AgdaPkt 2006-07-10 - Laserfiche WebLink

Browse Search

9A Page 4 TELECOM from page 3.... e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Franchise Fees Still At Risk. AB 2987 provides local agencies with franchise fees equal to 5 percent of gross revenues (as many agencies receive today). But the bill- even with amend- ments - as drafted presents two serious Is- sues. 1. "Fee" really a state tax. While local agencies can currently impose a franchise fee as "rent" for local rights-of-way, AB 2987 imposes a state franchise fee. The June 22 amendments say that local agencies can collect the "fees. if they adopt an ordinance. But since the state does not own local streets, this state-imposed fee is really a tax. Local agencies would need voter approval before they could impose these new "franchise fees" (taxes) on new franchisees. 2. The amended version of the bill continues to use a definition of "gross revenues" that allows video service providers to manipulate their gross revenues and thereby reduce franchise fees - meaning that agencies will lose revenues, Abrogation of Contracts: More than $300 Million Annual Franchise Fees at Risk. California cities currently receive approximately $300 million a year in cable franchise fees, in exchange for the cable companies "renting" local rights-of-way. These funds are considered gen- eral revenues - available to fund public safety or other local priorities. Cable companies are proposing amendments to terminiate existing franchise agreements with local agencies. Franchise revenues could be placed in jeopardy or significantly reduced if cable companies are able to cut a deal in AB 2987 that allows them to abrogate current contracts to achieve a "level playing field" with telephone companies. Strengthen Customer Service Stan- dards. AB 2987 pre-empts local customer ser- vice standards which local agencies adopt and enforce under their cable franchise agreements. The bill requires local agencies to enforce limited state standards and authorizes the imposition of liquidated damages, but pre-empts franchise termination as a remedy. In other words, the bill gives local agencies the responsibility for ensuring consumer protection with little real authority. Solution. Leave in place local agency author- ity to adopt customer service standards; at a minimum, adopt model customer service stan- dards developed by the Federal Communications Commission (FCC). Leave in place local authority to enforce those standards, including franchise termination in extreme cases. Retain Local Authority to Manage Public Rights-at-Way. AB 2987 contains confusing and conflicting language about the conditions under which telephone companies can deploy their equipment in local rights-of-way. Solution: Amend the bill to provide that noth- ing in the bill affects the authority of local agencies to regulate the time/place/manner of the use of the public rights-at-way provided it is done in a manner consistent with the bill, Retain Funding for PEG Channels. Public, education and government channels ("PEG") are an important tool used by many local agencies and local organizations to broadcast public meetings, programs and information of community interest. Cities are currently able to negotiate with cable providers as part ot their local franchise agreement for PEG funding and sup- port. AB 2987 would instead allow only 1 percent for both PEG channels and I-Net services ("insti- tutional networks"), and limit that to only pay for capital expenses (no operating expense). Solution: Amend AB 2987 to provide that operators shall pay a specified amount of gross revenues for PEG only (not I-Net, which should be funded separately). Provide that these funds may be used for either capital or operational expenses. Institutional Networks. Institutional Net- works ("I-Net") provide a tremendous benefit to Continued on Page 5 PAGE 4 . PRIORITY FOCUS June 23, 2006 - Issue #25 Visit the League's Official Website..www.cacities.org