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State Laws/Franchising

Dingell Quizzes AT&T on Franchise Law

3/29/2006 5:30 AM Eastern

Rep. John Dingell (D-Mich.) is questioning whether AT&T Inc. needs a federal video-franchising law when the company is insisting that its Project Lightspeed video service relies on a technology exempt from all traditional cable rules, including local franchising.

Dingell, the top Democrat on the House Energy and Commerce Committee, expressed his concerns in a letter Wednesday to AT&T chairman and CEO Edward Whitacre. Dingell is expected to attend a House subcommittee hearing Thursday on the franchising bill.

“Serious questions remain in my mind as to whether AT&T will be able to receive the benefits of such sought-after legislation,” said Dingell, who asked to receive detailed responses by Monday.

Legislation backed by Energy and Commerce chairman Joe Barton (R-Texas) would award national video franchises to phone companies that agree to provide “cable service.”

Before state and federal agencies, AT&T has staked out a position that because its Internet-protocol-TV service isn’t a cable service within the meaning of federal law, it did not have to sign contracts with local government to compete with cable incumbents.

In his letter, Dingell indicated that he would be troubled if AT&T felt that the terms of the Barton bill would not apply to the company.

“It is unclear why it makes sense for the committee on Energy and Commerce to consider legislation to streamline the cable-franchise process when companies can define themselves out of the process,” Dingell said.

He indicated that all the ambiguities could be resolved if the Barton bill were amended to say that IPTV is a cable service under federal law.

“The committee clearly needs to receive information sufficient to evaluate whether the Communications Act definitions should be updated so that companies that offer IP-video services can benefit from the national cable franchising,” Dingell said.

When Barton unveiled his bill Monday, AT&T issued a statement that made no reference to a possible dispute over the classification of IPTV.

“The bill strikes the right note of accelerating video choice for consumers, while upholding the legitimate and important roles of local governments, such as maintaining their rights of way, preserving community-access programming and ensuring that localities will not lose needed revenue,” said Tim McKone, AT&T executive vice president of federal relations.

The cable-service issue is broader than franchising: AT&T could also claim that IPTV is exempt from an assortment of cable regulations, including must-carry, retransmission consent, program access and ownership limits.

“We will review Congressman Dingell’s letter and respond to him by the date requested,” AT&T said in a prepared statement.

“The fundamental issue is whether or not consumers can get meaningful video choice sooner rather than later,” the company added. “And AT&T has been absolutely clear in support of a legal framework that promotes speedy introduction of new services for consumers. The Barton-Rush bill strikes the right balance to bring consumers video choice and new services, while ensuring continuation of important and legitimate local interests, such as maintaining rights of way management.”

September