[opendtv] News: Broadcasters alarmed by telco fiber plans

  • From: Craig Birkmaier <craig@xxxxxxxxx>
  • To: OpenDTV Mail List <opendtv@xxxxxxxxxxxxx>
  • Date: Mon, 2 May 2005 08:32:45 -0400


Broadcasters alarmed by telco fiber plans 
  May 1, 2005 2:35 PM, Beyond The Headlines e-newsletter

Verizon Communications and SBC Communications' plans to wire American 
homes with high-speed fiber connections may encounter regulatory 
roadblocks in Congress, CNET reported.

Both telcos are spending billions of dollars on fiber links that can 
carry everything from Internet service to voice and video. Verizon's 
FiOS service already boasts speeds of up to 30Mb/s with a digital TV 
package expected later this year. SBC's similar Lightspeed service is 
supposed to be available no later than early 2006.

These forays into digital TV are alarming television broadcasters and 
some cable companies, which view fiber service as a competitive 
threat, CNET said. Verizon's recent announcement that it plans to 
carry all of NBC Universal's channels on FiOS TV was cited as a 
concern. Last week, Verizon signed on the 11 channels of Showtime 
Networks, including Showtime and The Movie Channel, for carriage on 

The emerging dispute over digital TV effectively opens up a new 
political front in the war between the Bells and cable companies for 
high-speed Internet customers.

Stations would lose audience share and advertising dollars, and these 
dollars fund local programming that makes broadcasting valuable, Greg 
Schmidt, a lawyer speaking on behalf of the NAB, said at a recent 
House hearing.

Congress should prohibit SBC and Verizon from offering digital TV 
unless the companies follow an extensive list of government 
regulations, Schmidt said. Among them: Local broadcasters must remain 
the only source for network programming; fiber providers must be 
required to black out the availability of certain sports games; and 
local TV broadcasts must be carried on fiber networks.

Rep. Rick Boucher, a Virginia Democrat, rattled off a list of 
possible regulatory requirements, adding privacy rules and set-top 
box interoperability to Schmidt's suggestions. Other subcommittee 
members have suggested that indecency rules limiting off-color 
content should apply.

When a cable company wires a community, it must offer service to all 
households, Rep. Ed Markey said, so why should Verizon and SBC be 
permitted to select which neighborhoods are wired with fiber first?

Lea Ann Champion, SBC's vice president for IP operations, said the 
company will invest $2 billion in the next year and that 
technological advances will permit SBC to move rapidly in offering 
fiber links to half of its 36 million customers.

David Cohen, a vice president at Comcast, said that in general, his 
company does not like to seek government favors for competitive 
advantages. But, Cohen warned that there are some questions about who 
is going to preserve the interests of localism.

One point of contention is the "franchise fee" arrangement that 
permits municipalities to bill companies for using their public 
facilities, such as light poles and sewers, to deliver TV signals. 
Earlier this week, Verizon CEO Ivan Seidenberg called for changes to 
franchise fees, saying the Bells should not be charged extra when 
they start serving up digital TV signals.

Robert Ingalls, head of Verizon's retail markets group, told Congress 
his company is being asked to obtain a second franchise, which will 
delay effective video competition for years.

A broader question is whether Congress will dictate TV-over-fiber 
rules through legislative fiat or whether the companies involved will 
be left to negotiate their own arrangements.
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