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Time Log of the Audio:
00:00:00 Chairman's Welcome
00:00:08 Secretary's Agenda report
00:01:06 Media Bureau: Statistical Report on Average Rates for Cable Service, Cable Programming Service, and Equipment
00:05:12 Comments of Commissioner Michael J. Copps
00:08:08 Comments of Commissioner Jonathan S. Adelstein
00:11:10 Comments of Commissioner Deborah Taylor Tate
00:12:49 Comments of Commissioner Robert M. McDowell
00:14:04 Comments of Chairman Kevin J. Martin
00:17:05 Vote 5 to 0 to adopt
00:17:13 [END]
The following (all in PDF format) are related to the Commission's 2005 cable rate report action on December 20th:
FCC 2005 Report on Cable Industry Prices
FCC News Release
Chairman's Statement
Copps' Statement
Adelstein's Statement
McDowell's Statement
00:17:17 Media Bureau: Implementation of Section 621(a)(1) of the Cable Communications Policy Act of 1984 as amended by the Cable Television Consumer Protection and Competition Act of 1992
00:17:41 Staff report
00:25:13 Comments of Commissioner Michael J. Copps
00:31:51 Comments of Commissioner Jonathan S. Adelstein
00:46:17 Comments of Commissioner Deborah Taylor Tate
00:51:49 Comments of Commissioner Robert M. McDowell
00:59:24 Comments of Chairman Kevin J. Martin
01:08:14 Vote 3 to 2 to adopt (Commissioners Copps and Adelstein voting against adoption)
01:08:23 [END]
The following (all in PDF format) are related to the Commission's Telco entry action on December 20th:
FCC News Release
Chairman's Statement
Copps' Statement
Adelstein's Statement
Tate's Statement
McDowell's Statement
The following was written by John Pestle of
Varnum, Riddering, Schmidt & Howlett LLP following the Commission's meeting on December 20th: For those returning from the holidays or wanting an overview, here is a summary of and observations on the FCC's December 20 order on cable franchising.
Over strong municipal opposition, opposition from key Congressional leaders (e.g.--John Dingell) and dissents by its two Democratic members, the Federal Communications Commission announced its cable franchise rules on that date. If upheld, they will severely affect municipalities and their residents by preventing municipalities from requiring that all residents get cable service and by apparently requiring that in-kind services and financial support for public, educational and government channels be deducted from the 5% franchise fee municipalities get. Currently such items are in addition to the 5% fee. A brief summary and explanation is as follows. Note that the rules will be appealed, and might be stayed during an appeal.
First, although the FCC voted to adopt the new rules on December 20, all the FCC issued on that date was a 2 page press release summarizing the rules--the order and rules themselves (likely totaling 20 or 30
pages) will not be issued until sometime in the next few weeks, possibly as early as this week or next. So although the broad outlines are known, the specifics and answers to many important questions are not known for sure now, and won't be known until the rules appear, at the earliest.
The new rules are focused on quickly getting phone companies into the cable business. But a key point is that the FCC is proposing to apply them to current cable companies, as well, with the main issue apparently being whether they should apply immediately or when the cable company's current franchise expires. For many reasons (see below) this appears to be well beyond the FCC's authority to implement.
It appears that the principal points in the new rules are as follows:
- The "shot clock"--Communities have 90 days to reach agreement on a cable franchise with phone companies, or other new cable providers that have a current right to use the streets (180 days with all others)
- A cable franchise is automatically granted if the community and new provider cannot reach agreement within the 90/180 day time period.
- "Build out" requirements in franchises which require cable service to all residents, or all those in areas with a certain population density are preempted, as being anti-competitive.
- Fees to support PEG channels and the value of certain in-kind services could be deducted from the 5% franchise fees communities get. Currently such items are in addition to the 5% fee.
- Requirements for PEG channels and for I-Nets (telecommunications networks provided by cable companies for municipal use) will be restricted in unspecified ways.
- In a provision addressing those states which have shifted to statewide cable franchising in recent years, the new rules will not apply to franchises issued by states or in compliance with state statutory directives.
The new FCC rules apply to cable companies and cable service, so whether or how they will apply to AT&T, which has argued for years that its new service is a "video service" and not a cable service, is unclear.
Finally, the FCC has started a new rulemaking to determine when its new rules should apply to existing cable franchises. It has tentatively concluded that they should apply only when the franchise is renewed, not immediately (in other words, "grandfathering"). The cable industry will likely press for immediate application of them. The rulemaking answering this question is to be completed this summer.
We will provide more information about the rules when they are actually issued.
Legally the FCC rules go well beyond its authority, violate numerous provisions of the Federal Cable Act, and will be challenged in court. A dissent from the FCC decision noted many of the legal problems with the order. Among them are the following:
(1) the jurisdictional issue that in the Cable Act Congress gave the courts, not the FCC, the exclusive authority to address "unreasonable" denials of second or subsequent cable franchises (the FCC apparently grounds its authority for the order in the need to prevent unreasonable denials by municipalities),
(2) the direct conflict with the Cable Act's requirement for cable operators to get a franchise before providing service,
(3) the Act's placing with municipalities, not the FCC, the authority to decide cable franchise terms,
(4) the Congressional exclusion of in-kind services and capital grants for public, educational and school channels from being deducted from the 5% cable franchise fee,
(5) the absence in the record of facts to support the FCC's conclusions, and the FCC's violation of its own rules on providing notice to municipalities of factual assertions in the record regarding them, in order that municipalities may correct errors (there appear to be many such errors, on key points),
(6) the contradiction between FCC's apparent conclusion that the actions it addresses are OK if required by state cable franchises, but prohibited if undertaken by municipalities
(7) the 10th Amendment (states rights) as recently used by the courts to reign in Federal actions, because the FCC would be impermissibly treading on local turf, and blurring the lines of political accountability (public unsure as to which unit of government to hold responsible for poor franchise terms, lack of build out requirements and the like).
We have been assisting municipalities nationwide on cable and telecom issues (most recently, municipal Wi-Fi) for many years. In recent years this has involved opposing phone company efforts to overturn local cable franchising, which included assisting the National Association of Telecommunications Officers and Advisors in preparing a model form of comments for municipalities to submit to the FCC in this rulemaking.
John Pestle
Varnum, Riddering, Schmidt & Howlett LLP
Page updated January 3, 2007 |
