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Telco Video Franchise Rules Set

March 15, 2007 | Ibex Marketing

A report last week on describes the new video franchising rules set down by the FCC. The rules should help the telephone companies get permission to start offering television services around the country. One key element of the rules is that the local franchise authorities must reach an agreement within 90 days of application if the company has access to public rights-of-way. Most telephone companies have this. If the company does not have such access, then the local authorities have six months to reach an agreement.

This time limit should help speed the roll-out of television services by phone companies such as Verizon with their FiOS offering. The rules also put limits on what the local authorities can charge as franchise fees. It’s the local communities who lose in this, as they won’t be able to drag out negotiations or tack on extra requirements and fees. The companies will still have to reach agreements with the local communities, and the federal rules don’t supercede any existing state laws.

In the end, it appears that this will be a win for the consumers. When cable companies started service, they were given monopolies on local service as an incentive to complete the build-out of their networks. Decades later, the economics of the situation have changed, and it looks as though the telcos will soon be active competitors in many major markets. And competition generally brings lower costs and more choices to the consumer. So streamlining the franchise process is likely to be a good thing.