Washington, D.C. - Congresswoman Hilda L. Solis (CA-32) offered build out amendment at the Energy and Commerce Committee Telecom markup hearing. Solis is a member of the House Committee on Energy.

“Mr. Chairman, I have an amendment at the desk.  It’s amendment “Build” #002.

“The amendment I’m offering, along with Mr. Dingell and Mr. Markey, would bring the benefits of enhanced competition to all consumers by requiring a phased-in build-out of services based upon market forces.

“Without this amendment, many neighborhoods will not share in cable competition and will risk seeing worse service and higher prices for their existing cable service.

“History has shone us that redlining is not just a theory, but a reality. Evidence of redlining has been documented across the country, including my own state of California.

“In the late 1990s, executives at WorldCom promised the California Public Utilities Commission that it would provide service to low-income and low-usage customers.

“However, at a September 1998 “MCI WorldCom Launch Meeting” told investors that the newly-formed entity would be marketing only to upper-end, high value consumers, and that thorough pricing minimums” would “discourage low spending customers.”

“I continued to be stunned by the lack of digital access found in schools, libraries, and homes in areas of my own district, which includes East Los Angeles.

“In a filing made to the FCC this past February, numerous civil rights and minority telecommunications groups, including the Leadership Conference for Civil Rights and the League of United Latin American Citizens, stated that “absent effective measures to prohibit the practice, redlining will very likely occur even in a competitive cable and video services market.”

"That is why we must take action to prevent redlining by new entrants to the video marketplace.

“Our amendment is based upon the simple premise in communications policy that in return for public rights-of-way privileges in a community, all of the public should benefit.

“Currently the bill contains a provision that purports to prevent discrimination, but it is too weak and has several flaws:

“First, it could result in the cable operator self-selecting its franchise area boundaries, so if the company chose Beverly Hills, it must not deny service to any Beverly Hills resident, but has no obligation to serve East Los Angeles.

“Second, it only prohibits income-based denials, allowing discrimination on race, ethnicity, national origin and other factors.

“Third, it only addresses denial of access, leaving companies able to provide unequal service, upgrades, and repairs.

“Fourth, it requires the Federal Communications Commission (FCC), with little experience in civil rights issues, not localities, to handle all complaints.

“Fifth, it appears to require proof of discriminatory intent, rather than the impact standard of traditional civil rights laws.

“Sixth, even if a violation is found, it offers no assurance of how quickly the affected consumers will be served. The legislation actually could harm many communities.

“The bill not only fails to ensure universal benefits, but also allows existing cable companies to walk away from their current contractual commitments, so long as another company serves just one customer in the franchise area.

“At our hearings, a cable industry representative testified that the industry could not pledge (1) they would not withdraw service in certain areas, (2) they would not target service upgrades only to competitive neighborhoods, or (3) they would not increase rates in some areas to subsidize lower rates in competitive areas.

“Our buildout amendment would continue a longstanding policy of ensuring that the benefits of using public rights-of-way extend to all of the public. It creates a level playing field, using policies similar to those that currently govern the cable industry.

“It has no service requirements for five years; later, buildout is phased in for that franchise area only if the company’s service has been subscribed to by 15 percent of the households it reaches.

“Consumers Union, the Consumer Federation of America, Free Press, U.S. PIRG, the Mexican American Legal Defense and Education Fund (MALDEF), the National Hispanic Bar Association, the National League of Cities, the National Conference of State Legislators, the U.S. Conference of Mayors, and numerous other groups strongly support this amendment.

“We all share the hope that enhanced competition will bring benefits to consumers.

But mere hope is not enough to bring benefits to all our constituents. Nor is the weak anti-discrimination provision in the bill sufficient.

“I urge you to support our amendment. Thank you.”