IP-video-deployment plans, claiming that the company was targeting affluent customers and ignoring low-income families in the initial phase.

“You have Lightspeed for the well-off and ‘Snailspeed’ for everybody else,” Markey said.

Champion said SBC’s program -- a $4 billion investment over four years to reach 18 million households -- was a rational business plan that would allow it to build momentum in the market.

“We have announced the most aggressive buildout of any company,” she said. “We want to bring consumers choice.”

September