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$-7 TELECOM from page 6 .................................. a . . - . . . . . . . 0 State Parameters for Local Franchises i One of the cõmmunications industry concems can be described in general as .uniformity: The argument is that the more .uniform8 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 will be. This issue has both pros and cons from a local govemment perspective. It runs the potential of being preemp- tory of local authority over the local franchise process, On the other hand, it may speed nego- tiations, which can easily become prolonged, on certain regulatory issues. As with any legislation, the details are important in how this issue devel- ops. 0 Local Franchise Fees Local govemments 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 to local govemment. The local govemments experience with state collected and remitted fees/ taxes (remember Vehicle License Fees?) is not a good one. Is there a compromise position on this issue? Will a franchise fee or some õther fee apply to what are now the traditional telephone companies? 0 Public, Education and Government Channels (PEG) The requirement of PEG channels for the community is a critical concem to many commu- nities and is one of the more difficult issues in local franchise negotiations. Sentiment in the legislature is strong that PEG channels are needed, the questions become how much and under what conditions? Is there a way to place a portion of the PEG requirements in state law, but allow local flexibility in negotiations? 0 Build~ut of Communicati~ns Systems A key issue, again with good support in the legislature, is the need to build out the communi- cations infrastructure 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. PoliticsfTiming The politics of communications regulation or re-regulation are going to be complex. The industries are in a highly competitive environment where time is an important element, both to those industry members who want to rush to market and those who see delay as being on their side. 'M1atever the particular industry strategy, the regulation of the communications industry is going to change. There has already been one very visible battle in the Texas Legislature this year. Two large phone companies tried to bypass the local franchise process through legislation pointing to the .speed- to-marker issue. The effort failed in a hard fought battle where the cable industry lined up with local govemments to oppose the measure. In New. Jersey, a similar battle is shaping up in that legislature. ' Chairman Levine has stated his intent to produce a proposal for consideration of the legislature during this session. This means that a proposal should begin to take a more definite shape in the July/August timeframe. State budget negotiations will likely play into the timing for development of the proposal. The chairman has indicated that local govem- ment and some of the industry will not like the first draft, but has asked that all parties of interest stay calm and continue to participate in the negotia- tions. The League has indicated to Chairman Levine that we intend to engage in a fairly aggres- . Continued on Page 8 Visit the league's Official Website n www.cacities.org PRIORITY FOCUS/PAGE 7