Order Code RL33630
CRS Report for Congress
Received through the CRS Web
A Comparison of the Cable Franchising
Provisions in House-Passed H.R. 5252 and in
H.R. 5252 as Amended by the
Senate Commerce Committee, 109th Congress
August 29, 2006
Charles B. Goldfarb
Specialist in Industrial Organization and Telecommunications Policy
Resources, Science, and Industry Division
Congressional Research Service ˜
The Library of Congress
A Comparison of the Cable Franchising Provisions in
House-Passed H.R. 5252 and in H.R. 5252 as
Amended by the Senate Commerce Committee,
109th Congress
Summary
H.R. 5252, the Communications Opportunity, Promotion, and Enhancement
(COPE) Act of 2006, was passed by the House, and subsequently was amended in the
nature of a substitute by the Senate Commerce Committee. Both versions of H.R.
5252 include provisions that seek to foster competitive entry into the cable television
market by streamlining the process by which new entrants obtain a franchise to offer
service. Both would expand the authority of the Federal Communications
Commission (FCC) to set and enforce streamlined requirements, though the Senate
version would allow local franchise authorities to retain greater authority.
Under the House version, an applicant would apply to the FCC for a national
franchise, identifying the local areas it intended to serve. In contrast, under the
Senate version, which was originally introduced as S. 2868 and which renames the
legislation the Advanced Telecommunications and Opportunities Reform Act, an
applicant would apply directly to the local franchise authority for a franchise, though
the application form, itself, as well as most of the requirements, would be crafted by
the FCC. In each case, when certain conditions have been met, incumbent cable
service providers also would be eligible to use the new, simplified franchise
procedures and requirements.
Under each version, the FCC is instructed to issue a number of national rules
and is given certain enforcement and appeals responsibilities, but local franchise
authorities retain authority over management of rights-of-way. Each version would
eliminate a number of the requirements currently imposed on cable operators in Title
VI of the Communications Act. But there also are many significant differences in
these bills. Both versions include provisions relating to:
! the eligibility of new entrants and of existing cable providers for the
streamlined franchising procedures;
! certification, application, and notification requirements;
! the identification of the geographic areas covered by the franchise;
! renewal and revocation procedures;
! franchise fees;
! public, educational, and governmental (PEG) channels;
! institutional networks;
! financial support for PEG channels and institutional networks;
! rights-of-way authority and management;
! national consumer protection and customer service standards;
! procedures for consumer protection and customer service complaints
and appeals; and
! redlining prohibitions.
However, each version has different requirements in each of these areas.
This report will be updated as warranted.
Contents
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Certification, Application, and Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Identification of Each Franchise Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Renewal and Revocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Franchise Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
PEG Channels and Institutional Networks . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Audits Relating to Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Rights-of-Way . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Consumer Protection and Customer Service . . . . . . . . . . . . . . . . . . . . . . . . 17
Redlining and Buildout . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Miscellaneous Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
List of Tables
Table 1: Side-by-Side Comparison of Major Cable Franchising Provisions in
House-Passed H.R. 5252 and in H.R. 5252 as Amended by the
Senate Commerce Committee, 109th Congress . . . . . . . . . . . . . . . . . . . . . . . 4
A Comparison of the Cable Franchising
Provisions in House-Passed H.R. 5252 and
in H.R. 5252 as Amended by the Senate
Commerce Committee, 109th Congress
Overview
On June 8, 2006, H.R. 5252, the Communications Opportunity, Promotion, and
Enhancement (COPE) Act of 2006, was passed by the House. Subsequently, that
legislation was amended in the nature of a substitute by the Senate Commerce
Committee; that amended version was released on August 4, 2006. Both versions of
H.R. 5252 include provisions that seek to foster competitive entry into the cable
television market by streamlining the process by which new entrants obtain a
franchise to offer service. Both would amend the Communications Act 1 in important
ways. Both would expand the authority of the Federal Communications Commission
(FCC or Commission) to set and enforce streamlined requirements, though the Senate
version would allow local franchise authorities to retain greater authority.
Under the House version, an applicant would apply to the FCC for a national
franchise, identifying the local areas it intended to serve.2 In contrast, under the
Senate version, which was originally introduced as S. 2686 and which renames the
legislation the Advanced Telecommunications and Opportunities Reform Act, an
applicant would apply directly to the local franchise authority for a franchise, though
the application form, itself, as well as most of the requirements, would be crafted by
the FCC.3 In each case, when certain conditions have been met, the incumbent cable
service providers also would be eligible to use the new, simplified franchise
procedures and requirements.
1 47 U.S.C. 541 et seq.
2 Other provisions in the COPE Act address enforcement of the principles incorporated in
the FCC’s broadband policy statement, the obligations and rights of providers of voice over
internet protocol (VoIP) service, municipal provision of broadband services, mandatory
provision of stand-alone broadband access service, and the development of seamless
mobility.
3 Other provisions in the Advanced Telecommunications and Opportunities Reform Act
address call home and interoperability requirements related to the war on terrorism,
universal service reform and interconnection, municipal provision of broadband services,
wireless innovation networks, digital television, child pornography, the internet consumer
bill of rights, low power FM radio, cellphone tax moratorium, truth in caller ID, rural
wireless and broadband service, and a number of miscellaneous issues.
CRS-2
Under each version, the FCC is instructed to issue a number of national rules
and is given certain enforcement and appeals responsibilities, but local franchise
authorities retain authority over management of rights-of-way. Each version would
eliminate a number of the requirements currently imposed on cable operators in Title
VI of the Communications Act.4 Both versions include provisions relating to:
! the eligibility of new entrants and of existing cable providers for the
streamlined franchising procedures;
! certification, application, and notification requirements;
! the identification of the geographic areas covered by the franchise;
! renewal and revocation procedures;
! franchise fees;
! public, educational, and governmental (PEG) channels;
! institutional networks;
! financial support for PEG channels and institutional networks;
! rights-of-way authority and management;
! national consumer protection and customer service standards;
! procedures for consumer protection and customer service complaints
and appeals; and
! redlining prohibitions.
