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9A to them being deemed granted without financial support for government, educational, and school Page 20 channels. Like the prior House bill, the current bill allows essentially any interested provider to obtain a national franchise and to select the municipalities in which they are authorized to provide service. The bill also classifies A T& rs Internet protocol television service as a cable service. There are no requirements specifying where and how build-out of services should occur under the franchise, although Senate floor amendments that will propose changing this are likely. "Redlining" groups on the basis of income, race, or religion is prohibited, unless excused by "technical feasibility, commercial feasibility, operational limitations, or physical barriers. " Enforcement authority rests exclusively with the state attorney general, and remedies may not use "quotas, goals, or timetables. " The exceptions and enforcement provisions make these redlining provisions problematic. The national franchisee must provide as many government, educational, and public channels as the incumbent, with the number Increasing every 15 years, plus financial support for them equal to the greater of one percent of gross revenues or that already provided by the incumbent (including lump-sum or one-time payments). Municipalities may require the continuation of existing I-NETS (communications networks provided by cable companies for municipal use), but may not require new ones. The Senate bill provides for a franchise fee based on 5 percent of gross revenues, and audits to verify compliance. On rights-of-way, franchisees must agree to comply with municipal regulations regarding their .use and occupation, . including police powers, that are consistent with the bill. No local law can effectively prohibit the provision of cable service (wording similar to current telecommunications statutes, which have spawned some litigation). Also the Senate bill requires the FCC to issue new consumer protection rules, which must include penalties payable to subscribers for violations, and municipalities can enforce such rules. If you have any questions, please feel free to contact, League Legislative Analyst Genevieve Morelos at (916) 658-8254, or via e-mail at Qmorelos@cacities.om. AS 2987 Continued from Page 1... An August 7 amended version of the bill appeared in print this week. The amendments reflect changes adopted June 27 by the Senate Energy, Utilities and Communications (E, U & C) Committee. The League has just received and is reviewing additional amendments covering the issues of funding support and the number of channels available for public, education and government ("PEG") stations, and funding for I-Net systems. These are issues that Sen. Joe Simitian and other members of the Senate E, U & C Committee insisted be addressed in negotiations during July. The League and others presented extensive infolTTlation to legislative staff regarding community concerns with these issues. Presumably, these amendments will be in print within the next few days. For information on the League's PEG and I-Net concerns, see "AS 2987: PEG and I-Net Concerns,. on Page 4. The bill is likely to be sent to the Appropriations Committee Suspense File, based upon the anticipated new costs to the state to establish a new bureaucracy at the California Public Utilities Commission to the state-issued franchise program. The committee will likely take up the Suspense File and pass AS 2987 within the week. We will post updated information and our analysis on the amendments on the League website as soon as our analysis is complete (www.cacities.ora/ab2987). We will also update the online Advocacy Center (www.cacities.orQ/advocacvcenter) with new sample letters and talking points. 3 -