Remarks of Congressman John D. Dingell, Ranking Member
Committee on Energy and Commerce

THE U.S. CONFERENCE OF MAYORS
74TH WINTER MEETING

Wednesday, January 25, 2006

Thank you, Mike, for that kind introduction. I am pleased to be invited to speak today about telecommunications legislation. You and I have a long history of working together on many issues, including telecommunications policy. We have often discussed the latest effort in Congress to change our telecommunications laws and I am pleased today to provide an update to the entire Conference of Mayors.

I am also pleased to have the opportunity to address this distinguished gathering, who represent an important source of ground-level information about our cities. You should know that the Conference of Mayors -- along with the National League of Cities, the National Association of Counties, and the National Association of Telecommunications Officers and Advisors -- do an exceptional job of keeping the voice of local government heard on Capitol Hill.

We have been good friends over the years. We’ve fought for telecommunications policies that foster competition and protect consumers. And I know that the Mayors have been on the front line in this effort. You provide the important local neighborhood-by-neighborhood perspective, and for Federal policy to be effective, it must be crafted with those views in mind.

Keeping that perspective in the forefront, however, will not be easy. I must tell my good friends here that many challenges lie ahead of us. In two weeks, we will celebrate the 10th anniversary of the enactment of the landmark Telecommunications Act of 1996. The past decade has witnessed a remarkable transformation in the world of telecommunications. The Internet has reshaped the way commerce and government is conducted. New technologies are rapidly stretching the existing legal frameworks.

For this reason, Congress faces enormous pressures to update the telecommunications laws for this modern era, and beyond. The role of local governments in future telecommunications policy is far from certain.

For example, there is a major push for change in the field of video franchising. The current franchise structure is viewed by some as preventing a fast rollout of new broadband networks that include video. As local elected officials, I believe each of you welcomes this new investment to bring your constituents faster and better services, and at lower prices.

We face similar pressures on the Federal level. Congress is being pushed to spur competitive entry in the video marketplace. Not only that, but the Federal Communications Commission (FCC) has launched a broad inquiry into whether the existing franchise process holds back new entry. You may find yourselves in a defensive posture on several fronts.

It is therefore imperative that you redouble your efforts to work with Congress and the industry to shape the new policies. I urge you to engage in conversations with phone companies and cable operators to exchange ideas and find common ground. Your suggestions on how to streamline the franchising process will be highly valued.

I intend to approach franchise reform in a way that is fair to all parties. Many months ago we began to work with the Committee on Energy and Commerce’s Republican majority and with affected stakeholders on this issue. This led to the release of a bipartisan consensus draft in September which many of you refer to as “BITS 1.” While not perfect, we worked to find a delicate balance among the interests at stake. And we sought your feedback on areas for improvement.

But a funny thing happened in November. My Republican colleagues went ahead on their own and released another draft, known as “BITS 2.” As you no doubt know, this draft departed from the previous balanced approach. It undermined our longstanding commitment to localism, competition, and diversity objectives, and it weakened consumer protections.

Notably, the BITS 2 draft failed to protect your legitimate authority over the rights-of-way of cities. And it dramatically altered your franchise fee payment structure. At a hearing held in November, both you and I expressed our great displeasure with the BITS 2 draft.

I think we got their attention. We are back at the table working on “BITS 3.” And you need to be full participants in this process.

You have important responsibilities to manage city property for the safety and benefit of all citizens. But many are questioning what that means in a world where traditional telephone and cable services are broken down into digital bits and sent across interstate data networks. The past few weeks have seen one dizzying announcement after another promising new ways in which content will be delivered to consumers. From television shows downloaded to cell phones, to first-run television episodes available on-demand even before they are broadcast, to broadband delivery of high-quality television and movies, including content created by consumers. This explosion of new content delivery methods will challenge and test current Cable Act definitions, and may put your franchise authority at risk.

There is little understanding on Capitol Hill of the many ways in which legally-entitled franchise fees and other franchise provisions directly benefit citizens at the local level. For example, most cities and towns receive in-kind benefits from cable operators to support public, educational, and government channels, or “PEG channels,” and institutional networks. PEG channels are an important tool for informing citizens about everything from local government decisions to community events. Likewise, institutional networks provide critical capacity for first responders, and redundancy in times of emergency. You need to have a strong presence helping Congress understand the importance of PEG and I-Nets.

Let me mention a few other issues. On build out, current law requires cable operators to become capable of serving all households after a reasonable period of time. New entrants making investments to compete with cable operators are seeking flexibility to serve where they choose. I believe it is important that as many people as possible have competitive access to the infrastructure of the future.

Additionally, both versions of draft legislation would codify the right of local governments to provide broadband services themselves in a competitively neutral manner. This could provide an additional broadband provider, especially where the private sector is slow to respond to a community’s needs. I sense support on the Committee for this provision.

The draft legislation also takes a strong stand on compliance with 911 obligations by all telecommunications providers.

So if done right, this telecommunications reform effort could be a great accomplishment for you. We could end up with legislation that brings the phone companies into the video business quickly, while updating the law and ensuring a continuing role for local governments, even with the introduction of new technologies.

But we have much work to do to achieve this result, and a narrow window in which to get it done. As you know, many state legislatures are already getting involved in these discussions, as is the FCC. So I urge you to continue talking with industry and bringing your ideas for franchise reform to all of us.

Let me mention two other important matters. First, I continue to receive complaints from my constituents about the high level of taxation on telecommunications services, so I encourage you to continue your discussions to facilitate a solution.

Second, first responders must get the spectrum and funding needed to make interoperable communications a reality. Democrats strongly support both spectrum and funding priorities. It is expected that the analog television spectrum will be reclaimed as part of the Republican Budget Act now before Congress. But more spectrum is only part of the solution. It is estimated to cost tens of billions of dollars to achieve public safety communications interoperability. Yet every Republican on our Committee voted against giving you $5.8 billion out of the expected $10 billion or more in spectrum auction proceeds to use for public safety purposes. While the pending Budget Act ultimately set aside a billion dollars, I suspect you will find this amount falls far short in meeting your critical public safety needs.

As you can see, there is much happening in Congress that will have lasting consequences for you and your constituents. Your continued participation in this process is more vital than ever before, because much of your authority in telecommunications policy is at stake. I thank you for your service in this effort, and thank you for the opportunity to speak here today.

For additional information, contact Jodi Seth, Press Secretary,
Committee on Energy and Commerce Democratic Staff
(202) 225-3641