FCC Chair Pushes For Reform In Video, USF

By Paul Kapustka

LAS VEGAS, Nev. -- For a guy who's about to become a father for the first time, Kevin Martin has an ambitious schedule for the near-term future, filling his agency's plate with reform ideas for video franchising and universal service contributions.

In a speech made Wednesday via video link to attendees here at the USTA Telecom '05 show, the FCC chairman championed both a national plan for obtaining video service franchises, as well as a new method for determining contributions to the USF, which is primarily used to subsidize rural and low-income area telecom providers.

The national plan for obtaining video franchises -- the licenses necessary to provide TV services -- was welcome news to the show's main consitituency of telecom service providers, who would prefer not to negotiate city-by-city to compete with the established cable TV players. Martin, appearing via a satellite connection (perhaps on the advice of his wife, Martin scrubbed a planned live appearance due to the impending delivery the couple's first child), said he had heard tales of telcos facing resistance in obtaining franchises, and said "new video entrants should be encouraged, not impeded from entry."

While full details of Martin's plans may not be known for some time, the chairman did say that the video franchising question would be up for discussion at the FCC's open meeting on Nov. 3. However, some industry observers questioned whether the FCC has the legal authority to intervene in the video-franchising arena, and said Martin's notice of proposed rulemaking may be just a "bully pulpit" move in an area where real rulemaking will be made by Congress, which is also actively discussing video franchising reform."He [Martin] is sending a signal to local authorities not to delay, or ask for lots of conditions, in awarding local video franchises," said Blair Levin, telecom analyst for Legg Mason and former FCC chief of staff for Reed Hundt. Some states, including Texas, are also moving forward on franchising reform, an issue that big players like SBC and Verizon are investing heavily in with lobbying and legal resources.

On the USF front, Martin said the "means of assessing [who contributes] must change," and said he favors a plan based on telephone numbers instead of the current plan, which determines contributions on revenues and applies only to regulated telecom providers. Under a numbers-based plan, new service providers such as VoIP leader Vonage and cable companies would have to make USF contributions. Martin called a numbers-based plan "techonologically neutral," and admitted it was just a first small step in what would probably be a long, messy process of USF reform, not unlike the filled packages Martin will soon face on his home front.

"I'm not sure at this point that there will be a consensus [on USF reform], but we can't wait that much longer," Martin said. "We have to take some action and figure out a solution in the near future."