By Ron Thaniel
December 20, 2006

In response to what the Congress was not able to do for the telecommunications industry, especially the big phone companies, the Federal Communications Commission (FCC) is expected to approve an order December 20. This order undermines local franchising authority and enforcement, threatens local budgets, and limits the benefits of broadband video competition to a few well-to-do neighborhoods. Efforts to nationalize video (cable) franchising in the 109th Congress were defeated by a coalition of local government associations and interests, led by The U.S. Conference of Mayors.

In a December 12 letter to the FCC, the Conference of Mayors urged the Commissioners to reject the order being circulated by FCC Chairman Kevin J. Martin. Joining the Conference of Mayors on the letter were the National Association of Counties, the National League of Cities, and the National Association of Telecommunications Officers and Advisors.

The coalition of local government associations wrote: “Title VI of the Communications Act does not provide the Commission the legal authority to take action in changing the way cable franchises are granted without explicit Congressional approval.” Other key concerns raised in the letter were:

• Title VI does not permit a fixed deadline on local franchising authority action. While the order has not been made public, news organizations have reported that the order will force local governments to negotiate within 90 days a franchise agreement with companies that have a preexisting right to a local government’s rights-of-way, even if that right is not related to the provision of cable services. The order would impose 180-day limit with companies that don’t have a preexisting right. If an agreement is not reached, the provider has the right to go ahead and provide service. The coalition wrote, “We believe that a fixed deadline would provide no incentive for new providers to work toward a local franchise agreement because they would have access to the public right-of-way without local oversight if they simply wait out the timeframes.”

• The order would require the cost of any in-kind benefits, such as I-Nets, as well as any monetary payments other than the franchise fee, to be offset against the 5 percent franchise fee. The coalition noted: “In virtually every instance, this would be a significant net fiscal loss to the local franchising authority.”

• The order would allow new providers the use of public rights-of-way in a city but pick and choose which neighborhoods they wish to serve while bypassing all others completely. To this point, the coalition wrote, “The most widely and quickly deployed broadband networks are owned by the cable industry – the very industry that has complied with local build-out requirements.”

As U.S. MAYOR heads to press, the Conference of Mayors is not hopeful that the order preempting local franchising will be pulled from the FCC’s December 20 meeting agenda. In response, the Conference is reviewing legal options aimed at preserving local video franchising authority. To view the letter, go to the Conference’s website at usmayors.org.