Monday, January 15, 2007

Massachusetts May Be Next to Embrace Video Franchise Reform

I recently published a piece on CNET commending the Michigan legislature for enacting a video franchise reform bill, and for doing so without attaching investment-stifling net neutrality mandates. I ended that commentary this way: "In 2007, more states should join Michigan and the other nine states that already have enacted video franchise reform laws. But it is important they do so without adopting net neutrality mandates that, in effect, regulate the Internet and stifle new broadband investment."

Two Massachusetts legislators have introduced video franchise reform legislation in that state. According to the Boston Globe report, the bill would allow new video entrants such as Verizon to bypass the current local franchising process and seek authority from the Massachusetts Department of Telecommunications and Energy (the state PUC) to start providing service. The state would have 15 days to review and act on such applications. The bills sponsors, state Senator Steven Panagiotakos and Representative James Vallee, stated that it can take 1-2 years for a new entrant such as Verizon to receive a franchise from a local community. According to the Globe, Senator Panagiotakos stated: "You're not going to get competition unless you streamline the process. Companies aren't going to spend money on infrastructure if they won't see a return for two or three years."

The two Massachusetts legislators should be commended for introducing the franchise reform bill. Passage will spur video competition, and more broadly, provide incentives for Verizon and other competitors in the broadband marketplace to invest in new digital network infrastructures. The Massachusetts legislature should pass this pro-competitive bill. And, it definitely should not allow the "net neutrality" issue to get in the way.