Congress is working on legislation that could change the way cities and towns across the country regulate telecommunications service providers in their community.

Currently, cable companies have to obtain franchises from municipalities they serve. For years, these franchise agreements have provided residents with local access broadcasting, including broadcasts of their local government at work. The agreements also protect public ways and assure that roads will be repaired properly after any excavation work. In addition, franchise agreements provide protection for minority communities, which may otherwise be underserved.

Revenues raised from franchise fees, rights of way fees, and other similar charges are an important source of local revenues.

Cable and telecommunications providers are now able to deliver voice, video and data communications services over the Internet, using the same wires and wireless infrastructure used to deliver regulated services. Phone companies are now also providing video, voice and data services that allow them to compete with cable companies.

These service providers are now seeking to preempt local cable franchise agreements, claiming that they hinder the expansion of their industry, even though the cable industry has thrived for decades under the agreements.

The U.S. House Telecommunications Subcommittee has been holding hearings on the issue and is expected to produce legislation this summer.

– Marc Hymovitz