Amendment by Amendment Summary of Subcommittee Mark Up of COPE Act

April 5, 2006. The House Commerce Committee's (HCC) Subcommittee on Telecommunications and the Internet amended and approved HR __ [PDF], the "Communications Opportunity, Promotion, and Enhancement Act of 2006", or COPE Act. The Subcommittee approved many amendments. Many amended were offered, but rejected or withdrawn. Many of the withdrawn amendments, particularly those related to consumer protection issues, were withdrawn under commitments from the manager to work with the sponsor on appropriate language. Finally, one approved amendment may be removed at the full Committee mark up. The following is an amendment by amendment summary of the mark up.

1. Manager's Amendment to Title I. Rep. Upton began the April 5 meeting by calling up the base bill. He then offered and explained his manager's amendment, which the Subcommittee approved by voice vote.

This amendment makes seven changes to the base bill. First, it provides further provisions on when a national franchise must return to a local franchise. Second, it addresses eligibility for a national franchise. It provides that if a cable operator and an ILEC are both providing cable service in a franchise area prior to enactment, both are eligible for a national franchise when the local franchise of either is no longer in effect.

Third, it addresses public, educational, and government (PEG) channels. It allows the FCC to determine the number of PEG channels a holder of a national franchise must carry not only in areas where there is no other cable operator, but also in areas where there are other cable operators but none have been required to carry PEG channels.

Fourth, it strengthens the anti-discrimination enforcement language. Fifth, it strikes the language in the base bill that excludes from gross revenues the charges for managing the public rights of way (ROWs). Sixth, it adds reporting, record keeping, and auditing requirements.

Finally, the manager's amendment modifies the definition of "cable service". It provides that this means:

"(A)(i) the one-way transmission to subscribers of (I) video programming, or (II) other programming service; and
(ii) subscriber interaction, if any, which is required for the selection or use of such video programming or other programming service; or
(B) the transmission to subscribers of video programming provided throught wireline faclities located at least in part in the public rights-of-way, without regard to delivery technology, including Internet protocol technology".

The managers amendment excepts from the term "cable service" the provision of "solely interactive on-demand services", "any video programming provided by a provider of commercial radio service provider", and "any information service".

It was approved by voice vote. However, some members of the Subcommittee were still not satisfied with this definition.

2. Definition of Cable Service. Rep. Anna Eshoo (D-CA) offered an amendment to the manager's amendment to Title I pertaining to the definition of cable service. She argued that it is not inclusive enough, and raised the matter of AT&T.

Rep. Upton argued that the amendment is unnecessary, and overreaches. He said that "I believe that AT&T is already captured" by the bill, and that Rep. Eshoo's amendment "could lead to the regulation of interactive computer services". Such services are largely unregulated as information services, but could be subjected to the regulatory regime that applies to cable services, he argued.

Rep. Dingell and Rep. Eshoo raised the matter of a April 3, 2006, letter written by Ed Whitacre to Rep. Dingell in which he asserted, among other things that "AT&T's IP-enabled video service will not be a ``cable service´´ ...".

Rep. Joe BartonRep. Barton (at left) said that Whitacre's letter was "silly". He said that under current law, AT&T is offering a cable service. Moreover, he said that the bill, as amended by the manager's amendment makes clear that AT&T's service is a cable service. Rep. Barton also took this occasion to condemn AT&T's related petition pending with the FCC.

The Eshoo amendment failed on a roll call vote of 13-17, which broke down along party lines. All Republicans who voted, cast votes against this amendment. Two Democrats, Rep. Bobby Rush (D-IL) and Rep. Charles Gonzalez (D-TX), also voted against this amendment. Rep. Rush is a cosponsor of the base bill, and voted with the Republican sponsors on several votes. Rep. Gonzalez represents a district in San Antonio, Texas, that is home to many employees of SBC. He too voted with the Republican sponsors on several votes. SBC is a major beneficiary of Title I of the bill.

