The City of Naperville continued its opposition to Illinois House Bill 1500, the Cable and Video Competition Law of 2007, through testimony before the House Telecommunications Committee on March 22. As a result, the Committee Chairman declared that HB 1500 will be amended.

Proposed by AT&T, HB 1500 would provide preferential treatment to the telecom giant and strip local municipalities of franchising power. The proposed law would mandate statewide franchising without local municipal input. If passed, the Illinois Commerce Commission would have the power to grant state-issued authorization to cable and video companies, eliminating the rights of municipalities to govern the service providers for their areas.

In a surprising verdict, Cablevision has lost what we consider a landmark case regarding network digital video recording. Essentially, the judge concluded that a DVR is not the same as a network DVR because the company, i.e. Cablevision would in fact be retransmitting the content. Brilliant. My HDMI cable does the same thing from my "provider’s DVR" to my TV. It's a good thing that Hollywood doesn't have a meter-reader on it as well.

Some background

Cablevision was working on rolling out the ability for customers to store shows on Cablevision's servers rather than sending out thousands of personal DVRs. The network DVR service would have allowed subscribers to have the same functionality as an at-home DVR and would have saved the company and most likely consumers a lot of money in hardware.

However, in May 2006, Hollywood stepped in with several lawsuits contending that network DVRing would violate copyright laws as the company would be technically storing and retransmitting the television programs.

The judge ruled in favor of the studios saying, "The RS-DVR is clearly a service, and I hold that in providing this service, it is Cablevision that does the copying."

Naturally, Cablevision refuted that argument stating the service was no different than at-home DVR technology and TiVo. Cablevision said they will appeal the court's decision.

Jeff Pulver, acting through online video site, Network2, has petitioned the Federal Communications Commission to declare that Internet video is not subject to cable and broadcast television regulations and that the FCC does not intend to impose new regulations on Internet Video.

"Internet Video allows professionals and non-professionals alike to produce a wide variety of high-quality video content and to make it available to anyone, anywhere, at any time and at little or no incremental cost," commented Jeff Pulver, founder and CEO of Network2. "Internet Video shares none of the conditions that provided the basis for traditional broadcast and cable regulation. From a technical standpoint, Internet Video is simply a piece of code, a software application riding over the Internet Protocol. Internet Video is not tied to underlying network infrastructure in the same ways that cable and broadcast-based video content currently is tethered."

On Monday, the Federal Communications Commission released its final written order to streamline the local franchising process through which companies gain local approvals to offer subscription video services. The order was adopted on December 20, 2006.

The FCC concluded that the current operation of the franchising process constitutes an unreasonable barrier to entry that impedes the federal goals of enhanced cable competition and accelerated broadband deployment.

The new rules address several ways by which local franchising authorities are unreasonably refusing to award competitive franchises. These include drawn-out local negotiations with no time limits; unreasonable build-out requirements; unreasonable requests for "in-kind" payments that attempt to subvert the five percent cap on franchise fees; and unreasonable demands with respect to public, educational and government access (or "PEG").

The California Public Utilities Commission yesterday unanimously approved rules for the state's new video-franchising process. The new rules, mandated by the California Digital Infrastructure and Cable Competition Act of 2006, streamline the video-franchise process and open the cable TV market to new competitors.

The new legislation will allow operators such as AT&T and Verizon to seek one video franchise to operate in multiple regions for their IPTV service.

"Consumers will reap the benefits of increased competition in the video market, said PUC president Michael R. Peevey. "I expect we will see greater diversity in video pricing, service options, and programming."

On Monday, the European Union launched a legal case against Germany for passing legislation that would keep rival telecommunications companies off Deutsche Telekom's Internet network through a regulation holiday.

The German Parliament had passed the law last Friday that exempted Deutsche Telekom from regulation or requirement that the company must offer its €3 billion broadband infrastructure to competitors.

Germany should not be surprised with the case being made by the European commission. Last October, the EU competition Commissioner Neelie Kroes sent a letter to the German minister of the economy Michael Glos warning that the draft legislation was not in line with European law.

The case could be escalated to a European court of justice in Luxembourg if Germany decides not to alter the new legislation. Germany will have 15 days to respond to the European commission's letter.

Legislation was introduced today in the Tennessee General Assembly that its sponsors say will provide for more consumer choice in the state's cable-TV market.

The bill, "The Competitive Cable and Video Services Act" (SB 1933 and HB 1421) provides for increased competition in the cable industry in Tennessee by granting a statewide franchise to companies willing to compete against monopoly cable-TV providers, who, over the 10-year period from 1995 to 2005, increased cable prices by 93 percent. In areas of the country where competition has been introduced, cable customers have saved an average of $22.30 per month.

IT Pro reports that while speaking at the Communications Management Association's annual conference, UK's Ofcom chairman, Lord Currie, said there is currently no case for regulating fibre to the home. "But the services are not yet defined, the technology is not yet stable, and so it is too early for a regulatory approach. The case for digging up the road is a rather weak one."

