House Energy & Commerce Chairman Joe Barton (R-TX), along with Reps. Chip Pickering (R-MS) and Fred Upton (R-MI) have an alternative plan in mind for cable franchise reform, according to this afternoon’s National Journal’s Technology Daily ($). Like the Dingell plan, the Republican vision includes a national franchise according to which new entrants would pay the customary 5% franchise fee to localities. But the Republican is superior in two critical respects:
- No build-out requirement.
- No requirement to negotiate with local franchise authorities as a pre-condition to obtain a national franchise.
It may sound counterintuitive, but the absence of a build-out requirement is actually better for consumers because it reduces investment risk. Tens of billions of dollars are necessary to extend fiber to the neighborhood or to the home. That investment won’t happen if new entrants are subjected to monopoly regulation.
A negotiation requirement, like the one in the Dingell plan, is a waste of time and just increases the likelihood that new video entrants will have to charge higher prices than necessary.
Technology Daily also repeats an earlier report that “net neutrality” is dead, at least for this session of Congress. There is too little time and the issue strikes many as too complicated.
Actually, it is quite simple. Clear away the major obstacle to massive investment in local fiber network capacity (the anachronistic local franchise process) and let abundant new bandwidth do away with the need for Quality of Service algorithms.