Franchising Fracas: FCC's Action Could Bring Old Foes Together

Despite years of tension and name calling between cable operators and franchise authorities, legislative and regulatory battles over franchising are clearing the way for potential alliances. “If the cable companies want to be our partners, we’re open to that,” said Alex Ponder, a lobbyist for the National League of Cities, which on Dec 12 was among several municipal groups that sent a letter to FCC chmn Kevin Martin outlining concerns with a draft franchising order now circulating at the agency (Cfax, 12/13). Following Congress’ failure to pass a comprehensive telecom bill this year, Martin has scheduled a Dec 20 vote on an order that could give telcos ways to bypass local govts to obtain franchises. Among concerns are unconfirmed reports that the draft order contains a “shot clock” setting a deadline for local action, as well as provisions allowing operators to apply “in-kind” services toward their franchise-fee cash payments and to operate under lax build-out requirements. But cities’ biggest objection—shared by many in the cable industry—is that the FCC is assuming authority it doesn’t have. “We just don’t believe the FCC has the authority to act on certain issues,” Ponder said. One cable MSO lobbyist agreed that “it just keeps going back to that fundamental question,” adding “I think you’re going to see a race to the courthouse here” that could even involve “coordination” with municipal interests. Another cable industry source, however, said cities would likely lead any legal effort as “they have more to lose here.” All sides acknowledge that no one really knows what the FCC’s final order will look like next week. But the speculation has everyone picking their battles. “Neither the Cable Act nor its legislative history gives the FCC the authority to adopt regulations to force local governments to sign cable-service contracts with requesting phone companies within 90 days, and that makes any new regulations subject to challenge,” said ACA pres/CEO Matt Polka. One thing’s for sure: at least when it comes to franchise reform, cable and municipal interests seem to be finding some common ground.