However, each version has different requirements in each of these areas. Most of
these differences have to do with the degree of state and local vs. federal authority,
with the Senate version leaving more authority in the hands of state and local
jurisdictions. For example, in both versions, consumer protection and customer
service regulations would be promulgated by the FCC, and appeals of any local
franchising authority orders in this area would be made to the FCC. But in the Senate
version, those regulations would be enforced by the local franchising authority, which
may refer a matter for enforcement to the state attorney general or state consumer
protection agency on a case-by-case basis. In contrast, in the House version, a person
may file a complaint either with the local franchising authority or with the FCC, and
any local franchising authority order would be enforced by the FCC. Similarly, in the
4 For example, both versions would eliminate Sec.621(a)(4)(A), the so-called “build-out”
provision, which states that “[i]n awarding a franchise, the franchising authority shall allow
the applicant’s cable system a reasonable period of time to become capable of providing
cable service to all households in the franchise area.” Without this provision, there are no
build-out requirements for franchisees.
CRS-3
House version enforcement of the redlining (anti-discrimination) provision would be
performed by the FCC, while in the Senate version such enforcement would be
performed by the state attorney general.
Table 1 compares the major franchising provisions in the bills. It incorporates
the differences in terminology in the two versions – for example, the House version
continues to refer to “cable service” and “cable operators”, while the Senate version
refers to “video service” and “video service providers”.
Table 1 also provides the
section number that the provision would be assigned in an amended Communications
Act.
CRS-4
Table 1: Side-by-Side Comparison of Major Cable Franchising Provisions in House-Passed H.R. 5252 and in H.R.
5252 as Amended by the Senate Commerce Committee, 109th Congress
Provision
House-Passed H.R. 5252
H.R. 5252 as Amended by the Senate
Commerce Committee
Eligibility
Election
An eligible applicant may elect to obtain a national franchise to provide
cable service in a franchise area, or it may obtain a franchise from an
existing state or local franchising authority. Sec. 630(a)(1) and
(a)(4)(B).
General Franchise
Sec. 617 of the Communications Act, relating to local franchising
Sec. 617 of the Communications Act, relating to local franchising
Requirements
authority approval of the sale or transfer of a franchise, is repealed.
authority approval of the sale or transfer of a franchise, is repealed.
A video service provider may not provide video service without a
franchise. Sec. 621(a)(2).
A franchising authority may not grant an exclusive franchise. Sec.
621(a)(1)(A).
Eligibility of new
New cable providers may obtain a national franchise on the date of
The amendments to the Communications Act made by this version will
cable/video service
enactment of this law. Sec. 630(d).
take affect six months after its enactment into law. In the interim, the
providers
FCC shall initiate proceedings needed to implement the amendments
and as soon as those requirements are in place new entrants may apply
for a franchise under the new provisions. Sec. 381(a)(1) and (2).
Eligibility of existing
Existing providers of cable service may obtain a national franchise for a
Except as provided by a competition trigger, the new franchise
cable/video service
franchise area if there is a competitive provider in that franchise area.
provisions shall not apply to a cable operator with a franchise agreement
providers
Sec. 630(d).
in effect on the date of enactment. The old franchise provisions shall
continue to apply until the earlier of the expiration date of the existing
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Provision
House-Passed H.R. 5252
H.R. 5252 as Amended by the Senate
Commerce Committee
franchise agreement or the date on which a competition-triggered new
franchise agreement that replaces the existing franchise agreement takes
effect. Sec. 381(b)(1).
Competition trigger: If a franchising authority authorizes a video service
provider to provide video service in an area in which cable service is
already being provided under an existing franchise agreement, when the
new video provider commences video service in that area a cable
operator with an existing franchise may submit an application for a
franchise under the new franchise provisions. When the franchise is
granted, (i) the terms and conditions of the new franchise agreement
supersede the existing franchise agreement, and (ii) the new franchise
provisions in the Communications Act shall apply. Sec. 381(b)(2).
The old franchise provisions shall continue in effect after the date of
enactment with respect to any cable operator to which they applied
before that date until the earlier of (i) the expiration date of the franchise
agreement under which the cable operator was operating on the date of
enactment, and (ii) the date on which a new franchise agreement takes
effect due to the competitive trigger provision. Sec. 381(c).
Franchise Change If
If only one cable operator is providing cable service in a franchise area
Cable Competition
and that cable operator had obtained a national franchise when there had
Ceases
been more than one cable operator in that area, the local franchising
authority may file a petition with the FCC requesting that the FCC
terminate the national franchise for that franchise area. If the FCC finds
there is only one cable provider in that franchise area, it shall issue an
order granting the petition, which would take effect one year from the
date of such grant if no other cable operator offers cable service in that
CRS-6
Provision
House-Passed H.R. 5252
H.R. 5252 as Amended by the Senate
Commerce Committee
area during that one year. The cable operator that lost its national
franchise may obtain a franchise from the local franchising authority.
Sec. 630(b)(1)(G).
Certification, Application, and Notice
Certification/
An applicant for a national franchise must file a certification with the
An applicant for a video service franchise must file with the local
Application/
FCC that provides contact information, identification of each franchise
franchising authority a standardized application form (to be created by
Notification Process
area in which the applicant seeks authority to offer cable service, and a
the FCC). The filed application must include contact information for
declaration that it will comply with the rights-of-way requirements of
the applicant, the period for which the franchising agreement shall be in
the franchising authority in the locality for which it seeks a franchise
effect, the physical location of the headend (or its equivalent), and a
and the consumer protection and customer service rules adopted by the
description of the video service to be provided. It also must include a
FCC. Sec. 630(a)(2) and (3).
signed declaration that the applicant agrees to comply with all
applicable federal and state statutes and regulations and all applicable
On the day of filing a national certification for a franchise area, the
municipal regulations and police powers regarding the use of rights-of-
applicant must transmit a copy of the certification to the local
way, and geographically identifying the franchise area in which it
franchising authority for that area. Sec. 630(a)(4)(A).
intends to offer cable service. Sec. 603(a)(1) and (2) and 612(a)-(c).
