TELECOM Digest OnLine - Sorted: Local Governments Complain FCC Not Playing Fair

Local Governments Complain FCC Not Playing Fair

Aassociated Press News Wire (
Sun, 28 Jan 2007 16:48:23 -0600

Local Governments: FCC Not Playing Fair

The nation's chief telecommunications regulator stands accused of
misrepresenting the facts while pushing through rules that will make
it easier for big phone companies to get into cable television.

The policy change won approval by the Federal Communications
Commission on a 3-2 vote Dec. 20. That angered local government
officials who claim the agency overstepped its authority and now
promise a legal challenge. The vote also drew the threat of a
"legislative fix" from a powerful congressman.

The new rules are meant to spur more competition for cable television
providers. They require local governments to speed up the approval
process for new competitors, cap the fees paid by new entrants and
ease requirements that competitors build systems that reach every

Consumer groups long have complained about rising cable rates and poor
service, blaming the problems on a lack of competition.

But opponents of the FCC's action say the new rules amount to a
"federalization" of the cable franchising process. They contend the
change will mean a loss of local oversight, fewer dollars for public
and government access channels and the possibility of "cherry picking"
by companies that choose to serve only the richest neighborhoods.

Supporters of the policy change have cited dozens of instances in
which local governments have made unreasonable demands of new
competitors, effectively blocking them from offering service.

It was one of those claims that raised the ire of David L. Smith, the
city attorney in Tampa, Fla. He said the FCC chairman, Kevin Martin,
made a "blatantly inaccurate allegation" about Tampa's conduct during
franchise negotiations with Verizon Communications Inc.

Martin was quizzing an agency employee during a commission meeting
before casting his vote when he asked: "Is Verizon still required to
film the tutoring classes for the math classes in Tampa, Florida in
order to get a franchise?"

Rosemary Harold, a deputy chief in the FCC's Media Bureau, answered,
"Yes, Mr. Chairman."

Harold was put on the spot earlier by commissioner Jonathan Adelstein,
who voted against the FCC proposal. Adelstein asked Harold to cite
"specific communities" that are "particularly having a problem right
now" in gaining a franchise.

Smith, who negotiated with Verizon in Tampa, says Martin's allegation
neither was in nor a condition of the franchise agreement. Martin's
characterization, the lawyer said, was "complete and abject fiction."

Smith also said the FCC had never contacted him about the claim.

In an interview Friday, Martin said he probably should not have used
the word "still" but largely stood by his argument _ that Tampa was
making an unreasonable demand of Verizon. He said he had not responded
to Smith's letter, but would do so.

"These are difficult issues," he said. "I think the commission is
trying to find a balance between protecting the local communities'
interest but also making sure they are not effectively pre-empting the
ability (of new companies) to get in and compete."

The dispute raises a larger question about whether the agency should
investigate specific allegations made by companies that stand to
benefit from rules or simply assume that they are true.

Adelstein, a Democrat, accused his agency of failing to "conduct any
independent fact-finding" and said the FCC did not "attempt to verify
the allegations made by parties who have a vested interest in the
outcome of this proceeding."

He accused Martin and the two other Republican commissioners who voted
in favor of the new rules of presuming that "in every case that the
big phone companies are right and the local governments are wrong."

FCC spokeswoman Tamara Lipper said it would be "impossible for the
commission to independently vet every single one of the millions of
comments that inform our rule-making."

She said the agency issues public notices and posts specific comment and
reply comment periods to "ensure all sides of an issue have the
opportunity to weigh in." If someone knowingly submits false information
in the record, he can be "subject to disciplinary action," she added.

The stakes in this battle are high.

Companies such as Verizon and AT&T are spending billions of dollars to
lay fiber-optic cable in their service areas in the hope they will be
able to compete with the cable television industry.

The Tampa allegation outlined by Martin first appeared in a Wall
Street Journal story in October 2005 that painted a sympathetic
portrait of Verizon's travails in gaining franchises.

The account said Verizon, seeking permission to offer TV service in
Tampa, was presented with "a $13 million wish list" of items it
needed, including "video cameras to film a math-tutoring program for

The story stated that "Verizon lawyers saw it as a demand."

Less than a week after the story ran, the FCC opened its proceeding on
video franchising.

Smith said Tampa gave Verizon a $13 million "needs assessment" that he
says was required by law in order to obtain contributions for
equipment for public access and government channels. The city's
existing cable franchise, Bright House Networks, had paid $5.5 million
and pledged $1 million more, he said.

Smith also said under Florida law, a competitor would be required to
match that amount to obtain a franchise.

He said it is possible the "needs assessment" included video cameras
to film shows such as the math class, but that there was never "a
specific quid pro quo." Nor was anything like that mentioned in the
franchise agreement, he said.

"Even if it was on the needs list as one of the items, that doesn't
mean that's how the money would be spent," he added.

Oddly enough, Verizon mentions the tangle with Tampa in its comments
with the FCC, but does not name the city nor does it reference the
math program. It did, however, revise its comments and apologize after
a complaint from Tampa about how the company represented the

AT&T, however, listed the newspaper story in its FCC filing as part of
37 pages of examples of local communities erecting barriers to

In addition to dealing with angry local governments, the agency's
video franchise decision faces other challenges.

Rep. John Dingell, chairman of the House Energy and Commerce
Committee, said through a spokeswoman that he believes the agency
overstepped its authority.

Dingell, D-Mich., was chairman and played a central role in passing
cable laws in 1984 and 1992 that the agency analyzed in making its

Spokeswoman Jodi Seth said Dingell "does not believe that the law
allows the FCC to drastically reduce the ability of a local government
to protect its citizens." She said Dingell plans to "review the FCC's
action in the course of the committee's oversight this year. At that
point, he may decide that a legislative fix is necessary."

Meanwhile, local governments are readying for a legal fight.

The National Association of Telecommunications Officers and Advisors,
a trade group that represents local governments on cable franchising
issues, has hired a law firm to challenge the decision. The group is
joined by the National League of Cities, the National Association of
Counties and others.

A court challenge cannot take place, however, until the FCC releases
the final version of the new rules. That is expected soon.

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