House OKs Bill to Help Telephone Companies Offer TV Service

The U.S. House of Representatives handed a victory to AT&T Inc. (T) and Verizon Communications (VZ) on Thursday by approving a bill that would make it easier for them to offer subscription television service.

The House, by a vote of 321 to 101, passed a bill allowing companies like AT&T and Verizon to apply for a nationwide license to offer TV service instead of negotiating with each city for permission, which they argue could take years.

Lawmakers also turned aside an effort by some Democrats to bar high-speed Internet broadband providers like AT&T and Comcast Corp. from seeking payment from content providers like Google Inc. (GOOG) and eBay Inc. (EBAY) to guarantee access and service quality.

The bill differs significantly from legislation pending in the Senate. With a short legislative session ahead of the November elections, that could make it difficult for Congress to pass a new law this year.

The phone carriers want to speed their expansion into the lucrative TV business to better compete against cable companies which are rapidly encroaching into the communications business with their own telephone and broadband services.

The current licensing process is "hindering the deployment of advanced broadband networks that will bring increasingly innovative and competitive services," said Rep. Joe Barton, a Texas Republican and an author of the bill.

Already several states have passed laws helping telephone carriers. Verizon has been signing up scores of customers in places like Texas, leading to price wars with cable operators.

Some Democrats argued the House measure would allow the phone carriers to avoid building their networks to lower-income areas and that local authorities would lose control of services in their cities while consumers would face higher prices.

"Consumers are able to anticipate a few things, they're going to get worse service, probably less competition, and almost certainly increases in rates," said Rep. John Dingell, a Michigan Democrat.


Most of the heated lobbying during the House debate and in recent weeks has centered on whether more protections were needed for access to the broadband networks.

The bill would give the FCC the authority to enforce principles it adopted last year that call on the Internet providers to ensure consumers have unfettered access to content and allow them to run any Internet-based applications.

The House did vote to increase proposed penalties for violating those principles to $750,000 from $500,000.

Google and eBay had urged Congress to prevent network operators from charging content providers more to ensure consumers can access their Web sites and services.

"Broadband providers are planning a two-lane Internet, with a fast lane for their content and for the content of those who pay, and a slow lane for everyone else," said Rep. Rick Boucher, a Virginia Democrat.

However, Verizon and AT&T have said they would not block or degrade access to the open Internet, but they do want to offer private Internet-based services that offer faster download speeds for products such as movies.

Lawmakers turned aside an amendment to bar network providers from charging extra by a vote of 269 to 152.

"I live by an adage 'if ain't broke don't fix it'," said Rep. Fred Upton, a Michigan Republican. "There's no evidence of any problem."

While the measure would nationalize the cable licensing process, it would allow local authorities to collect up to 6 percent of gross revenue from cable television services.