The application form also must include blank spaces, to be filled in by
the franchising authority, for the franchise fee percentage; the number
of public, educational, and governmental (PEG) access channels to be
provided; the percentage fee to support PEG access facilities and
institutional networks; and the franchising authority’s point of contact.
Sec. 603(a)(1).
The franchising authority must publish public notice of receipt of a
complete application within 15 days if public notice is required by state
or local law. The franchising authority must complete the information it
is required to add to the application form and return the form to the
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Provision
House-Passed H.R. 5252
H.R. 5252 as Amended by the Senate
Commerce Committee
applicant within 90 days. A franchising agreement shall take place 15
calendar days after the date that the completed application is received by
the applicant unless the applicant notifies the franchising authority
within those 15 days that the terms offered are not accepted. Sec.
603(a)(3) and (4).
Application Deemed
A national franchise shall be effective within 30 days of the date of the
If a franchising authority fails to act within the 90-day period on a
Approved/ Date of
filing of a completed certification, for a term of 10 years. Sec.
franchise application that meets the requirements, the franchise
Effect and Duration
630(b)(1) and (2)(A).
application shall be deemed granted:
effective on the 91st day;
for a term of 15 years;
with a franchise fee set at the same percentage of gross revenue as that
paid by the cable operator with the most subscribers in the franchise
area, or if there is no cable operator offering cable service in the
franchise area, with a franchise fee of 5 percent of gross revenue;
with an obligation to provide the number of PEG use channels required
by Section 611 of the Communications Act. Sec. 603(b).
A franchising authority may grant a franchise for a term of 5 to 15
years. Sec. 621(a).
Identification of Each Franchise Area
Identification of Each
The applicant must identify each franchise area in which it intends to
The applicant must geographically identify in its application the
Franchise Area
offer cable service pursuant to the national certification. Because some
franchise area in which it intends to offer cable service. Sec. 612(b)(3).
of the national franchise requirements explicitly require the franchisee
CRS-8
Provision
House-Passed H.R. 5252
H.R. 5252 as Amended by the Senate
Commerce Committee
to meet the franchise requirements currently imposed on cable
companies with local franchises, the bill requires that applicants define
their proposed franchise areas in a fashion that does not overlap the
boundaries of existing cable franchises. Specifically —
a franchise area must be the entirety of a franchise area in which an
incumbent cable operator is authorized to provide cable service; or
if the applicant seeks to serve a geographic area for which currently
there is no authorized cable provider [currently, more than 95% of U.S.
households are located in a geographic area that at least one cable
company is franchised to serve], the franchise area must cover the
entirety of the jurisdiction of a unit of general local government. If the
applicant also seeks to serve a contiguous geographic area for which
currently there is an authorized cable provider, the certification must
specify separate franchise areas for the currently unserved and currently
served areas; or
if the applicant seeks to serve a geographic area that includes areas that
are within the jurisdiction of different franchising authorities (e.g.,
contiguous counties), the certification must specify each such area as a
separate franchise area. Sec. 630(a)(3)(F).
Renewal and Revocation
Renewal and Revocation
A national franchise shall be renewed automatically upon expiration of
A video service provider may submit a written application for renewal
the 10-year period. During the last year of the 10-year period, a local
of its franchise to a franchise authority not more than 180 days before
franchising authority may request a public hearing to identify cable-
the franchise expires. Any such application shall be made on the
related community needs and interests and to assess the performance of
standard application form created by the FCC and shall be treated in the
CRS-9
Provision
House-Passed H.R. 5252
H.R. 5252 as Amended by the Senate
Commerce Committee
the cable operator that holds the national franchise (hereinafter referred
same manner as any other franchise application. Sec. 625(a).
to as the “national franchisee”) in that franchise area. A franchise may
be revoked by the FCC for willful or repeated violation of any federal or
A franchising authority make revoke a video service provider’s
state law or Commission regulation relating to the provision of cable
franchise if it determines, after notice and an opportunity for a hearing,
service in the franchise area, for false statements or material omissions
that the video service provider has violated any federal or state law or
in FCC filings, for willful or repeated violation of rights-of-way
FCC regulation relating to the provision of video services in the
management laws or regulations, or for willful or repeated violation of
franchise area, made false statements or material omissions in any filing
the anti-discrimination requirement. A national franchisee whose
with the franchising authority or FCC, violated the rights-of-way
franchise has been revoked for a specific franchise area may seek
management laws or regulations of any franchising authority in the
reinstatement. Sec. 630(b)(2)(C) through (F).
franchise area, or violated the terms of the franchise agreement. Sec.
625(b)
A franchising authority may not revoke a franchise unless it first
provides written notice to the video service provider of the alleged
violation on which the revocation would be based and a reasonable
opportunity to cure the violation. Sec. 625(c).
Any decision of a franchising authority to revoke a franchise is final for
purposes of appeal. A video service provider whose franchise is
revoked may avail itself of procedures in Sec. 635 for action in federal
or state court. Sec. 625(d).
Franchise Fees
Franchise Fee
A national franchisee shall pay to the franchising authority a franchise
A franchising authority may impose and collect a franchise fee from a
fee of up to 5% of gross revenues from the provision of cable service
video service provider, but may not discriminate among video service
within the franchise area. Sec. 630(c)(1).
providers in imposing or collecting any fee. Sec. 622(a).
CRS-10
Provision
House-Passed H.R. 5252
H.R. 5252 as Amended by the Senate
Commerce Committee
The franchise fee imposed for any 12-month period may not exceed 5%
of the video service provider’s gross revenue derived in that period.
Sec. 622(b)(1).
