Washington, D.C., November 3, 2005—With its Notice of Proposed Rulemaking, the Federal Communications Commission is taking on a deregulatory effort of potentially historic proportions. While government regulators usually focus their attention on what they call “market failure,” the FCC’s focus will be on how to remedy local government actions that have hampered competition in the market for video service.

The FCC will be accepting comment on whether local franchising authorities unreasonably refuse to award cable franchises to competitive entrants. A finding that local franchise agreements harm competition in the market for video services could largely eliminate the need for thousands of local franchise agreements, themselves legacies of the early days of cable television regulation. Consumers across the country will be the primary beneficiaries of the greater deployment of broadband and increased competition among providers of video content expected to result.  

One of the many sticking points for advanced communications deployment in the past has been the interference of cities and localities. Indeed, in today’s communications landscape dominated by large, national companies, localities are able to exert powerful influence over national policy.

Our country’s federalist arrangement serves us well as a nation when states compete against each other. Income taxes and corporate law are examples of areas where states effectively compete. However, the federalism arrangement tends to break down in industries dominated by large, national networks. CEI looks forward to commenting on the proposed rulemaking.