Thursday, April 06, 2006

House panel backs help for telcos on TV service

House panel backs help for telcos on TV service
Jeremy Pelofsky

WASHINGTON (Reuters) - Legislation designed to help telephone companies such as AT&T Inc. and Verizon Communications roll out subscription television service faster won approval from a U.S. House of Representatives panel on Wednesday.

The House Energy and Commerce subcommittee on telecommunications and the Internet voted 27-4 to allow companies to apply for a nationwide license to offer video service, instead of the current process in which they must negotiate with thousands of cities for individual licenses.

AT&T and Verizon, the two largest U.S. telephone carriers, are expanding into subscription television service and have complained it would take them years to get the necessary licenses, making it harder to compete against cable companies.

The future of the legislation was unclear because of the short legislative session this year, as well as because of divisions among lawmakers, network providers and Internet content companies.

Democrats offered numerous amendments, including provisions aimed at preventing Internet service providers from favoring certain content over others and require new video providers to build out their service to ensure poor areas are not left out.

Most were defeated by the Republicans who have a majority on the panel, including the Internet neutrality amendment. But lawmakers approved by voice vote a provision requiring high- speed Internet providers to sell the service without tying it with voice or other products.

The bill would also empower the Federal Communications Commission to enforce its principles that call on Internet service providers to permit consumers unfettered Internet access and allow them to run any Internet-based applications.


AT&T and Verizon have pledged that consumers would be able to surf anywhere they want on the Internet, but also want to offer private Internet-based services that offer faster download speeds for products such as movies.

"The principles are vague and unenforceable," said Rep. Edward Markey, the top Democrat on the panel. "The FCC principles do not encompass the nondiscriminatory protections that the Internet has always had and desperately needs in order to ensure its continued vibrance."

The amendment failed by a vote of 23-8, with several Democrats voting against it and one Republican voting yes.

"It is my view that the pipe owner should not decide what the (Internet) content is and the speed of that content into my home," said Rep. Heather Wilson, a New Mexico Republican.

Content companies, such as Inc., fear network providers such as AT&T and Verizon would use those private networks to favor their own services or partners over rivals, leaving the public a narrower Internet pipe.

"I don't think the dire predictions that are discussed by them are necessarily realistic," said Rep. Charles Bass, a New Hampshire Republican.

The subcommittee did agree to add a provision to the bill that would permit the FCC to impose fines of up to $500,000 for violating its principles.

The measure would also permit local authorities to collect up to 5 percent of gross revenue from cable services and the bill's sponsors said state and local authority over public rights-of-way would be preserved.

The panel also turned aside an attempt to limit foreign ownership of licenses for subscription television service.