The House Committee on Energy and Commerce

Prepared Statement of The Honorable Fred Upton

to consider H.R. ____, a Committee Print on the Communications Opportunity, Promotion, and Enhancement Act of 2006

Subcommittee on Telecommunications and the Internet
March 30, 2006

Good morning. Today's hearing is on the Communications Opportunity, Promotion, and Efficiency Act -- bipartisan legislation introduced by Chairman Barton, Mr. Rush, Mr. Pickering and myself. I want to thank those Members for their tremendous, bipartisan cooperation, input, and work.

This whole effort is about removing the governmental roadblocks which are getting between consumers' wallets and the increased competition, lower prices, greater choice, and better service quality in the video marketplace which they desperately deserve.

In the 21st century, with cable and two competing, national satellite television providers, which have about a quarter of the MVPD marketplace, technology has put the days of one-video-provider-per-town behind us; and with phone companies poised to offer yet another competitive video choice to consumers, we can really kick competition into high gear.

Yet with approximately 33,000 local franchise authorities nationwide, the current locality-by-locality-by-locality franchise negotiation process is standing in the way of progress. So, it's time to bring that process into the 21st century -- to catch-up with the changes in technology and the marketplace -- so that the consumer can reap the benefits as soon as possible.

This bipartisan legislation marries-up three mutually important principles:

First, it establishes a national franchise option to streamline entry into the marketplace and speed-up delivery of more competitive video choices for consumers;

Second, the bill not only preserves the option for cable operators and localities to strike their own local franchise deals in lieu of a national franchise, but also preserves -- in the national franchise -- critically important elements of the legacy local franchise framework, namely: (1) local control over rights-of-way; (2) a franchise fee of up to 5% of gross revenues; (3) required carriage of public, educational, and governmental (PEG) programming; and (4) an additional 1% of gross revenues - on top of the 5% franchise fee -- for PEG and institutional network support.

Third, the bill seeks to create a level regulatory playing field for all wireline video providers, given the competitive nature of the marketplace, so that consumers - and not the government - will choose the winners and losers in the marketplace.

Moreover, I want to highlight another important element of the bill, which I believe will also be of great value to local governments. Title IV of the bill prohibits states from preventing local governments from providing telecommunications, information, or cable services. In my view, if a local government wants to provide, or facilitate the provision of, its own services for the benefit of its citizens, then our national communications policy should be to permit that.

In closing, I do want to mention all of the work that Mr. Dingell and Mr. Markey have invested, with us, in this issue. It is my hope that we can build on the bipartisanship of the legislation before us today, and I look forward to working with them, Members who have spent a lot of time on this issue like Ms. Blackburn, Mr. Wynn, and Mr. Buyer -- and all Members of this Subcommittee and Committee -- in the days to come. It is my intention to mark-up this legislation in Subcommittee next week, and move toward full Committee mark-up after the Easter District Work Period.

Again, I want to thank Chairman Barton, Mr. Rush, and Mr. Pickering - and their staffs - for getting us hear today, and I look forward to the testimony of today's witnesses.