UK's communications regulatory body, Ofcom, has told BBC to rethink their ambitions of offering on-demand Internet TV. Ofcom stated several aspects of the new service would hurt rival services and would "not be in the long-term public interest."

Other requests made by Ofcom included dropping plans to offer audio books and classic music for free and reducing the length of time consumers could store video.

For more details, check out this article from silicon.com.

Singapore's broadcast regulator, Media Development Authority (MDA), has created two types of licenses for IPTV: niche and nationwide. The MDA's new regulations were created with a desire to boost the growth of the IPTV market.

Additionally, Singapore Telecommunications' SingNet, a wholly owned subsidiary, has received a nationwide license to broadcast IPTV by the MDA.

For additional details on the new licenses, click here.

Network Neutrality has already landed on the plate of the 110th Congress, only four days after it reconvened. Senators Byron Dorgan (D-North Dakota) and Olympia Snowe (R-Maine) introduced the bill, known as the Internet Freedom Preservation Act, which can be viewed here. This will be the second go around of network neutrality legislation.

The legislation aims to prevent broadband service providers from blocking or prioritizing traffic over its network. Dorgan said, "The marketplace picked winners and losers, not some central gatekeeper. That freedom — the very core of what makes the Internet what it is today — must be preserved."

AT&T Executive Vice President for Federal Relations Tim McKone stated, "It's unfortunate that at a time when the U.S. ranks 11th behind South Korea in broadband deployment, precious time is being spent on legislation that will impede, not increase America's standing. We continue to believe that net neutrality regulations are unwarranted."

Maybe I'm missing something, but how does network neutrality legislation impede broadband deployment?

According to an article in YONHAP NEWS, the South Korean government-led convergence committee will draft a bill on IPTV by the end of this month. The bill will be submitted to the parliament in March.

The government is pushing for convergence between communications and broadcasting in South Korea but is facing stiff opposition due to competition between these two industries.

Update: South Korea's Information Minister Rho Jun Hyong has also stated the country will launch IPTV in 2007.

If there is anyone rejoicing about the new IPTV services rolling out around the U.S., it must be the attorneys. In yet another lawsuit, AT&T is being pre-emptively sued by the city of Milwaukee for not obtaining a cable franchise agreement for its U-Verse TV service.

The irony is that AT&T has not even begun offering the service yet. Yet, the city wants to stop AT&T from laying anymore fiber until they have signed a cable franchise agreement.

AT&T did agree to pay the city 5 percent of its revenue from the U-Verse TV service but AT&T spokesman Jeff Bentoff said AT&T will not obtain a cable franchise from the city because its service isn't cable operated.

"We're not a cable operator and this is not a cable service. Under the law, we're not subject to those requirements," Bentoff said.

AT&T is not the only one who feels this way: see Richmond Sues Cavalier Telephone over IPTV Service.

Read more on this story in Milwaukee Business Journal, City sues AT&T over U-Verse Service

Yesterday, the U.S. Federal Communications Commission voted in favor of new guidelines that would alter the national franchise system and streamline the process for new companies like AT&T and Verizon to enter the television business with their new IPTV service offerings.

Here are some of the more vivid headlines that amused us: Divided FCC ignores Dingell, approves new cable rules, The FCC Shafts The Locals, Local officials blast FCC vote on cable TV rules, Will FCC Martin-ize Cable?, FCC opts to unclog cable route, Cable chief: The FCC hates us, Why the New FCC Rules May Bring Lawsuits.

The Commissioners voted 3-2 on the initiative with Chairman Kevin Martin and his fellow Republican commissioners Robert McDowell and Deborah Taylor Tate voting in favor. Democrat Commissioners Michael Copps and Jonathan Adelstein voted against the new guidelines.

The new rules will force state and local governments to decide on whether to grant a new franchise within 90-days. It will also remove the requirement that new providers will need to expand service to all residents in an area.

FCC Chairman Kevin Martin also released a report stating cable prices, on average, have rose 5.2 percent in 2004. The report also shows that rates from 1995 to 2005 increased a total of 93 percent.

Richmond, Virginia has launched a lawsuit against Cavalier Telephone for providing IPTV service without a franchise agreement. Cavalier Telephone has been offering their new IPTV service since June and it goes without saying that city is not happy that Cavalier has been avoiding the taxes and associated fees.

According to an article in the Richmond Times Dispatch, the mayor of Richmond informed Cavalier on Oct. 27th that they must obtain a franchise agreement to offer television service. If this is accurate, my question is why did Richmond wait five months before communicating or putting the heat on Cavalier? Clearly, they were aware prior to June that Cavalier was launching a television service.

Richmond officials are in talks with Cavalier but that Cavalier must halt their service until an agreement is reached. The city is also asking that Cavalier retro-pays for all IPTV services offered dating back to the launch.