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Verizon, SBC push for reform of video rules By Justin Hyde CHICAGO (Reuters) - Executives from the two largest U.S. telecommunications companies called on Monday for lower legal barriers to launching their own video services, amid worries that their plans could be delayed by regulators. Both Verizon Communications Inc. (VZ.N: Quote, Profile, Research) and SBC Communications (SBC.N: Quote, Profile, Research) are spending billions of dollars to launch residential video services over the next 12 months, which they see as essential to competing against cable companies targeting their customers with telephone and high-speed Internet services. Each says their plans could be threatened by regulations requiring them to get permission for selling video services from many of the cities they're targeting, a process that can take years. Verizon says that of a possible 10,000 franchise agreements with cities, it has reached six so far. "In order for us to get video officially up and running, we need a change in policy on the franchise issue," said Tom Tauke, Verizon's executive vice president of public policy, during the Supercomm telecommunications industry trade show. "Video franchise processes were designed in an era in which cable companies had absolutely no competition and virtually guaranteed returns," said Forrest E. Miller, SBC's group president. "New entrants have no guarantees, but we do have every incentive to compete." Cable companies and some local officials contend telephone companies should abide by the same rules that cable companies follow. Franchise agreements typically require a company to pay up to 5 percent of its revenues to the government, and can cover everything from where a company must offer service to how many public access channels it carries. Verizon has said it would seek franchises even as it prepares to launch its service later this year. SBC contends that it does not need any franchises because the technology in its service is similar to streaming video over the Internet. SBC plans to launch its video service in one market by the end of the year, with a broader rollout in early 2006. SBC Chief Technical Officer Christopher Rice told Reuters on Monday that the rollout was on schedule. U.S. Sen. Ted Stevens said on Monday he was troubled by requirements that telephone companies would have to get permission from thousands of cities and towns before they could launch video television service to compete with satellite and cable. "That could be very costly and ultimately kill competition, and also increase the prices to the consumer," said Stevens, a Republican from Alaska and chairman of the Senate's Commerce Committee, which would oversee any new telecommunications bills.
http://www.microsite.reuters.com
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