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NLC calls dialtone rules "too narrow." (National League of Cities; video dialtone ruling would allow telephone companies to enter video programming without a local franchise) (Brief Article)

A survey of the comments on "video dialtone" received by the Federal Communications Commission (FCC), reveals many concerns of the telecommunications industry, in addition to those of municipal and consumer groups. Most of the commenters are unhappy with the ruling, released in November of last year, allowing telephone companies to deliver video programming without a local franchise agreement.

The National League of Cities joined with the National Association of Telecommunications Officers and Advisors (NATOA), the U.S. Conference of Mayors and the National Association of Counties (NACo) in filing comments with the FCC. The local groups called the rulemaking "too narrow" and strongly objected to the decision to allow telcos to circumvent the franchising process.

Video dialtone is defined by telephone companies (telcos) as a new technology that would offer a wide range of information and programming services through fiber optic cable. Once this technology is fully developed, it would allow a consumer to 'dial up" a number on their telephone and receive video programming on demand.

In the November ruling, the FCC concluded that video dialtone services offered by local exchange carriers (such as AT&T) are not subject to local franchising requirements under the 1984 Cable Act. When announcing this decision, the FCC requested that interested parties comment on proposals that would define the manner and extent to which telcos can provide video dialtone services and affiliated programming services.

The joint municipal filing stated that the Commission "must recognize the legitimate and historical role of franchising authorities in the dual federal-local structure for the regulation of multichannel video programming service providers which protects the public interest."

Other comments included, The National Cable Television Association of (NCTA), the National Association of Broadcasters (NAB), the Community Antenna Television Association (CATA), CompuServe, Bell South, U.S. West, and the Consumer Federation of America (CFA). In general, most groups were critical of the rulemaking in that it failed to define the exact concept of video dialtone.

Cable industry commenters also pointed out the danger of cross-subsidization (i.e. telcos funding the new video technology by raising phone rates) and called the ruling "unlawful" according to the 1984 Cable Act. According to NCTA, the Cable Act prohibits telcos from performing "video retailng functions of any nature".

Telephone companies, who have been lobbying Congress for the ability to fully enter the cable business, wrote that the ruling does not go far enough. USTA called upon the FCC to recommend that Congress completely remove the cable-telco cross-ownership ban, allowing telcos to become cable operators.

Broadcasters commented that video dialtone services could be beneficial to consumers, as serious competition to cable, but expressed concern about cross-subsidization and recommended that telcos not be allowed to provide video programming within their own service areas. For more information on this issue, or a copy of NLC's comments, call Anna Ferrera in NLC's Center for Policy and Federal Relations (202) 626-3020.
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Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Author:Ferrera, Anna Pulido
Publication:Nation's Cities Weekly
Article Type:Brief Article
Date:Feb 24, 1992
Words:481
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