3. Cubin Amendment. Rep. Barbara Cubin (R-WY), who represents the entirety of the sparsely populated state of Wyoming, offered an amendment that provides that "A cable programming vendor in which a cable operator has an attributable interest shall not deny a cable operator with a national franchise under this section access to video programming solely because such cable operator uses a headend for its cable system that is also used, under a shared ownership or leasing agreement, as the headend for another cable system."

Rep. Heather Wilson (R-NM), who represents the western state of New Mexico, also supported the amendment. It was approved by voice vote.

4. Build Out Requirement. Rep. Dingell and Rep. Markey offered an amendment that imposes a build out requirement on national cable franchisees.

For example, this amendment requires, in part, that "Beginning on the date that is 5 years after the effective data of a cable operator's national franchise under this section for a franchise area and every 3 years thereafter, if in the portion of the franchise area where the cable operator is offering cable service at least 15 percent of the households subscribe to such service, the franchising authority in the franchise area may require the cable operator to increase by 20 percent the households in the franchise area to which the cable operator offers cable service by the beginning of the next 3-year interval, until the cable operator is capable of providing cable service to all households in the franchise area."

Rep. John DingellRep. Dingell (at left) and Rep. Markey called this an anti-redlining amendment. They argued that service providers with national franchises will only serve rich people if they are not also required to build out their networks to serve people in poor neighborhoods.

Rep. Rush represents an urban district on the south side of Chicago, 65.2% of which is black, and 19.7% of which lives in poverty. See, National Journal's Almanac of American Politics 2006, at page 561. He said that "I live among these people", and that build out regulation is not the best way to promote deployment of new services.

Rep. John Shimkus (R-IL), who represents a partly rural district in downstate Illinois, argued during this debate, as he did at other times during the meeting, that the bill should not be written in a manner that discourages investment in the construction of new facilities.

Rep. Dingell said with sarcasm that "We have heard that Wall Street won't like it. And that  is terrible."

Rep. Upton argued that many services providers will not go into certain areas, and particularly areas that include a rural component, if they are subjected to build out requirements. Rep. Marsha Blackburn (R-TN) gave the example of how build out requirements have harmed a company, and its would be customers, because of build out requirements.

Rep. Barton said that this amendment "really goes to the heart of the bill". He said, "I believe that markets work." He continued that build out requirement make sense if there is a single monopoly service provider, but not in a system based upon competition.

Rep. Gonzalez argued that a build out requirement would be the end of new start up cable providers. Rep. Markey argued that the Subcommittee should then approve an amendment that exempts service providers with a market capitalization of less than $10 Billion from any build out requirement. Rep. Gonzalez responded that you "are on to something". Rep. Markey suggested that this sort of exemption might be revisited at the full Committee mark up.

This amendment was rejected on a roll call vote of 11-22.

5. Franchise Fees of National Franchisees. Rep. Mike Bilirakis (R-FL) offered an amendment that revises the language of the base bill regarding franchise fees. It states that "A cable operator authorized under this section to provide cable service in a franchise area shall pay to the franchising authority in such franchise area a franchise fee of up to 5 percent (as determined by the franchising authority) of such cable operator's gross revenues from the provision of cable service under this section in such franchise area, in accordance with section 622 and the definition of gross revenues in this section."

It was approved by voice vote.

6. Annual FCC Reports on Cable Service. Rep. Bart Stupak (D-MI) offered an amendment that would require the FCC to prepare annual reports on cable service. He initially withdrew it, subject to permission to offer it later. He again offered it later in the day. It was approved by unanimous voice vote.

7. ROW Dispute Resolution. Rep. Dingell offered an amendment regarding rights of way dispute resolution. Rep. Upton opposed it, arguing that it would strip the FCC of authority, and enable cities to obstruct FCC enforcement of the act. It failed on a roll call vote of 14-16.

