t’s hard to imagine that any real changes in American telecom policy will occur this year, and what patchwork legislation does come forth is likely to face further revisions. Gary Arlen reports from Capitol Hill

Legislative reforms

Congress is rushing to enact reforms, pushed by Telcos, especially AT&T and its allies, which need legislative support to pursue their proposed television and broadband businesses. Opponents are concerned that piecemeal overhaul will further complicate telecom/media evolution and result in prolonged court battles; perhaps even impeding actual IPTV deployment. Indeed, one clause in the pending legislation could quickly send legal appeals to a US District Court. AT&T, Verizon and their trade organisation, the USTA, are seeking legislative assurances that they can plunge ahead with their TV ventures. AT&T’s u-Verse service is ramping up for launch this autumn while Verizon’s FiOS TV system is being deployed in selected areas where local laws permit its presence as an ‘overbuilder’.

Net Neutrality

Meanwhile, battle lines have been drawn over Net Neutrality, pitting content suppliers such as Google, Yahoo! and eBay - all of which have their own broadband video agendas - against the Telcos. At the root of their concern is that without neutrality - a legacy of the industry’s common carrier heritage - Telcos could discriminate against or prioritise in favour of certain content in which they have a financial interest. Portals, content packagers and others allege that favoured providers could have prioritised positions, higher speed guarantees or other preferences in a non-neutral environment.

Moreover, the US House of Representatives adopted The Communications Opportunity, Promotion and Enhancement (COPE) Act (H.R. 5252) in late May by an overwhelmingly pro-Telco vote of 321-101. The differences between this House package and the aforementioned Senate bill will require joint negotiation that may further impede action this year. Although the current versions of the House and Senate legislation is coming through their respective Commerce Committees (which are considered to be friendly to Telcos), the House and Senate Judiciary Committees, seen as more friendly to Hollywood and other content suppliers, have tried to usurp jurisdiction. Typifying the legislative complexity is an amendment making it unlawful “to prioritise or give preferential or discriminatory treatment … based on an advertising or other commercial agreement with a third-party.”

As Congress ponders telecom reform, state and local governments are scurrying to ensure that they do not lose revenue because of revised cable TV regulation. The US Conference of Mayors is encouraging local officials to oppose plans that “strip local authority [over] rights-of-way for video services” or enable new video companies to ‘red-line’: that is, offer services only “to a few well-to-do neighbourhoods,” rather than the required universal build-out to all residents.

Franchise fees

Local officials also oppose Sen. Jon McCain’s (RArizona) proposed amendments to reduce the franchise fee cap from five per cent to three per cent and the elimination of all cell-phone taxes. Such plans could create major revenue shortfalls for local government coffers. In this environment it appears that any patchwork telecom legislation that does come forth during the next two or three months will face further revisions in future years.

Gary Arlen has analysed Washington telecom/media tech policy for more than 20 years. He can be reached at GaryArlen@columnist.com