Federal regulators Wednesday handed a victory to the nation's two biggest phone companies by barring local governments from imposing unreasonable conditions on new pay- television providers.
The 3-2 vote by the Federal Communications Commission makes it easier for AT&T Inc. and Verizon Communications Inc. to roll out TV programming to compete against cable companies.
AT&T and Verizon have long complained that cities and other municipalities make them jump through unnecessary hoops before they are allowed to sell television service.
Critics of the FCC's decision argue that local officials understand their communities and are in the best position to know what conditions are appropriate to protect their constituents.
Analysts predicted that the rules would be challenged in court.
The decision doesn't override recently passed statutes in California, Texas and seven other states that have removed the authority of cities and counties to issue video franchises. But it does streamline the rules for new pay-TV providers.
For instance, local governments won't be able to take more than 90 days to act on requests or require networks to be completed before service can be offered.
"It is critical to make sure we're doing all we can to bring competition to the marketplace," FCC Chairman Kevin J. Martin said.
The phone carriers hailed the decision, which did not free cable companies from their existing obligations.
"Today's action will fast-forward the delivery of new choices, lower prices and better services to consumers," said Susanne Guyer, Verizon's senior vice president for regulatory affairs.
Robert J. Quinn, Guyer's counterpart at AT&T, said video competition and broadband deployment shouldn't be "held hostage" to old rules designed for a time when cable TV had a monopoly.
But the action drew sharp rebukes from the two dissenting Democrats on the commission, Michael J. Copps and Jonathan S. Adelstein, as well as from the cable TV industry and local governments. Copps and Adelstein, who questioned the legal authority for the agency's action, said customers needed more choices for video and broadband service.
"But agreeing on the many benefits of video competition is hardly the same thing as coming up with rules that will actually encourage honest-to-goodness competition," Copps said.
