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INITIAL CONCERNS WITH THE 'COMMUNICATIONS, PROMOTION, AND ENHANCEMENT ACf OF 2006' The League of California Cities is still analyzing the legislation is silent on the appropriate forum for the draft telecommunications reform proposal re- resolving local rights-of-way disputes, by default that leased earlier this week by House Energy and Com- task would move to the Federal Communications merce Committee Chairman Joe Barton (R-Texas) and Commission (FCC). several Republican members of the committee. Franchise Fees. Although the bill would retain The following summarizes some of the concerns the current 5 percent gross revenue cap on franchise with the draft measure noted by a coalition of national fees, the definition of "gross revenues" may be more local government groups in the draft measure, includ- limited than what is contained in local franchise ing the National League of Cities, U.S. Conference of agreements. Therefore, depending on how the local Mayors, National Association of Counties, National franchise agreement is drafted, some cities may see Association of Telecommunications Officers and revenue reductions. Advisors and others. (Visit the League's website Telcom page at www.cacities.ora/telecom to view PEG Channels. The number of public, educa- testimony provided by Mayor Ken Fellman of Arvada, tional and governmental (PEG) channels would be Colorado, on behalf of this coalition of groups.) determined by the number of PEG channels provided by the incumbent operator. If the franchise area, Franchises. The bill would establish a national which would be designated solely by the cable franchise, issued by the Federal Communications operator, covers more than one jurisdiction, the Commission (FCC) for companies that want to provide number of PEG channels provided would be deter- cable services. The legislation would allow the mined by the number of channels provided by the incumbent cable operator to abandon the existing incumbent operator in the jurisdiction with the highest locally granted franchise as soon as the federally population. A new, additional PEG channel, or 10 certified national franchise holder commences cable percent increase, could be requested only every 10 service in the incumbent's service area. years. If a new provider decided to abandon the attempt I-Net. The draft provides that existing institu- to provide service under the national franchise in a tional networks (I-Nets) would be "grandfathered" in - service area, the incumbent cable operator would but there is no allowance for new I-Nets. Essentially, have to negotiate a new local franchise. The bill would existing I-Nets would continue but local agencies not require the incumbent operator to resume comply- cannot require cable operators who have national ing with the previously-abandoned local franchise. franchises to provide new I-Nets. Build-OutlCherry-Picking. Although the draft PEG and I-Net Support. The draft legislation would prohibit discrimination based on income, it provides one percent of gross revenues for "support" appears that it would allow a new cable provider of PEG channels and I-Nets for local government through the national franchise to cherry pick which needs such as fire, police, and other governmental areas it plans to service. The draft is silent on the communications. For some jurisdictions, these subject of build-out. provisions may not be sufficient in addressing your community and residents' needs. Consumer Protection. The bill would require the FCC to adopt national consumer protection E-9-1-1. The draft preserves a city's ability to standards, but appears to prohibit local authorities impose a fee for E-911 and 911 services. from imposing stricter local standards. , Muni Broadband. Municipalities could continue Local Rights-of-Way. Though the legislation to provide telecommunications services. would preserve local authority over the management of rights-of-way, it would fail to provide sufficient enforcement authority to assure compliance. While p~ 4 . PRIORITY FOCUS Visit the League's Official Website--www,cacities.org March 31, 2006 - Issue #13