House Passes Bill to Open Cable Markets

The U.S. House of Representatives has passed the “Communications Opportunity, Promotion and Enhancement Act of 2006 (COPE) by 321-101. If it becomes law, the bill will open the cable television market to further competition, allowing phone companies such as Verizon to offer subscription video programming.

Proponents point to the wider choice consumers will get in cable services, very likely at lower prices. The bill replaces the current unwieldy process of having applicants apply for contracts one at a time with municipalities. Under its terms, phone companies would apply directly to the Federal Communications Commission and receive a license after 30 days.

More Choices, Better Service

“This bill eliminates the barriers to competition,” Cheryl Reed, spokesperson of Consumers for Cable Choice (C4CC), told the E-Commerce Times.

“A near monopolistic environment has taken advantage of consumers for far too long. This bill will force current providers to do a better job of customer service and immediately drive down prices,” she maintained. C4CC, which has received funding from telecom companies, counts among its member organizations such groups as the California Small Business Association.

Opponents of the bill include municipalities that stand to lose control of the franchise process, those who worry that there are no provisions protecting rural and low-income areas, and advocates of net neutrality, who want legislation in place that would prevent companies from discriminating against competitors providing the same service.

Supporters of the House bill counter that COPE will encourage providers to supply more broadband connections for video, voice and data services. The bill also gives the FCC authority to enforce net neutrality principles and set fines of up to US$500,000 for violations.

To the Senate

The Senate is considering similar legislation, although there is speculation that it will be harder to pass in that body because of the net neutrality issue.

“We have been speaking with several senators to provide assistance and talk through the issues of the bill,” Reed said. “Obviously, there are differences in the approach to this issue in the two chambers, including net neutrality and other nuances that are very important and should be discussed.”

Peter Davidson, Verizon senior vice president for federal government relations, has said that he thinks that the size of the bipartisan vote in the House bill increases the momentum for a similar Senate bill.

“The Barton-Rush (House) bill updates the franchising process so consumers can enjoy the benefits of video competition more quickly. We urge the Senate to act soon because every year reform is delayed costs Americans more than $8 billion in their cable bills.”