Uncommon Wisdom

Oct 31 2007   8:31PM GMT

Telcos vs. Cable at FCC: Telcos Win the Day

Tom Nolle Tom Nolle Profile: Tom Nolle

The FCC voted today on a number of matters that impact the competition between cable companies and telcos, and it appears that the telcos won the day. In one action, the FCC adopted a Second Report and Order that further clarifies the right of new market entrants to obtain fair process in franchising negotiations. The cable companies have been using their lobbying to stall franchise agreements for the telcos in many areas, and while this second step does not make it impossible to stall further, it does make it likely that tactics to delay franchising will invite FCC action and perhaps even further steps. Second, the FCC has ruled that agreements by owners of multi-tenant housing (apartments, etc.) cannot enter into exclusive deals with a single video provider. The MDU order was unanimous but the Second Report and Order on franchising split along party lines. The number of such splits has encouraged some commentators to suggest that if the administration changes with the next presidential election in the US (which seems likely at the moment) these issues could be reversed. We note that the FCC is essentially a court, with less latitude to reverse itself than a purely administrative body, and that in many cases the split vote reflects less an issue of fact than one of contribution balance. Congress, for example, changed hands and yet the stance of Congress on telecom has not changed since. The FCC also voted to require VoIP providers to support local number portability.

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