Definition of Franchise
The term “franchise fee” includes any fee or assessment of any kind
The term “franchise fee” includes any tax, fee or assessment of any kind
Fee
imposed by a franchising authority or other governmental entity
imposed by a franchising authority or a state or local governmental
imposed on a cable service provider or subscriber, solely because of
entity imposed on a video service provider or subscriber, or both, solely
their status as such. It does not include:
because of their status as such. It does not include:
any tax, fee or assessment of general applicability;
any tax, fee or assessment of general applicability;
any fees assessed for support of PEG use and institutional networks;
any fees assessed for support of PEG use and institutional networks;
requirements or charges for the management of public rights-of-way,
requirements or charges incidental to the use of public rights-of-way,
including payments for bonds, security funds, letters of credit,
including payments for bonds, security funds, letters of credit,
insurance, indemnification, penalties, or liquidated damages; or
insurance, indemnification, penalties, or liquidated damages;
any fee imposed under title 17, United States Code. Sec. 602(p)(2).
any fee imposed under title 17, United States Code; or
costs of fines, penalties, or recoupment. Sec. 622(g)(1).
Definition of Gross
“Gross revenues” means all cash, credits, property, and in-kind
“Gross revenue” means all cash, credits, property, and in-kind
Revenue(s)
contributions (services or goods) received by the cable operator for the
contributions (services or goods) received by a video service provider
provision of cable service within the franchise area. Gross revenues
from the provision of video service within a franchise area. Gross
include —
revenue includes —
charges and fees paid by subscribers for the provision of video service,
charges and fees paid by subscribers attributable to the provision of
sold individually or as part of a package or bundle;
cable services, sold individually or as part of a package or bundle;
compensation received for promotion or exhibition of any product or
compensation received for promotion or exhibition of any products or
service on the provider’s video service;
CRS-11
Provision
House-Passed H.R. 5252
H.R. 5252 as Amended by the Senate
Commerce Committee
services over the cable system;
compensation received for carriage of video programming on the
provider’s system;
compensation for carriage of video programming or other programming
service on that operator’s cable service;
compensation arrangements for advertising.
compensation arrangements for advertising and
advertising commissions paid to an affiliated third party for cable
services advertising; and
franchise fees imposed on the cable operator that are passed on to
subscribers.
Gross revenue does
not include —
Gross revenue does
not include:
revenues not actually received, even if billed, such as bad debt not
revenues not actually received, even if billed, such as bad debt not
recovered;
recovered;
refunds, rebates, credits, or discounts to subscribers or to a municipality,
refunds, rebates, credits, or discounts to subscribers or to a municipality;
attributable to the cable service;
revenues received by a video service provider or its affiliates from the
revenues received by the cable operator or its affiliates from the
provision of services or capabilities other than video service, including
provision of services or capabilities other than cable service, including
voice, Internet access, or other broadband-enabled applications that are
telecommunications services, Internet access services, and non-cable
not video service, and non-video services bundled with video services;
services bundled with the cable service;
revenues for the provision of directory or Internet advertising, including
yellow pages, white pages, banner advertisement, and electronic
revenues for the provision of directory or Internet advertising, including
publishing;
yellow pages, white pages, banner advertisement, and electronic
CRS-12
Provision
House-Passed H.R. 5252
H.R. 5252 as Amended by the Senate
Commerce Committee
publishing;
any tax, fee, or assessment of general applicability imposed on a
subscriber or transaction by federal, state, or local government,
any tax, fee, or assessment of general applicability imposed on the
collected by the video service provider and required to be remitted to
customer or the transaction by a federal, state, or local government or
the taxing authority;
any other governmental entity, collected by the provider, and required to
be remitted to the taxing entity;
sales of capital assets or surplus equipment;
sales of capital assets or surplus equipment;
reimbursement by programmers for marketing costs incurred by the
video service provider for the introduction of any new programming;
reimbursement by programmers of marketing costs actually incurred by
the cable operator for the introduction of new programming; or
the sale of cable services for resale to the extent that the purchaser
certifies in writing that it will resell the service and pay any applicable
the sale of cable services for resale to the extent the purchaser certifies
franchise fee;
in writing that it will resell the service and pay a franchise fee. Sec.
630(o).
revenues paid by subscribers to a home shopping programmer directly
from the sale of merchandise through any home shopping channel (but
excluding any commissions paid to the video service provider as
compensation for promotion or exhibition of any product or service).
Sec. 622(g)(2).
PEG Channels and Institutional Networks
Public, Educational, and
A national franchisee shall provide channel capacity for PEG use that is
A video service provider that obtains a franchise shall provide channel
Governmental (PEG)
not less than the channel capacity required of the cable operator with the
capacity for PEG use that is not less than the channel capacity required
Channel Requirements
most subscribers in the franchise area on the effective date of the
of the cable operator or video service provider with the greatest number
national franchise.
of PEG use channels in the franchise area on the effective date of the
franchise. If there is no other video service provider in the franchise
If there is no other cable operator in the franchise area required to
area on the effective date of the franchise, the video service provider
provide channel capacity for PEG use, the national franchisee shall
may be required to provide up to 3 channels. Sec. 611(a).
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Provision
House-Passed H.R. 5252
H.R. 5252 as Amended by the Senate
Commerce Committee
provide the channel capacity for such use determined by FCC rule.
Every 15 years, a franchising authority may require a video service
Every 10 years, a franchising authority may require a national
provider to increase the channel capacity designated for PEG use, and
franchisee to increase the channel capacity designated for PEG use by
the channel capacity designated for such use on any institutional
the higher of one channel or 10% of the PEG channel capacity required
networks required, not to exceed the greater of 1 channel or 10% of the
of that operator prior to the increase. Sec. 630(e)(1) and (3).
PEG channel capacity required of that provider prior to the increase.
Sec. 611(b).
Other Public,
PEG programming carried by the cable operator must be available to all
PEG programing carried by the video service provider must be available
Educational, and
subscribers in a franchise area. Sec. 630(e)(4)(A).
to all subscribers in a franchise area. Sec. 611(d)(1).