8. Consumer Protection. Rep. Mike Doyle (D-PA) offered an amendment regarding consumer protection. Rep. Chip Pickering (R-MS), who was presiding at the time, offered to work with Rep. Doyle on this issue. Rep. Doyle withdrew his amendment.

9. Program Access. Rep. Rick Boucher (D-VA) offered an amendment that would apply program access requirements to both satellite and terrestrial. He argued that because of this terrestrial "loophole ... the law in its current form is not working satisfactorily", especially in getting sports programming in rural areas. Rep. Ed Whitfield (R-KY), who, like Rep. Boucher, represents a largely rural district, praised the amendment, and voted for it. Rep. Pickering opposed the amendment, arguing that current law is a "terrestrial investment in localism" provision. The amendment failed on a roll call vote of 10-20.

10. Ownership Protectionism. Rep. Frank Pallone (D-NJ) offered an amendment that would prohibit foreign ownership or control of a national cable franchise. Rep. Upton raised the subject of whether or not this amendment might violate existing trade agreements. Rep. Gonzalez cautioned that "if that is the way we treat them, that is the way they will treat us". The amendment failed by a vote of 9-19.

11. State Consumer Protection Authority. Rep. Jay Inslee (D-WA) offered an amendment that would give state attorneys general consumer protection enforcement authority. Rep. Barton stated that the amendment, if adopted, would give the House Judiciary Committee (HJC) jurisdiction over the bill, and asked Rep. Inslee to withdraw it. Rep. Barton added that he supports the concept of the amendment, but would like to see the sort of provision put in the bill at the House Rules Committee stage, thereby depriving the HJC any opportunity to review the bill. Rep. Inslee withdrew the amendment.

12. Closed Captioning. Rep. Inslee offered an amendment that would require closed captioning of new video services. Rep. Upton pledged to work with Rep. Inslee on this issue. Rep. Inslee withdrew the amendment.

13. Consumer Protection by FCC. Rep. Al Wynn (D-MD) offered an amendment regarding consumer protection by the FCC. He withdrew it upon receiving a pledge from Rep. Upton to work with him on this issue.

14. Child Porn. Rep. Stupak offered an amendment pertaining to child pornography. Members of both parties jumped to praise the amendment, based upon the hideousness of the crimes involved in the making of videos involving abuse of children. There was little discussion of how, if at all, the amendment might actually limit the production or distribution of child pornography.

This amendment states that the FCC "shall promulgate regulations to require a cable operator with a national franchise under this section to prevent the distribution of child pornography ... over its network."

It was approved by unanimous voice vote.

15. Public Interest Obligations. Rep. Markey offered an amendment that states as follows: "MUST CARRY.--The provision of section 614, regarding governmental intervention in the marketplace to ensure the free carriage of local commercial television stations on cable systems, shall not apply to a cable operator franchised under this section, until the Commission adopts final rules requiring specific, quantifiable public interest obligations for such television stations to fulfill as a condition of receiving a digital broadcast license." He withdrew the amendment.

16. Local Renewal Hearings. Rep. Inslee offered an amendment that would allow local franchising authorities to compel national franchisees to submit to a local hearing at the time of renewal of a national franchise. The amendment does not confer any authority upon the local authority, other than to hold a hearing. Rep. Upton accepted the amendment, "with some reluctance". It was approved by unanimous voice vote.

17. Spoof Amendment. Rep. Markey offered the last amendment to Title I of the bill (regarding national video franchises). It also relates to Title II (regarding network neutrality). He offered it in an effort to use humor for debating purposes.

Rep. Markey and others argue that the Title II provisions giving the FCC adjudicatory authority to enforce its policy statement regarding network neutrality are insufficient. So, he drafted an amendment that would revise current law regarding video programming access with a regulatory regime like that contained in Title II.

The amendment states that "In lieu of the legally-enforceable, pro-consumer and pro-competitive provisions of Section 628, the Commission is directed to adopt a broadly-worded, imprecise policy statement of principles about the benefits of video programming access by competitors. The Commission shall have the ability to enforce such vague statement of policy principles, but shall not be permitted to implement such principles in to more effective rules."

