May 22, 2006

First, while the bill ostensibly preserves local franchising authority, the net effect is that it strips local authority and grants it to the FCC to determine virtually all franchise terms by rulemaking, requires that a franchise be granted by federal law within 30 days of a broadband-video provider filing an application, and places an unreasonable and what we believe for most cities and counties will be an unattainable mandate that localities must act within 15 days. The consequence for not acting within 30 days of application is that the bill “federalizes” local video franchising and eliminates the 1% fee for Public, Educational, and Government (PEG) access channels used to carry local programming and appropriate institutional network (I-Net) obligations for government and emergency communications.

Second, as crafted, the bill would send all rights-of-way disputes to the FCC, not the courts, which is the current practice. Communities, large and small, would be placed in the difficult position of reaffirming their rights-of-way management and practices by satisfying a set of hurdles, at least six in the current draft, before the FCC. Furthermore, if the provider wins, the local community would be required to pay the costs and attorneys fees of the broadband-video provider. The bottom-line is that the FCC is granted the authority to oversee and second-guess not only the general police powers of the community, but the policies and engineering practices of public works departments nation-wide – a federal agency that has never had the authority to regulate local public rights-of-way and has no expertise concerning local streets, sidewalks, public safety and traffic patterns.

Third, this bill abandons commitments to keep localities financially whole in the rewrite of the video franchising process by excluding advertising and other non'subscriber revenues from the current 5% franchise fee. In addition, many communities have made the decision in their local franchises to obtain more than 1% worth of PEG and I-Net support for needs such as fire, police, and other governmental communications, and in those communities, local programming and emergency communications would be diminished as a result of this bill. The pledge to keep localities financially whole would be further marginalized by preemption language that does not allow localities to conduct franchise fee audits.

Fourth, while the draft ostensibly prohibits economic redlining through the use of the current Cable Act, it allows providers of the broadband-video services to use the public rights-of-way in a community, but pick and choose which neighborhoods they wish to serve while bypassing all others completely.

Fifth, it appears that the bill fails to protect locally-imposed telecommunications taxes as well as any state-imposed telecommunications taxes that are not imposed in lieu of rights-of-way compensation.