Governmental (PEG)
Channel Requirements
The production of any PEG programming is the responsibility of the
The production of any PEG programming is the responsibility of the
franchising authority. Sec. 630(e)(4)(B).
franchising authority. Sec. 611(d)(2).
The cable operator is responsible for the transmission from the signal
The video service provider is responsible for the transmission from the
origination point of the programming, or from the point of
signal origination point of the programming, or from the point of
interconnection with another cable operator, to the cable operator’s
interconnection with another video service provider already offering the
subscribers, of any PEG programming produced by or for the
PEG programming, to the video service provider’s subscribers, or any
franchising authority and carried by the cable operator. Sec.
PEG programming produced by or for the franchising authority and
630(e)(4)(C).
carried by the video service provider. Sec. 611(d)(3).
Unless 2 video service providers otherwise agree to the terms for
Unless 2 cable operators otherwise agree to the terms for
interconnection and cost sharing, such video service providers shall
interconnection and cost sharing, in a franchise area where there is more
comply with regulations prescribed by the Commission providing for
than one cable operator and at least one is a national franchisee, the
the interconnection between the 2 video service providers for
cable operators must either agree to interconnection and cost sharing
transmission of PEG programming without material degradation of
terms, or abide by FCC interconnection and cost-sharing regulations for
signal quality or functionality and reasonable allocation of the costs of
the transmission of PEG programming without material deterioration in
such interconnection. Sec. 611(d)(4).
signal quality or functionality. Sec. 630(e)(4)(D).
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Provision
House-Passed H.R. 5252
H.R. 5252 as Amended by the Senate
Commerce Committee
A cable operator shall display program information for PEG channels
The video service provider shall display the program information for
on any navigational device, guide, or menu containing other video
PEG programming in any print or electronic program guide in the same
programming that is made available to subscribers in the franchise area.
manner in which it displays program information for other video
Sec. 630(e)(4)(E).
programming in the franchise area. Sec. 611(d)(5).
A video service provider shall not exercise any editorial control over
any PEG use of channel capacity, but a video service provider may
refuse to transmit any public access program or portion of a public
access program that contains obscenity. Sec. 611(c).
Public, Educational, and
A national franchisee shall pay an amount equal to 1% of the cable
A video service provider may be required to pay a fee equal to:
Governmental (PEG)
operator’s gross revenues in the franchise area to the franchising
Channel and
authority for the support of PEG use and institutional networks. Sec.
not more than 1% of its gross revenue in the franchise area to the
Institutional Network (I-
630(e)(2).
franchising authority for the support of PEG access facilities and
Net) Financial Support
institutional networks; or
the value, on a per subscriber basis, of all monetary grants or in-kind
services or facilities for PEG access facilities provided by the cable
operator in the franchise area with the most cable service subscribers in
the calendar year preceding the date of enactment of this act, pursuant to
that cable operator’s existing franchise in effect on the date of
enactment. Sec. 622(b)(4).
Existing Institutional
A cable operator that provided cable service in a franchise area on the
A franchising authority may require a cable operator or video service
Networks
date of enactment of the act and then obtains a national franchise must
provider with a franchise in effect on the date of enactment of the act to
continue to provide any institutional network that it was required to
continue to provide any institutional network it was required to provide
provide on the day before its national franchise became effective. Sec.
on the date of enactment, notwithstanding the expiration or termination
630(e)(2)
of that franchise pursuant to that cable operator or video service
provider obtaining a franchise under the new rules in this act. Sec.
622(b)(4)(C)(i).
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A franchising authority may not require a national franchisee to
A franchising authority may not require a video service provider to
construct a new institutional network. Sec. 630(e)(2).
construct a new institutional network. Sec. 622(b)(4)(C)(ii).
Audits Relating to Fees
Reporting, Records, and
A national franchisee shall make periodic reports to the FCC and the
A franchising authority may require a cable operator to provide
Audits Relating to Fees
franchising authority to verify compliance with fee obligations. Sec.
information sufficient to calculate the per-subscriber equivalent fee to
630(m)(1).
provide PEG and institutional network financial support. The
information shell be treated as confidential and proprietary business
Upon request by a franchising authority or the FCC, a national
information. Sec. 622(b)(4)(B).
franchisee shall make available its books and records for periodic audit.
A franchising authority may review the business records of a cable
No more than once a year, a franchising authority may conduct an audit
operator, to the extent needed to ensure proper payment of fees, not
of a video service provider’s business records to the extent reasonably
more than once in a 12-month period. Sec. 630(m)(2) and (3).
necessary to ensure payment of the required fees. The video service
provider shall make its books and records available for such periodic
review. Sec. 622(e)(1) and (2).
To the extent that the review identifies an underpayment of more than
5% of any fee, the video service provider shall reimburse the
To the extent that a review identifies an underpayment of franchise fees
franchising authority the reasonable costs of any such review conducted
or PEG/institutional network fees, the cable operator shall reimburse the
by an independent third party with respect to such fee. The costs of any
franchising authority the reasonable costs of any such review conducted
contingency fee arrangement between the franchising authority and the
by an independent third party. The FCC shall determine by rule the
independent reviewer shall not be subject to reimbursement. Sec.
minimum percentage underpayment that requires cost reimbursement.
622(e)(3).
Sec. 630(m)(4).
Any fee that is not reviewed by a franchising authority within three
years after it is paid or remitted shall not be subject to later review by
Any fee that is not reviewed by a franchising authority within three
the franchising authority. Sec. 622(e)(4).
years after it is paid or remitted shall not be subject to later review by
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the franchising authority. Sec. 630(m)(5).
All financial determinations and calculation shall be made in accordance
with generally accepted accounting principles (GAAP). Sec. 622(f).
Fee Dispute Resolution
A franchising authority or a national franchisee may file a complaint at
the FCC to resolve a dispute with respect to the amount of any fee
required, if the franchising authority or the national franchisee provides
the other entity written notice of such dispute and if they have not
resolved the dispute within 90 calendar days after receipt of such notice.
