Internet Innovation Alliance Urges Congress to Address Franchise Fee Reform

Internet Innovation Alliance Urges Congress to Address Franchise Fee Reform

Study Proves that Competition Benefits Consumers

WASHINGTON, Nov. 9 /PRNewswire/ -- Calling on Congress to address the last vestiges of the monopoly communications era, the Internet Innovation Alliance (IIA) today said there is an urgent need for video franchise reform.

IIA released a study analyzing the potential effects of competition from telephone companies in the cable video services market. The in-depth study concluded that when cable operators are forced to compete, either amongst themselves or with new providers, Americans benefit through "large increases in consumer welfare." Unfortunately, competition is being strangled by the antiquated video franchise regulations currently in place.

The study further contends that while the 1996 Act sought to increase competition, it did not go far enough to enable new entrants into the video services market. As a result, cable operators maintain their virtual stranglehold on the market and consumer welfare, quality of service, and technological innovation are all suffering. (Please visit http://www.internetinnovation.org/ for a copy of the study.)

"Potential competitors are eager to use new technology to bring Americans a wide range of services, particularly in video over the Internet, or IPTV," said Bruce Mehlman, former assistant secretary of commerce under President George W. Bush and current IIA co-chair. "But they are stymied by an outdated regulatory process, which requires new entrants to negotiate separate franchise agreements in each town and city -- more than 33,000 nationwide."

In a joint letter to Congress with eight different advocacy groups, the Alliance stressed that the House Committee on Energy and Commerce must ensure the reform of the franchise approval process is included in any legislation or reform of the 1996 Telecommunications Act, the subject of committee hearings today.

In the joint letter, a broad coalition called for updates to the Act, stating that "whatever changes you make to the Telecom Act, please ensure that you recognize the importance of reforming franchise regulations so consumers will benefit from the lower prices, better customer service, and innovations competition will bring to this market."

"Competition will bring not only lower prices but also better service and faster innovations," said Larry Irving, former assistant secretary of commerce under President Bill Clinton and current IIA co-chair. "IPTV networks can bring advanced health care to rural and urban areas and educational resources to schools, students and parents."

Irving warned, though, that the United States could still fall farther behind in broadband deployment, leaving consumers hostage to the high prices and poor service of the cable industry, if the outdated patchwork quilt of federal, state and local regulations affecting broadband providers is not streamlined.

The Internet Innovation Alliance is a broad-based coalition of business and non-profit organizations committed to more widespread usage and availability of broadband through wise policy decisions.

An Open Letter to Congress: Franchise Reform

November 9, 2005
Dear Member of Congress:

Much has changed in the decade since Congress passed the 1996 Telecommunications Act. As Congress is considering changes and updates to this landmark legislation, we would like to remind you of the urgent need for reform of franchise regulations.

Competitors are eager to use new technology to bring Americans a wide range of video services over the Internet, called IPTV. Not only can this technology offer needed competition to the television services offered by the cable companies, but it also can improve health care in rural and urban America, provide educational resources for students and parents and bring lower-cost broadband access to small and midsize companies.

The current, but outdated, franchise regulations were designed for a monopoly environment. New entrants to these markets are stymied not by technology or lack of consumer interest, but rather by the requirement to negotiate franchise agreements in more than 33,000 municipalities across the country. Whatever changes you make to the Telecom Act, please ensure that you recognize the importance of reforming franchise regulations so consumers will benefit from the lower prices, better customer service, and innovations competition will bring to this market.

Sincerely,

Karen Kerrigan
President and CEO
Small Business & Entrepreneurship Council

Harry C. Alford
President and CEO
National Black Chamber of Commerce

Larry Irving & Bruce Mehlman
Co-Chairs
Internet Innovation Alliance

Braden Cox
Technology Counsel
Competitive Enterprise Institute

J. William Lauderback
Executive Vice President
American Conservative Union

Jim Martin
President
60 Plus

George Landrith
President
Frontiers of Freedom

Grover Norquist
President
Americans for Tax Reform

Source: Internet Innovation Alliance

CONTACT: Geoffrey Basye, +1-202-572-6207, for Internet Innovation
Alliance

Web site: http://www.internetinnovation.org/

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