Policy

Senate Democratic Staff Float Franchise Bill

5/24/2006 3:11 PM Eastern

A telephone company could get a local cable franchise within 30 days if it agreed to the terms and conditions of the franchise most recently granted to the market's cable incumbent, according to a draft bill prepared by staff to Senate Commerce Committee Democrats.

The bill, designed to update the Telecommunications Act of 1996, would phase in franchisewide buildout requirements on phone companies and impose Internet-nondiscrimination mandates on broadband-access providers. It would also bar cable operators under many conditions from withholding programming not delivered via satellite.

A copy of the 94-page bill was obtained by Multichannel News Wednesday.

Under the bill, a phone company unwilling to sign the incumbent's franchise agreement could negotiate different terms with local regulators during a 60-day window.

If those talks failed, the phone company would be allowed to enter the video market within 30 days under "standard franchise" -- a default mechanism that includes a 5% franchise fee and other conditions specified in the bill.

Cable incumbents can escape their local franchises and obtain a standard franchise after another video provider with a standard franchise offers service to more than 5% of homes in the same franchise area.

The net-neutrality provisions track terms in a Senate bill introduced last Friday by Sens. Olympia Snowe (R-Maine), Byron Dorgan (D-N.D.) and Daniel Inouye (D-Hawaii): no blocking or degrading of Internet traffic and no demands for payment for the prioritization of unaffiliated Web content, data, and applications.

The bill would alter program-access laws. Cable operators that terrestrially distribute program networks that they owned would be required to sell the programming to competing pay TV distributors.

A cable company that distributes national sports programming could withhold the programming from a competing distributor that itself has exclusive rights to distribute national sports programming.

In real-world terms, the sports exemption means Comcast Corp. would not have to sell Comcast SportsNet Philadelphia to DirecTV Inc. because DirecTV has exclusive rights to NFL Sunday Ticket, the National Football League’s out-of-market package. But it would likely mean that Comcast would have to sell the regional sports network to EchoStar Communications Corp.

The bill defines national sports programming as any "live broadcast event" involving professional football, baseball and hockey, as well NCAA contests. The Federal Communications Commission could expand the list of national sports organizations.

September