Will Congress Open the Market for Online Television?

<?xml:namespace prefix = st1 ns = “urn:schemas-microsoft-com:office:smarttags” />Washington, D.C., February 15, 2006—The future of video content online could begin today in the Senate Commerce Committee with a hearing on whether telephone companies can deliver video programming over broadband Internet connections. Currently, the rollout of video content online is being held back by the complexity of franchise regulations applied to traditional cable providers, such as build-out requirements. <?xml:namespace prefix = o ns = “urn:schemas-microsoft-com:office:office” />

Senators such as John Ensign (R-NV), chief sponsor of the Broadband Investment and Consumer Choice Act, are moving to create a national video franchise, freeing providers from having to obtain municipal permits from a labyrinth of over 30,000 franchising jurisdictions.

“To put the current system in perspective, at a rate of one new franchise per day, it would take a new competitor decades to reach every municipality in America,” said Competitive Enterprise Institute Vice President for Policy Clyde Wayne Crews. “Unless the system is reformed, the full benefits of competition in video services are unlikely to reach customers any time soon.”

While a complete elimination of government franchising requirements would be ideal, freeing all video competitors from the current tangle of regulatory barriers via a national video franchise would also be a significant step forward. Consumers will end up with more choices at lower prices, with the resulting competition offering cutting edge video services and technology. Freeing the video market, including incumbent cable providers, from the current outdated and anti-competitive system will also stimulate billions of dollars in new investments.

“Nearly a decade has passed since Congress addressed significant telecommunications reform, and in that time technology has grown by leaps and bounds,” said Crews. “It is essential that Congress allow a free and competitive market in which new technologies can flourish.”