^{Democracy & Technology Blog} Franchise reform countdown

This week’s hearing on local franchising in the Senate Commerce Committee was breathtaking. Senator after senator expressed doubts about the wisdom of subjecting new entrants to the cable franchise process. Consumer advocates generally supported the phone companies. The same day, a group of 6 Republicans and Democrats on the committee signed a letter stating that Congress should reform the franchise process.
“I think the stars are aligned,” noted Senator Jay Rockefeller (D-WV).
One gets the impression that the cable industry hasn’t been paying attention for the past 25 years, as they take positions and employ arguments that monopolists have used in the past with little-to-no success (see, e.g., Deal of the Century: The Breakup of AT&T [1987], by Steve Coll).
Most members of the Senate Commerce Committee are committed to “pro-competition” policy, a result-oriented philosophy that embraces regulation and allows for picking winners and losers. A good example of pro-competition doctrine was the observation made by the Consumer Union’s Gene Kimmelman at the hearing, that “a transition always requires some benefits to the new entrant.”
This is also called asymmetric regulation, and it may produce quick results. But those results can be short-lived — as in the case of CLECs — since inefficient compeititon is unsustainable in a deregulated market. Both the telephone and cable companies are big enough to take care of themselves, and, like Senator Conrad Burns (R-MT) said, should be subject to the same rule book.
This week’s hearing produced a lot of consensus that a regulatory rule book would stifle competitive entry. Hopefully the committee will draw the logical inference that what is needed now is a deregulatory rule book.