Rep. Markey joked that he has warmed to the views of AT&T and SBC on the network neutrality issue. He added that he has drunk the cool aid. So, he jested, their access to video programming ought to be subject to the same sort of vague policy statement protection, that the bill affords consumers and content providers in accessing their broadband networks.

He then withdrew this amendment.

18. Manager's Amendment to Title II. Rep. Upton offered a manager's amendment to the network neutrality title of the bill. For the purposes of FCC adjudicatory proceedings on complaints that allege violation of the FCC network neutrality principles, it sets a maximum penalty of $500,000. It also requires the FCC to complete its proceedings within 90 days of receipt of a complaint. It further authorizes the FCC to issue compliance orders. It also authorizes the FCC to write procedural rules regarding the conduct of complaint proceedings.

It provides, in part, that the FCC "shall have exclusive authority to adjudicate any complaint alleging a violation of the broadband policy statement and the principles incorporated therein. The Commission shall complete an adjudicatory proceeding under this subsection no later than 90 days after receipt of the complaint. If, upon completion of an adjudicatory proceeding pursuant to this section, the Commission determines that such a violation has occurred, the Commission shall have authority to adopt an order to require the entity subject to the complaint to comply with the broadband policy statement and the principles incorporated therein."

It was adopted by voice vote.

19. Network Neutrality. Rep. Markey, Rep. Boucher, Rep. Eshoo, and Rep. Inslee offered an amendment containing a broader network neutrality mandate.

It failed on a roll call vote of 8-23.

See, story titled "House Subcommittee Rejects Network Neutrality Amendment", in this issue.

20. Advanced Internet Communications Services Act. Rep. Cliff Stearns (R-FL) and Rep. Boucher offered an amendment that provides that the FCC has exclusive authority regarding advanced internet communications services. They promoted their stand alone bill on the same topic.

On January 4, 2005, Rep. Stearns and Rep. Boucher introduced HR 214, the "Advanced Internet Communications Services Act of 2005". This is a reintroduction of a bill from the 108th Congress, HR 4757, the "Advanced Internet Communications Services Act of 2004". For a summary of the Stearns Boucher bill, see story titled "Rep. Stearns and Rep. Boucher Introduce VOIP and Internet Regulation Bill" in TLJ Daily E-Mail Alert No. 935, July 12, 2004.

Rep. Stearns withdrew the amendment.

This completed the amendments pertaining to Title II of the bill. The Subcommittee proceeded to amendments to Title III of the bill, regarding extending E911 regulations to VOIP service providers. There was no managers' amendment for this title.

21. Gordon Amendment. Rep. Bart Gordon (D-TN) offered an amendment regarding Title III. TLJ did not obtain a copy, and hence, offers no description of it here. It was approved by unanimous voice vote.

22. VOIP and Alarm Monitoring Services. Rep. Stearns offered an amendment regarding VOIP service and alarm monitoring.

It provides, in part, that "Prior to installation or number activation of VOIP service for a customer, a VOIP service provider shall give clear and conspicuous notice to the customer that to ensure proper functioning of alarm, security, and personal emergency response system monitoring services -- (1) the customer's alarm, security and personal emergency response system must be tested, and the customer's alarm, security, and personal emergency response provider must be notified, after VOIP service is installed ..."

Rep. Elliot Engel (D-NY) and Rep. Ed Towns (D-NY) offered their support. Rep. Upton offered to work with Rep. Stearns on this issue, and asked that the amendment be withdrawn.

Rep. Stearns withdrew the amendment.

23. VOIP Intercarrier Compensation and USF Contributions. Rep. Stupak offered an amendment that would extend intercarrier compensation and universal service contribution obligations to VOIP service providers.

