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from: USA Today

FCC hopes to speed phone companies' entry into TV

By Leslie Cauley, USA TODAY

NEW YORK — Trying to spur competition and beat back cable TV prices, Federal Communications Commission Chairman Kevin Martin has proposed rules to make it easier for phone companies and others to jump into the video business.
The proposed order aims to streamline the video franchise approval process, FCC officials said. They declined to be named because the order has not been formally adopted. The other four FCC commissioners are reviewing it.

Martin is using the FCC's upcoming annual report on cable TV prices as ammunition. FCC officials say the report shows that satellite TV and cable TV operators have settled into a cozy duopoly, keeping prices in a steady, upward climb. It shows the average price of cable TV in 2005 was $43.33 a month. Where satellite TV also was available, the average was $43.34. But in markets with another "wired" video provider, the price was dramatically less: $35.94.

The upshot: Absent credible land-based rivals, cable TV prices will keep going up.

From 1995 to 2005, the survey shows, cable TV prices shot up 93%. The cable TV industry has blamed rising programming costs. But that does not explain the big difference in places with a second wired provider, one FCC official noted.

AT&T and Verizon are building advanced broadband networks so they can sell bundles of TV, voice, wireless and high-speed Internet services. But deployment of their video has been slow, in part because of the franchising process. There are thousands of local authorities, each with its own rules.

The proposed order would require the bodies to rule within 90 days on applications by phone companies and others with existing access to public rights-of-way. For others, it would be six months.

The order would also make it harder for localities to impose "unreasonable" requirements. In one case, the FCC says, a video provider was asked to build a recreation center and swimming pool. In another, a video applicant was asked to fork over $1 million and fund a $50,000 scholarship with annual contributions.

AT&T and Verizon have been trying to persuade lawmakers to pass a national franchising bill and pushing states to adopt statewide franchising laws.

So far, Congress has declined to take action. A number of states, including Texas, California and New Jersey, have passed statewide bills. But that leaves thousands of franchising bodies to contend with.

The result: More than two years after entering the TV business, Verizon has only about 300 franchise agreements. AT&T, which rolled out video in July, has around 24.