A complaint must be filed within three years of the period to which the
disputed amount relates. The FCC shall issue an order resolving any
complaint within 90 days of filing. Sec. 630(m)(6).
Rights-of-Way
Authority To Use Public
A national franchise authorizes the construction of a cable system over
Any franchise shall be construed to authorize the construction of a video
Rights-of-Way
public rights-of-way and through easements within the area to be served
service system over public rights-of-way, and through easements, that
by the cable system. Sec. 630(f)(1).
have been dedicated for compatible purposes, within the area to be
served by the video service system. Sec. 621(a)(3).
Restrictions on
A national franchisee can use local rights-of-way and easements subject
A franchisee can use local rights-of-way and easements subject to
Franchisees’ Use of
to assurance that:
assurance that:
Rights-of-Way
the safety, functioning, and appearance of the property and the
the safety and functioning of the property and the safety of other
convenience and safety of other persons are not adversely affected by
persons are not adversely affected by the installation or construction of
the installation or construction of facilities; Sec. 630(f)(1)(A)
facilities; Sec. 621(a)(3)(A) and
the cost of the installation, construction, operation, or removal of such
the cost of the installation, construction, operation, or removal of such
facilities will be borne by the cable operator or subscriber, or a
facilities will be borne by the video service provider or subscriber, or a
combination of both; Sec. 630(f)(1)(B) and
combination of both. Sec. 621(a)(3)(B).
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the owner of the property be justly compensated by the national
State or local government may require that a property owner be justly
franchisee for any damages caused by the installation, construction,
compensated by a video service provider for damage caused by the
operation, or removal of such facilities by the national franchisee. Sec.
installation, construction, operation, or removal of facilities by the video
630(f)(1)(C).
service provider. Sec. 621(a)(2)(C).
Management of Public
A state or local government (including a franchising authority) retains
A state or local government shall apply its laws or regulations in a
Rights-of-Way
its authority over a national franchisee to manage, on a reasonable,
manner that is reasonable, competitively neutral, nondiscriminatory, and
competitively neutral, and nondiscriminatory basis, the public rights-of-
consistent with state police powers, including permitting, payments for
way and easements. A state or local government or franchising
bonds, security funds, letters of credit, insurance, indemnification,
authority may impose charges for such management and may require
penalties, or liquidated damages to ensure compliance with such laws
compliance with such management and charges. Sec. 630(f)(2).
and regulations. Any permitting fees imposed by a state or local
government shall be for the purposes of compensating that government
for costs incurred in managing public rights-of-way. Any law that
meets the requirements of this subparagraph shall not be held to have
the effect of prohibiting a video service provider from offering video
service. Sec. 621(a)(2)(B).
Rights-of-Way Dispute
If a dispute arises, the sole recourse of any party to the dispute shall be
Resolution
to file an action in a court of competent jurisdiction. Sec. 621(a)(1)(D).
Pole Attachments
Nothing in the act or the amendments made by this act will affect the
application or interpretation of Sec. 224 of the Communications Act,
which regulates pole attachments. Sec. 104.
Consumer Protection and Customer Service
National Consumer
No state or local law or regulation shall impose on a national franchisee
Protection and Customer
any consumer protection or customer service requirement other than
Service
consumer protection or customer service requirements of general
Standards
applicability. Sec. 630(g)(1).
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Within 120 days of enactment of this act, the FCC shall issue a report
Within 120 days of enactment of this act, after receiving comment from
and order that updates for national franchisees the national consumer
interested parties, the FCC shall promulgate regulations, including
protection and customer service rules currently in section 632(b) of the
penalties to be paid to subscribers, with respect to customer service and
Communication Act, taking into account the national nature of a
consumer protection requirements for video service providers. The
franchise and the role of state and local governments in enforcing, but
regulations shall take effect 60 days after the date on which the final
not creating, consumer protection and customer service standards. Sec.
rule is promulgated by the Commission. Sec. 632(a)(1) and (2).
630(g)(2).
The national rules shall address, in addition to requirements in section
632(b), the following service issues: billing, billing disputes,
discontinuation of service, when and how late fees may be assessed (but
not the amount of such fees), loss of service or service quality, changes
in channel lineups or other cable services and features, and the
availability of parental control options. Sec. 630(g)(3)(A).
The FCC’s revised consumer protection rules shall provide for forfeiture
penalties, customer rebates, refunds, or credits, and shall establish
guidelines with respect to violations of such rules. These guidelines
shall provide for increased forfeiture penalties for repeated violations of
the standards in the rules and establish procedures for payments by the
cable operator directly to the affected franchising authority. Sec.
630(g)(3)(B).
Consumer Protection
A person may file a consumer protection or customer service complaint
The consumer protection and customer service regulations promulgated
and Customer Service
with respect to an alleged violation of the FCC’s revised consumer
by the FCC shall be enforced by franchising authorities. A franchising
Complaints
protection rules by a national franchisee either with the local franchising
authority may refer a matter for enforcement to the state attorney
authority or with the FCC. Sec. 630(g)(4)(A).
general or state consumer protection agency on a case-by-case basis.
Sec. 632(c).
On its own motion or at the request of a person, a local franchising
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authority may initiate its own complaint proceeding with respect to an
A video service provider may appeal any enforcement action taken
alleged violation or may file a complaint with the FCC regarding such
against that provider by a franchising authority to the FCC. Sec. 632(d).
an alleged violation. The local franchising authority or the FCC shall
render a decision on any complaint filed within 90 days of its filing.
Sec. 630(4)(B) and (C).
In a proceeding commenced by a franchising authority, the franchising
authority may issue an order requiring compliance with the FCC’s
consumer protection rules, but may not create any new standard or
regulation or expand or modify the FCC’s rules. In such a proceeding,
the franchising authority may issue an order requiring the filing of any
data, documents, or records that are directly related to the alleged
violation. A franchising authority may charge a national franchisee a
nominal fee to cover the costs of issuing orders. Sec. 630(g)(5)(A), (B),
and (C).