Rep. Boucher praised Rep. Stupak for offering the amendment, and used the occasion to promoteHR 5072, the "Universal Service Reform Act of 2006", which Rep. Boucher and Rep. Lee Terry (R-NE) introduced on March 30, 2006.

Rep. Upton said that this is not a universal service bill, and asked Rep. Stupak to withdraw the amendment.

Rep. Pickering said that this issue should be addressed, "but this is not the time or the bill to do this".

"I don't see it being hooked up to this bill", said Rep. Upton. However, he added that "if the Senate does add it we will have to deal with it at that point."

Rep. Stupak then withdrew the amendment.

24. VOIP Service Providers' Rights and Obligations Under §§ 251 and 252. Rep. Pickering offered an amendment regarding the rights of VOIP service providers.

It provides, first, that "A facilities-based VOIP service provider shall have the same rights, duties, and obligations as a requesting telecommunications carrier under sections 251 and 252 ... if the provider elects to assert such rights."

It further provides that "A VOIP service provider that is not a facilities-based VOIP service provider shall have only the same rights, duties and obligations as a requesting telecommunications carrier under sections 251(b), 251(e), and 252, if the provider elects to assert such rights."

This amendment leaves to the FCC the task of defining the term "facilities-based VOIP service provider".

The amendment was approved by unanimous voice vote.

25. Access to ROWs. Rep. Stearns offered an amendment regarding access to public rights of way. Rep. Stearns argued that it would ensure that new entrants would have ready access to ROWs. Rep. Upton stated that is was not germane. Rep. Stearns withdrew it.

26. Legacy Regulation of VOIP Service. Rep. Inslee and Rep. Engel offered an amendment that imposes upon VOIP service providers the regulatory regime for telecommunications for deaf and hearing impaired services.

Rep. Inslee stated that this requirement only applies to services that are a replacement for telephone service.

He inaccurately described the contents of his amendment. It states that "A VOIP service provider shall have the same rights, duties, and obligations as a telecommunications carrier under sections 225, 255, and 710. In revising the Commission's regulations under such sections to carry out this subsection, the Commission shall consider whether a service or equipment is marketed as a substitute for telecommunications service, telecommunications equipment, customer premises equipment, or telecommunications relay services."

Rep. Upton stated that he accepted the amendment.

Rep. Barton then expressed his displeasure at not have been given a copy of this amendment beforehand, and his opposition to the content of the amendment. He added that he would not interfere with any commitment that Rep. Upton had made to Rep. Inslee and Rep. Engel. "You are the Subcommittee Chairman. This is your mark up." However, he added that "I would like to point out the obvious. I chair the full Committee."

Rep. Upton said then that there may be a manager's amendment at the full Committee mark up that removes this amendment.

Basically, Rep. Barton said that VOIP "is a different animal" from telephone service. He expressed opposition to imposing old regulatory regimes on new internet services. "I don't think this bill is about reinventing regulation", said Rep. Barton. He added that this amendment "would be burdensome, to say the least, to implement".

Rep. Barton sat in silence, with his hand on his mouth, when the Subcommittee approved this amendment by unanimous voice vote.

27. White Space Study. Rep. Inslee offered an amendment that would require the FCC and NTIA to conduct a "band-by-band analysis of the usage of spectrum to identify any bands that are not being used efficiently".

Rep. Upton said that it was not germane. Rep. Inslee withdrew it.

28. Tying by Broadband Service Providers. Rep. Boucher offered an amendment that provides that "A broadband service provider shall not require a subscriber, as a condition on the purchase of any broadband service the provider offers, to purchase any other cable service or telecommunications service offered by the provider."

Rep. Boucher argued that consumers should be able to purchase broadband service as a stand alone service.

Rep. Upton accepted the amendment. It was approved by unanimous voice vote.

Franchising Parity. Rep. Pickering did not offer an amendment pertaining to franchising parity, when there are two or more service providers in one area. However, he stated that he had considered doing so, and that he might offer such an amendment later.