WASHINGTON, D.C. (AP) — What do traffic signals and street lights have to do with offering a new television service?
That is a question federal regulators will explore as they review whether some communities are requiring phone or cable companies to pay for unrelated projects in return for allowing the companies to offer TV services to residents.
The FCC voted unanimously Nov. 3 to look at the issue, with all four commissioners stressing the importance of competition in the cable market.
“New video entrants, regardless of the technology they employ, should be encouraged — not impeded from entry,” FCC chairman Kevin Martin said.
Cable operators long have had to negotiate franchise agreements with each city they serve. Now phone companies are having to do the same as they begin to offer video services.
Phone companies have complained the process takes far too long, up to 18 months in some cases. They lay some of the blame with local officials for making what the phone companies consider outrageous demands that drag out negotiations.
In one community, for example, officials want Verizon Communications Inc. to connect all of the local traffic signals with fiber, according to a company filing with the FCC.
Another town wants Verizon to provide funds so the community can purchase street lights from the local power company.
Neither community was identified in the Verizon filing.
While voting for the FCC review, the agency’s two Democratic commissioners — Michael Copps and Jonathan Adelstein — emphasized that local officials have a critical role in contract negotiations.
“We should not and indeed cannot usurp for ourselves the authority granted by Congress to local governments,” Adelstein said.
Cable companies say the franchising process has worked well over the past 20 years and that the demands the phone companies are complaining about are rare.
Representatives of local franchise authorities say the phone companies are trying to skirt obligations such as ensuring that services are offered in lower-income areas as well as affluent ones.
The FCC action is the result of efforts by big phone companies to “largely avoid the established local franchising process,” said Libby Beaty, executive director of the National Assn. of Telecommunications Officers and Advisors.
The phone companies deny that and are hoping that the FCC, Congress or state governments will intervene to speed the contracting process.
In Texas, the phone companies won a legislative victory in August when state lawmakers passed a bill allowing the carriers to get a license for television service from the state rather than having to contract with each city they want to serve.
Verizon launched its first television service in September in the Dallas suburb of Keller. The company has contracts to offer video services in about 30 other areas in Texas, California, Florida, Virginia, Massachusetts and New York.
Rival phone company SBC Communications Inc. also is upgrading its network for video, and plans to launch its own TV service in early 2006.