An order of a franchising authority shall be enforced by the FCC if the
order is not appealed to the FCC, if the FCC does not agree to grant
review, or if the order is sustained by the FCC on appeal. Sec. 630
(g)(6)(A).
Any party may file with the FCC a notice of appeal of an order of a
franchising authority. Such appeal shall be deemed denied after 30-days
unless the FCC agrees within such period to grant review of the appeal.
If the appeal is not denied, the FCC shall render a decision within 90
days of such filing. Sec. 630(g)(6)(B) and (C).
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Early Termination of
It is unlawful for a video service provider to charge a subscriber an
Subscriptions
amount in excess of one month’s subscription fee as a penalty or service
charge for terminating a subscription to the video service provider’s
service before the date on which the subscription term ends. Sec.
632(a)(2).
FCC Report on
Within one year of the enactment of this section, and annually
Consumer Protection
thereafter, the FCC shall submit a report to the House and Senate
and Customer Service
Commerce Committees on the implementation of this complaint
Complaint Process
process, including the number of complaints filed with franchising
authorities; any trends concerning complaints, such as increases in the
number of particular types of complaints or in new types of complaints;
the timeliness of the response of franchising authorities and the results
of complaints not appealed to the FCC; the number of complaints filed
directly with the FCC; the number of appeals filed with the FCC and the
number of such appeals that the FCC agreed to hear; the timeliness of
the FCC’s responses to such complaints and appeals; and the results of
such complaints and appeals filed with the FCC. Sec. 630(g)(7)(A).
The FCC may request that franchising authorities submit information
about the complaints filed with the franchising authorities, including the
number of such complaints and the timeliness of the response and the
results of such complaints. Sec. 630(g)(7)(B).
Redlining and Buildout
Anti-discrimination
A national franchisee shall not deny cable service to any group of
A video service provider may not deny access to its video service to any
(Redlining)
potential residential cable subscribers in the franchise area because of
group of potential residential video service subscribers because of the
the income of that group. Sec. 630(h)(1).
income, race, or religion of that group. Sec. 642(a).
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A franchising authority may file a complaint against a national
This section may be enforced by the state attorney general through a
franchisee with the FCC, after providing the franchisee with notice and
complaint-initiated adjudication process under which a complaint may
the opportunity to respond. Sec. 630(h)(2)(A) and (B).
be filed by a resident of the franchising area who is aggrieved or by a
franchising authority on behalf of residents of its franchise area. Within
Upon receipt of a complaint, the FCC shall give notice of the complaint
180 days of receiving the complaint, a state attorney general shall act on
to the national franchisee. In investigating a complaint, the FCC may
such complaint either by filing a complaint with a court of competent
require the national franchisee to disclose such information and
jurisdiction or notifying the resident or franchising authority that the
documents as the FCC deems necessary to determine whether the
state attorney general will not file such a complaint. The totality of the
national franchisee is in compliance, subject to confidentiality
video service provider’s deployments in its service areas shall be
protections. The FCC shall issue a determination with respect to each
considered in any adjudication pursuant to an enforcement action. Sec.
violation alleged in the complaint within 60 days. Sec. 630(h)(2)(D),
642(b)(1) and (2).
(E), and (F).
If a court determines that a video service provider has violated
subsection (a), it shall ensure that the video service provider remedies
If the FCC determines that a national franchisee has discriminated
any violation and may assess a civil penalty in such amount as may be
against a group on the basis of income, it shall ensure that the national
authorized under state law for the franchising area in which the violation
franchisee extends access to that group within a reasonable period of
occurred for violation of that state’s anti-discrimination laws. Sec.
time. Sec. 630(h)(2)(G).
642(c).
The maximum forfeiture penalty applicable to a violation of this
It is not a violation if video service is denied because technical
subsection is $750,000 for each day of the violation. Payment of any
feasibility, commercial feasibility, operational limitations, or physical
forfeiture payment shall be made directly to the franchising authority
barriers preclude the effective provision of video service. Sec.
involved. Sec. 630(h)(2)(H).
642(d)(1).
Nothing in this section authorizes the use of quotas, goals, or timetables
as a remedy. Sec. 642(d)(2).
Buildout Requirement
The buildout requirement currently in Sec. 621(a)(4)(A) is eliminated.
The buildout requirement currently in Sec. 621(a)(4)(A) is eliminated.
Buildout Report
A national franchisee must submit to the FCC and the franchising
Beginning three years after the date of enactment, each franchising
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authority, within 180 days of obtaining the franchise and then
authority shall report to the FCC on video service provider deployment
biannually, a report identifying the geographic areas in the franchise
in its franchise area. The Commission shall develop and make available
area where the cable operator offers cable service and describing the
to franchising authorities a standardized, electronic data-based, report
cable operator’s progress in extending cable service to other areas in the
form to be used in complying with this section. A video service
franchise area. Sec. 630(h)(2)(C).
provider shall provide such information to the franchising authority as is
needed to complete the report. Sec. 642(e)(1).
Beginning four years after the date of enactment, and every four years
thereafter, the FCC shall report to the Senate and House Commerce
Committees on the buildout of video service. Sec. 642(e)(2).
Miscellaneous Provisions
State and Local Laws
Nothing in this title is intended to affect state or local laws of general
applicability, except to the extent that such laws are inconsistent with
this title. Sec. 604.
No state or local government may regulate direct broadcast satellite
(DBS) services. This does not prevent state taxation of a DBS provider
and does not preempt state or local laws of general applicability. Sec.
605.
No state or local law may prohibit, or have the effect of prohibiting, a
video service provider from offering video service. Sec. 621(a)(2)(A).
Nothing in this section shall be construed to modify, impair, supersede,
or authorize the modification, impairment, or supersession of, any state
or local law pertaining to taxation. Sec. 622(d).
Child Pornography
The FCC shall promulgate regulations to require a national franchisee to
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prevent the distribution of child pornography over its network. Sec.
630(i).
