Copyright 2006 The Atlanta Journal-Constitution
The Atlanta Journal-Constitution
March 10, 2006 Friday
Main Edition
By Marilyn Geewax
From Lexis Nexis

Washington --- Key House members have agreed on a telecommunications law overhaul that would give regional phone companies a nationwide franchise for pay video services, congressional staffers said Thursday.

The bill could start moving through the House as early as next week, although its details are still being worked out, the staffers said.

The right to offer advanced video services nationwide, rather than having to seek municipal franchises as cable operators must, would be a huge victory for companies such as BellSouth Corp. and AT&T Inc.

In a conference call with reporters, Kyle McSlarrow, president of the National Cable & Telecommunications Association, condemned the legislation for giving a "special break" to the phone companies.

"This is a huge step backwards" on the road to creating more competition among video service providers, he said.

The congressional staffers said that House Energy and Commerce Committee Chairman Joe Barton (R-Texas), who has held numerous hearings on telecom issues, reached an agreement in principle Wednesday night with the committee's leading Democrats.

Committee spokesmen refused to comment about the bill.

Bill McCloskey, BellSouth's spokesman in Washington, said that "the committee has kept a very tight lid on both the process and the results, but we hope that the reported agreement leads to an early markup in the House committee."

That would put the bill on track for a vote by the full House this spring.

In the Senate, Alaska Republican Ted Stevens has said the Senate Commerce Committee he chairs plans to complete work on a telecom overhaul by mid-April. If so, the Senate could vote by Memorial Day, with final legislation signed into law this summer.

In a letter sent Wednesday to the Federal Communications Commission, Verizon Communications said the franchising process takes six to 19 months in each market.

The new House legislation reportedly would give Bell phone companies a nationwide franchise but would require them to pay 6 percent of their revenue to the local franchise authority. Most local franchise agreements require operators to pay 5 percent.

The bill also reportedly would force cable operators to continue observing local requirements to "build out" their service to everyone in a given geographic area --- at least until their phone competitors have reached 15 percent of the local video market.

The House bill is also expected to address "Net neutrality" --- whether broadband Internet providers should be allowed to charge fees to content providers for speedy delivery.

Consumer advocates say network operators should provide content on an equal basis to all. This week's merger announcement by AT&T and BellSouth is thought to increase the likelihood that Congress will insist on tougher neutrality language.

Also, telecom companies disagree about who should pay into a fund for rural service, and how much.

-- Staff writer David Ho contributed to this article.