June 30, 2005

Washington, DC – In an effort to give consumers more choices and lower prices in the television market, Senator Gordon Smith (R-OR) and Senator John D. (Jay) Rockefeller IV (D-WV) have introduced the Video Choice Act of 2005. The bill would enable telephone companies to send video over their upgraded network systems, giving customers greater content options and driving down video programming prices.

“Technology has greatly expanded our access to information and entertainment and we have to make sure our laws keep up with it,” Smith said. “Competition lowers prices, improves efficiency, and spurs innovation; and everyone will benefit from these gains.”

“This bill will give Americans greater choices in terms of content options and price benefits,” said Rockefeller. “We’ll also benefit from next-generation networks, which will enable consumers greater access to broadband services. That’s crucial for the rural communities in my state.”

The Video Choice Act of 2005 would promote competition by enabling video providers to offer programming without obtaining duplicative franchise agreements. The legislation also mandates that all vital social policy obligations of current cable television operators be met by others the video industry. Video providers will continue paying fees similar to those charged to cable providers, thus protecting local governments’ revenues. The bill also requires video providers to carry all existing local public, educational, and government use channels and all local broadcast stations. It also requires that providers adhere to strict consumer privacy obligations and comply with all consumer protections and customer service requirements. Finally, the bill contains anti-redlining provisions that prohibit video providers from denying services to any group of potential subscribers because of community income levels.

Cable companies control nearly 70 percent of the multi-channel video market and are not subject to effective price competition for video services. In places where there is competition for cable services, consumers have benefited. According to a Government Accountability Office report, cable television rates are up to 41 percent lower in areas where competition for wired video exists.

As new video providers develop next-generation networks, consumers and businesses would have greater access to more robust internet networks. They would also enable consumers and businesses to transmit far larger data. The increased access to networks would especially benefit economic development, particularly in rural areas.

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