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Ø/-/7 TELECOM from page 8 .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . prepared for this "new regulatory world" will do much better in shaping these services in their communities. Those communities that are unpre- pared will have these services shaped entirely by the industry and industry will not be concerned with the larger public policy issues in the deploy- ment Df a communications infrastructure (see "Telecommunications Issues Affecting Cities"). We urge that cities move now to address these issues locally, while this debate continues at the state level. Plan to participate in the statewide meetings that will likely take place in conjunction with the work Dfthe Legislature. To view an issue paper on the telecommunications issues, please visit the Transportation, Communications and Public Works section of the League's website at www.cacities.org/tcpw. TELECOMMUNICATIONS ISSUES AFFECTING CITIES 0 State Parameters for Local Franchises. One of the communications industry concerns can be described in general as "uniformity." The argument is that the more "uniform" the franchise process is, the better it is for industry. It is a point that is consistent with the industry goal of "speed to market." The contention is that the faster the industry gets to market the more "sound" the industry business plan. This issue has both pros and cons from a local government perspective. It runs the potential of being preemptory of local authority over the local franchise process. On the other hand, it may speed negotiations, which can easily become prolonged, on certain regulatory issues. As with any legislation, the details are impDrtant in how this issue develDps. 0 Local Franchise Fees. Local govern- ments can currently collect a franchise fee from most utilities. It is a substantial amount of money on a statewide basis. Industry is raising the same "uniformity" issues when it comes to fees. The argument is that it would be easier to collect a fee at the state level and remit it back tD local govern- ment. LDcal governments have not had a good experience with state collected and remitted fees! taxes (remember vehicle license fees (VLF)?). Is there a compromise position on this issue? Will a franchise fee or some other fee apply to what are now the traditional telephone companies? 0 Utility User Taxes. In an attempt to achieve this industry concern for "uniformity," there is interest in trying to lump franchise issues with utility user tax (UUT) issues. Among the problems with this concept is that a franchise fee is just that - a "fee" with a nexus to the public right-of-way. Utilities pay these fees for the privilege of putting down their infrastructure in the public's right-of-way. On the other hand, a UUT is just that - a "tax" and is enacted by a city to pay for general fund services such as police and fire. Combining a tax and a fee is at best wrong, and presents numerous questions as to communities that have these two revenue sources may be held harmless. Approximately 150 local agencies have a UUT and the rates vary considerably across the state. 0 Public, Education and Government Channels (PEG). The requirement of PEG channels for the community is a critical concern to many communities and is one of the more difficult issues in local franchise negotiations. While there is strong legislative sentiment about the need for PEG channels, there are questions about how many are needed and under what conditions? Is there a way to place a portion of the PEG require- ments in state law, but allow local flexibility in negotiations? 0 Build.out of Communications Systems. A key issue, again with good support in the Legis- lature, is the need to build out the communications infrastructure in a community in a manner that does not discriminate against one portion of the community over another. This is a consideration at the city level as well as at a statewide or regional level. PRIORITY FOCUS/PAGE 9 www.cacities.org -- Visit the League's Official Website T---