ACTION ALERT: Local Government: Partner in Promoting Video Competition
September 12, 2005
Local government strongly endorses promoting competition for all consumers and treating like services alike. The elected leaders of our nation's cities and counties stand ready and willing to welcome video competition in their communities. Nationalizing franchising, however, would limit the benefits of head-to-head video competition to a chosen few, and would cause chaos in streets across the country.
Before Congress acts, it should consider:
States where statewide or simplified franchising is currently in place do not see greater or faster video competition deployment.
Franchises do not just provide permission to offer video services, they are the core tool local government uses to manage streets and sidewalks, provide for public safety, enhance competition, and to collect compensation for private use of public land. Eliminating franchises will cause chaos and deprive local government of the power to perform its basic functions.
Competition is for everyone. Current national policy implemented through franchises encourages competition throughout the country, not just in urban or suburban areas and not just for the wealthy. In less than 10 years, under the current system, broadband service has been made available to 91% of all homes passed by cable.
Congress should not try to manage local streets and sidewalks from Washington; national franchising would abrogate a basic tenet of federalism by granting companies access to locally owned property.
Content deals, not local government, stands in the way of new video service offerings. Companies have not yet seriously dedicated resources to negotiate franchises in most markets. Potential video competitors require relatively few franchises to implement their announced business plans (for SBC 1,500-2,000 franchises, for Verizon 100-200 franchises).
Concerns with Current Bills
Video Choice Act -- S. 1349 (Smith/Rockefeller) and H.R. 3146 (Blackburn/Wynn)
<0x2022> Without a franchise agreement, many of the important mechanisms that local government uses to manage their rights of way, ensure competition for everyone, and collect franchise fees are eliminated.
<0x2022> The bills do not allow local government to obtain support funding for public educational and governmental (PEG) channels or to obtain Institutional networks for local government needs such as fire, police, or other government workers.
<0x2022> While the bills prohibit economic redlining against poorer citizens, they remove any enforcement of the provision.
Broadband Investment and Consumer Choice Act -- S. 1504 (Ensign/McCain)
The bill would immediately abrogate all existing local franchise agreements. The new provisions would be applicable to all video service providers, both existing cable companies and new entrants.
Although the bill retains the current five percent gross revenue cap on franchise fees, it limits the revenues from these fees in two ways: 1) by limiting these fees to the cost of managing the rights-of-way; and 2) providing four-and-a-half pages of exceptions to what can be included in the gross revenue costs, gutting existing contractual agreements.
The bill prohibits municipalities from charging fees for issuing construction permits needed to install or upgrade facilities.
Under the bill, video providers would be required to offer only four public educational and governmental (PEG) channels, far below what many communities utilize today.
The municipal broadband provisions would impose additional layers of useless bureaucracy and procedure on local government and hamper broadband deployment. Existing municipal deployments would be frozen.
The bill would remove the law that ensures cell phone towers, like all other towers, are subject to local zoning laws.
For more information on The United States Conference of Mayors campaign to protect local telecommunications franchise authority, contact Ron Thaniel, Assistant Executive Director, at 202-861-6711 or rthaniel@usmayors.org.
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