Leased Access
The provisions of section 612(I) of the Communications Act regarding
the carriage of programming from a qualified minority programming
source or from any qualified educational programming source shall
apply to a national franchisee. [Under current law, to promote diversity
of program sources, a cable operator is required to set aside a certain
percentage of its channel capacity for commercial use by persons
unaffiliated with the operator. Section 612(i) allows the cable operator
to use up to 33% of that set-aside channel capacity for the provision of
programming from a qualified minority programming source or from a
qualified educational programming source.] Sec. 630(j).
Municipal Operators
A local or municipal authority may operate as a multichannel video
programming distributor in the franchise area. Sec. 612(f).
IP-enabled Video
IP-enabled video service is an interstate service and is subject only to
Service
federal regulations. Sec. 642(a).
“IP-enabled video service” means a video service provided over the
public Internet [undefined] utilizing Internet protocol, or any successor
protocol that is not offered by, or not offered as part of a package of
video services offered by, a video service provider or its affiliate. Sec.
642(b).
The FCC may not impose any rule on, apply any regulation to, or
otherwise regulate the offering or provision of IP-enabled video service.
Sec. 642(c).
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Nothing in this section shall be construed to interfere with any lawful
activity of law enforcement or to modify, impair, supersede, or
authorize the modification, impairment, or supersession of, any state or
local law. Sec. 642(d) and (e).
Emergency Alerts
A state or local government may access the emergency alert system of a
national franchisee to transmit local or regional emergency alerts. Sec.
630(l).
Access to Programming
A cable programming vendor in which a cable operator has an
A video service programing vendor in which a video service provider
for Shared Facilities
attributable interest shall not deny a national franchisee access to video
has an attributable interest may not deny a video service provider with a
programming solely because the national franchisee uses a headend for
franchise access to video programming solely because that video service
its cable system that is also used, under a shared ownership or leasing
provider uses a headend for its video service system that is also used,
agreement, as the headend for another cable system. [This provision is
under a shared ownership or leasing agreement, as the headend for
intended to protect small cable operators that share facilities with other
another video service provider. [This provision is intended to protect
cable operators.] Sec. 630(n)
small cable operators that share facilities with other cable operators.]
Sec. 628(a).
Preservation of Basic
The basic tier regulation requirements in Sec. 623 of the current Title VI
Tier Regulation
shall continue to apply in any franchise area until a franchising authority
receives a notice that a competitive provider has commenced the
provision of video service in the service area. Sec. 381(c)(2).
Report on Cable Service
The FCC shall, commencing not later than one year after the date of
Deployment
enactment of the act, issue a report annually on the deployment of cable
services pursuant to the amendments in this title. In its report, the FCC
shall describe in detail the following:
With respect to deployment by new cable operators —
the progress of deployment of such service within the telephone service
area of cable operators, if the operator is also an incumbent local
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exchange carrier, including a comparison with the progress of
deployment of broadband services not defined as cable services within
such telephone service areas; the number of franchise areas in which
such service is being deployed and offered; where such service is not
being deployed and offered; and the number and locations of franchise
areas in which the cable operator is serving only a portion of the
franchise area, and the extent of such service within the franchise area.
The number and locations of franchise areas in which a cable operator
with a franchise under section 621 of the Communications Act on the
date of enactment of this act withdraws service from any portion of the
franchise area for which it previously offered service, and the extent of
such withdrawal of service within the franchise area.
The rates generally charged for cable service.
The rates charged by overlapping, competing multichannel video
programming distributors and by competing cable operators for
comparable service or cable service.
The average household income of those franchise areas or portions of
franchise areas where cable services are being offered, and the average
household income of those franchise areas, or portions of franchise
areas, where cable service is not being offered.
The proportion of rural households to urban households, as defined by
the Bureau of the Census, in those franchise areas or portions of
franchise areas where cable service is being offered and where it is not
being offered, including a state-by-state breakdown of such data and a
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comparison with the overall ratio of rural and urban households in each
state; and
A comparison of the services and rates in areas served by national
franchisees and the services and rates in other areas.
The FCC is authorized to require cable operators to report all of the
information that the FCC needs to compile the report and to require
cable operators to file the same information with the relevant
franchising authorities and state commissions. Sec. 103.
Definitions
Definition of Cable
The term “cable operator” means any person or group who provides
The term “video service provider” means a facilities-based provider of
Operator/Video Service
cable service over a cable system and directly or through one or more
video service that utilized a public right-of-way in the provision of such
Provider
affiliates owns a significant interest in such cable system, or who
service (including cable operators and providers offering open video
otherwise controls or is responsible for the management and operation
systems under Sec. 653), regardless of the transmission technology used
of such a cable system. This includes a person or group with a national
and regardless of how the subscriber interacts with the service, but does
franchise. Sec. 602(5) as clarified by Sec. 630(p).
not include satellite service, video programming using radio
communication directly to the recipient’s premises, or service via
commercial mobile service. Sec. 314(25).
The term “cable operator” includes a local exchange carrier that
provides video services to video service subscribers in its telephone
service area through an open video system that complies with the
requirements of Sec. 653 of the Communications Act. Sec. 381(d)(1).
Definition of Cable
The term “cable service” means —
The term “video service” means –
Service/Video Service
(i) the one-way transmission to subscribers of video programming, or
(i) the transmission to subscribers of video programming, interactive on-
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other programming service; and
demand service, or other programming service; and
(ii) subscriber interaction, if any, which is required for the selection or
(ii) subscriber interaction, if any, required for the selection or use of
use of such video programming or other programming service; or
such video programming, interactive on-demand service, or other
programming service regardless of the transmission technology used
the transmission to subscribers of video programming or other
and regardless of how the subscriber interacts with the service. Sec.
programming service provided through wireline facilities located at least
314(24).
in part in the public rights-of-way, without regard to delivery
technology, including Internet protocol technology, except to the extent
that such video programming or other programming service is provided
as part of a commercial mobile service or an Internet access service.