Helping the nation transition to digital television is a huge priority for the FCC’s Media Bureau and so is increasing competition for multichannel programming. In this context, panelists at Wiley Rein Communications and Techlaw Conference discussed yesterday how regulation is helping and sometimes hurting that effort.

The video franchising rule changes in Section 621 of the Cable Communications Policy Act provided some tension to the panel. Regulators, associations, Cox Enterprises and Verizon all agreed that franchise reform is a welcome change, but the two operators disagreed generally on the direction of that reform.

Monica Desai, media bureau chief of the FCC, said, “We’re looking forward to seeing the competitive effect of the order. It has only been in effect since April, so we haven’t gotten too much feedback yet. And it is still under review.” Sitting next to Desai, David Young, executive director of federal regulatory affairs for Verizon, said his company appreciated a lot of the actions and attention this issue has gotten. “The Section 621 order was a huge step forward in laying a framework for competitive franchises,” Young said.

He added that the commission order has been helpful in setting boundaries for local franchise authorities to let them know what requirements from them are reasonable and which are not. “We’re already seeing the benefits of that, and statewide franchise legislation has had dramatic results in states where is has passed,” Young said.

Glenn Reynolds, vice president of policy for USTelecom, said there has been a lot of movement in video deployments, and that the commission’s 621 order adopting state franchise rules played a big part. He said the next battleground will be access to content and copyright rules.

“We’ll spend a lot of time arguing over access to content,” Reynolds said. “And we hold that copyright rules are technology neutral, and all companies should have access to copyrighted materials.”

Alexandra Wilson, vice president of public policy and regulatory affairs for Cox, disagreed, saying franchising is still an issue. “The cable industry wasn’t thrilled with 621,” she said. “If the time is right to streamline the franchise process in general, then it is right to make sure everyone is treated equally. And we’re not there yet.”

Cable companies had to deal with local authorities who were given the right to demand benefits that had nothing to do with right-of-way or fair compensation for construction and other costs. “I’m talking about getting treated similarly with construction permits and auditing. It has not been our experience that local franchises are impeding the phone companies getting into franchises in our areas,” Wilson said.

Wilson said there are other areas the commission could be examining to promote competition, such as redlining, hinting that competitors were choosing only the most profitable areas.

“Nobody told cable companies they had to build out [in certain areas], so there’s no reason to require new video entrants to build out an entire area,” Verizon’s Young said.

Reynolds said that the Section 621 order and state franchising are coming together to move the ball forward on video, and that the time for arguing is over. “Last year was the time for legislative efforts, but that time has passed and companies should focus now in getting facilities built,” he said.

Young said Verizon has been successful so far negotiating contracts for access to content. However, Reynolds cautioned that not all providers have the same capacity to negotiate that Verizon does. “The whole debate sometimes gets pigeonholed as a battle between Big Cable and AT&T or Verizon, but there are a whole other set of smaller folks, some of whom have been in business just as long at AT&T and Verizon, that can’t compete,” he said. “So we have to narrow the argument.”

Other regulatory issues were raised such as opening the set-top box market to more competition. But the adult content debate went nowhere.